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Learning the Language of CEOs in a Global Market

CEOs are employees who work directly for shareholders and report to the boards that represent shareholders of publicly-traded companies. Their ultimate goal is to increase shareholder value.

Traditionally, a CEO’s objectives are not viewed as complimentary or even affiliated with the practices of logistics and supply chain management (SCM). Not surprisingly, given their different points of view, the language chief executives speak and that of logisticians and supply chain management professionals are often very different.

However, a CEO’s failure to understand the role of logistics and SCM as interdisciplinary practices can result in disaster, as shown in Rebecca Jasper’s column, Inside Track. The insightful advice offered by this Column’s sage panel, comprised of Ms. Jasper, Christian Weidner and Richard Sherman, is bound to help others mitigate similar circumstances.

The high quality series of articles developed by LQ’s editorial team related to the theme Learning Across Disciplines: What CEOs and Logisticians Need to Know to Discover New Ways to Success, collectively convey a clear and common message to chief executives; business leaders need to include logistics and SCM on their agendas, instead letting shareholder value be the primary guide that skews their practices. Conversely, logisticians and SCM practitioners need to learn the language of chief executives to be more impactful and contribute to the success of their companies.

John Mentzer, University of Tennessee, who has written this issue’s cover feature, shines a strong light on the fissure that often runs between these disciplines in companies; logisticians tend to focus on the operational elements of business and the chief executives on shareholder value. Professor Mentzer’s case study shows how to build a lasting bridge between these two points of view.

Robert Martichenko’s article Mastering Cash Flow: The Need for CFOs to Focus on Logistics aptly describes cash flow as the blood of a corporation. Cash management involves looking across all of the disciplines on the corporate map to see the principal cash-flow drivers. Mr. Martichenko systematically relates these elements to the discipline of logistics, making a compelling case for CFOs and CEOs to focus more on logistics.

Demystifying logistics and supply chain management is also an underlying theme in Supply Chain: A CEO’s Competitive Advantage, by iWheels’ Jim Davidson. Too often C-Level executives make ad hoc decisions about the supply chain that confines their company’s business development. “Just as modern day automobile manufacturers have gotten their designers and engineers talking and working jointly to produce the most efficient and highest quality automobiles, so too should the supply chain be a consideration long before a product is manufactured.” Mr. Davidson emphasizes the importance of a strategic approach to SCM that involves tearing down barriers and avoiding compartmentalization to get a leg up on competitors.

Reverse logistics has also languished as a backroom activity, rarely seen on a C-Level executive’s radar screen, acknowledges Professor James Stock, University of South Florida. Professor Stock shows how higher recovery rates can significantly improve revenues, profits and a company’s standing in its customers' eyes.

In tandem with this theme, our editors and writers look at Trends in Global Logistics Practices. Companies trying to build cultures that encourage ingenuity in learning across disciplines also know that globalization is transforming their businesses. Logistics managers are facing heightened challenges and risks that seem to rise concomitantly with global business practices. While the conventional principles of logistics and SCM still apply, Professor David Closs, Michigan State, and LQ’s U.S. Executive Editor, cautions it is vital to be mindful of the increased complexities that exist in this environment.

Tom Nightingale, Schneider National, tackles a pressing element of international trade when he defines the elements that continue to impact international transportation and shipping, and deciphers how logisticians can take steps to create a solution.

We’ve also continued to build on LQ’s Educational Forum (Volume 10 Issue 1) this issue features a personalized and instructive account on business protocols in China. Victor Deyglio, president of the Toronto-based Logistics Institute, left Toronto to visit Shanghai in March this year. One month later, The Logistics Institute signed an agreement with the Shanghai Foreign Service Company to transfer skill standards, training resources and web-platforms to develop the competence of the Shanghai supply chain logistics labor market. Also, Professor Alan Law, Trent University, analyzes a recently conducted survey sponsored by the Institute and Trent University that shows how logistics education is related to the remuneration logisticians receive.

In this issue we offer a platform for ideas and concepts that are on the cusp of being part of the vernacular of enlightened boardroom discussions. They show that realizing the value of logistics and SCM as interdisciplinary disciplines can lead to significantly heightened value for shareholders. Don’t be surprised if this emerging interdisciplinary approach to logistics and SCM soon becomes part of the nomenclature that is commonplace in the executive suites of North America’s leading companies.

You will also find other innovative ideas in this issue to help you discover new ways to think about customers, education and employees.

Fred Moody, Editor and Co-Publisher