I came across the this fascinating article which chronicles the poor performance of the logistics group within the Israeli National Defense Forces (IDF) during the 2d Lebanon war in 2006. Literally, Israeli soldiers were suffering from dehydration due to a lack of drinking water in the Country right next to their own and one which they easily can beat militarily. Brigadier General Itzik Cohen, the head of the Logistics Branch for the IDF's Technology and Logistics Division said the following about this horrendous situation:
"During the Second Lebanon War, there was no shortage of logistic items. We had sufficient inventories of food, water and ammunition. The problem was that the items did not reach the forces that needed them."Translate this into a business problem which we see all the time: The company has a better product and can readily produce it but the problem is they cannot get it through distribution to the customers who need it when they need it (Availability of product is at least two dimensional: Quantity and time). Think about this in relation to the infamous "Black Friday" events. There is a lot of demand, there is a lot of promotion (think of promotion as the invasion) but the company cannot get the product to the market. Last year, one company even canceled orders admitting they would never get the product to market.
Why did this happen to a one of the most proficient militaries in the world? We learn the issue is very similar to the problem in business. Here are some reasons cited in this article:
"In the summer of 2006, the IDF disbanded the divisional logistic groups that were responsible for resupplying combat divisions... The issue of logistics, so it seemed, was of low priority for commanders, and the result was reports of hungry and thirsty troops deep inside hostile territory."Does that sound familiar? Logistics is a "low priority" for commanders? Translate this into business and think how many times logistics is an "afterthought" to the people who generally run a consumer company (sales, marketing, finance and merchandising). Of course, there are great companies, like Wal-Mart who fully understand logistics is in fact core to the success of the company.
The life cycle of a company's organizational structure relative to logistics is very similar to the experience cited in this article with the IDF. This life cyle looks like the following:
- Business is Going Well - All is in Balance
- Times get tough - Cut "Non Core", Logistics is seen as "Non-Core"
- Things start getting better
- Product has high demand, logistics is under developed, sales and marketing say "If only logistics was better we could sell the product"
- Company invests in logistics
After 5, the cycle starts all over again. This is a common life cycle of a company and it appears a very common life cycle of a defense force.
My next post will discuss how the IDF solved this problem with what appears to be some real "10X Solutions".