Wednesday, October 31, 2012

"The Logistics Failures Will Not Be Repeated" - Part Two

Note:  This is Part 2 of a Two Part Series Concerning Logistics Lessons Learned in The Israeli National Defense Forces (IDF).  You can read Part 1 here. 

This entry deals with an article I read which discussed the logistics failures of the Israeli Defense Forces (IDF) in the last Lebanon War.  I felt the article really applied to what I see as a common business cycle where a business sees success then begins feeling certain elements are not "core" to the business and logistics almost always becomes one of those items.  The business sheds / outsources / under invests in the logistics centers. Inevitably, something happens where logistics becomes a necessary requirement and the company finds out they no longer have the capabilities which they had originally and which may have actually been core to the success.  

Having been caught flat footed the business rushes to reinvest and the cycle starts all over again.  

The IDF found themselves executing this same cycle.  Prior to the Second Lebanon war they had stopped investment and training in the logistics forces, they were not seen as core and their capabilities atrophied to dangerous levels.  Once they went into Lebanon and the IDF literally had soldiers dying of thirst they realized how wrong they were.  This part of my two part article (Again, you can read part 1 here ) discusses the solutions. 

The first item they had to fix was the competency of the forces in terms of both training and equipment.  Due to under investment the logistics forces were the last to get equipment and the last to be invested in for training.  This was fixed and the "competency" level was raised to above 90%.  

A second and very interesting development was the organizational structure they adopted as a result of the learnings during the second Lebanon War.  The reorganization is described:
"Most importantly, following the war, the Logistics Corps was removed from the responsibility of the Ground Forces Branch (to which it had been subordinate a short while before) and once again, became subordinate to the GHQ Logistics Directorate. In addition, we established unified responsibility in the field of logistics – from the GHQ to the level of the individual soldier"
What they found was when the logistics corp was subordinate to the operational forces (ground forces) they were almost always going to be ignored or at the most they would receive just minor investments as they would always be considered "non-core".

In business we see this all the time in organizations where logistics is subordinate to a brand or a commercial part of the business.  Yes, there are great examples of enlightened marketing and commercial general managers who fully understand the competitive advantage of a great logistics team but mostly they under invest because they push all the money to brand, product development and advertising.  They develop a great product, generate huge demand but find their ability to move to market in a timely and efficient manner is limited. 

The IDF essentially bypassed this organization and had the Logistics Corps reporting to equally high levels in the organization. This sends the right signal to the commanders and not only gives logistics a "seat at the table" but actually makes them "equals"  at the table.  

Finally, the IDF established a policy whereby no plans for military action are created without detailed logistics plans built along side the war plans (read: Logistics plans built along side the commercial plans).  This made the ground commanders (read: Commercial General Managers) equally responsible for the logistics successes (and by default responsible for any failures) of an entire operation.  They stated:
"Beyond that, the logistics issue was incorporated in all IDF operational plans. Today, no plan is drawn and no exercise is conducted without fully incorporating logistics planning. During the Second Lebanon War, many IDF commanders did not consider logistic issues a part of their responsibility, mainly because they had become accustomed, over many years of low intensity combat operations in the territories, to a state where logistics support was delivered to them, all the way to the end units on the ground. Now, IDF commanders understand that as part of conducting combat operations, they must be responsible for logistic supplies on the ground, and that without logistics, their combat operations cannot be continued.”
Again, think how many businesses do not incorporate logistics into their overall product development plans or do not incorporate them early enough to matter.  When decisions are made in terms of size, channel distribution, packaging, final assembly etc is when logistics people should be at the table helping and providing input. I call this "Design for Logistics"™  Many times companies get the logistics group involved after all these decisions are made and find out they have developed a "Frankenproduct" which will clog existing logistics networks. 

Concluding Lessons:

There are so many lessons to be learned here by companies and here is my summary:

  1. Understand logistics is core to what you do and can provide competitive advantage if you properly invest. 
  2. Even if you outsource do not "throw it over the wall".  You need to manage and involved your outsourced partners as if they were part of your organization.
  3. Involve Logistics groups at the very beginning of the design and product development phase in a method I call "Design for Logistics"™
  4. Think about the organizational structure.  Whatever organizational structure you select ensure the leaders of logistics have equal say and are not subordinate to the commercial organization unless you are absolutely sure the commercial leader will not ignore or under invest in the logistics capabilities. 
  5. Invest in training and development of the logistics groups just as you do the commercial side.  
It seems these lessons have to be learned over and over again and it is good to reemphasize them.  Thank goodness lives are not on the line in business as they are in the military so the cost of not learning these lessons are only measured in dollars versus lives.  However, if a company is going to grow and prosper, they ignore these lessons at their own peril.  

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