Summary
Logistics is undergoing massive change. New concepts and ideas concerning how the best organizations achieve logistical goals appear daily. The challenge is to sort through the best of time-proven practices and merge them with the most applicable new ideas and concepts.
A careful review of logistics organization development suggests that most advanced firms have evolved through many forms off functional aggregation. The evolution started from a highly fragmented structure in which logistical functions were assigned to a wide variety of different departments. For over four decades firms have been grouping an increasing number of logistical functional responsibilities into single-organization units. The typical format for aggregation was the traditional bureaucratic organization structure. The objective was to aggregate functions in an effort to improve operational integration.
The advent of management focusing on critical processes began to usher in what is referred to as horizontal organizations. Today, leading-edge firms are beginning to experiment with process management as a means for overcoming the divide that exist among internal functions. There is increasing evidence that anew form of organization may be emerging that adopts the us of information technology to implement and manage logistics as a transparent organization structure. While such arrangements remain more conceptual than real, the required information technology is available today. The concept has particular appeal to the management of logistics, which involves substantial challenge in terms of time and geographical scope of operations.
Perhaps the most difficult job of all is managing change in the organization. Whether the change is strategic, involving fundamental new processes, operational, or only in personnel, managers must develop new skills that allow them to implement change without disrupting the focus of the organization.
In addition to managing the internal organization, supply chain executives are intimately involved in managing relationships among organizations. Collaborative relationships provide a mechanism to reduce operating expense, enhance productivity, and meet customer requirements. Successful integration requires cross-organizational programs to facilitate operations, technology and planning, and relationship management. Initiating, implementing, and maintaining relationships with suppliers and customers are highly dependent upon the existence of trust among those firms. While reliability is a critical aspect of trust, ultimate success in relationship management will depend upon evaluation of character as firms make decisions concerning which supply chains they choose to participate in.