When it comes to the logistics world, you'd be hard-pressed to find a more visible academic than John Langley. Langley, who heads up the logistics and supply chain program at the Georgia Institute of Technology, is one of the most sought-after speakers on the conference circuit. He's served a term as president of the Council of Logistics Management, which honored him with its Distinguished Service Award.
And that's not the half of it. Langley, who was also honored as one of the logistics profession's top five executives at Richmond Events' Logistics and Supply Chain Forum last year, has co-authored several books, including The Management of Business Logistics, a textbook now in its 7th edition.He serves on the boards of directors of UTi Worldwide Inc., Averitt Express Inc. and Forward Air Corp. And he's the lead author of an annual study of the third-party logistics industry.
With all these extra-curricular activities, you might wonder if Langley still finds time for the classroom. The answer is yes.Not only is he still teaching, but he uses his extensive contacts in the industry to enrich the classroom experience. Perennially on the lookout for real-life supply chain management problems to present to his classes, Langley challenges his students to brainstorm possible solutions, debate their merits and then simulate those solutions,with the goal of taking them to the ultimate proving ground, America's DCs.
DC VELOCITY Editorial Director Mitch Mac Donald recently spoke with Langley, who reflected on the lure of logistics, the keys to successful outsourcing, and why outsiders are often the best advocates for supply chain education programs.
Q: What are Georgia Tech's goals and objectives for educating tomorrow's logisticians?
A: Georgia Tech's programs include all the disciplines you would expect to find at a major university, but there is a significant emphasis on engineering. The Logistics Institute, where I work, is part of the School of Industrial Engineering. We offer both degree programs and executive and professional development programs, which means we have regular involvement with both undergraduate and graduate students studying for degrees and with executives and managers returning to campus for professional development and education purposes.
In addition to that, we've formed a relationship with the National University of Singapore to run a logistics institute in the Asia-Pacific area. So we regularly interact on teaching and research with our colleagues in Singapore. Throughout the first six months of each year we actually host the Atlanta-based portion of the education for our dual-degree students who are studying for master's degrees from Georgia Tech and from the National University of Singapore. They end up receiving two degrees for their efforts.
Q: Are they students of the National University of Singapore or Georgia Tech?
A: Actually they're technically students of both programs. The National University of Singapore takes the lead in the program and almost all of the students are sponsored by companies that do business in the Asia Pacific area, but the program is actually a joint venture between Georgia Tech and the National University of Singapore. It's funded by the government of Singapore.
Q: How did you find yourself in your current position? Had you always planned to specialize in logistics?
A: What happened basically was that after earning an undergraduate degree in mathematics and an MBA in finance 30 years ago, I was still interested in continuing my studies. I looked around for a discipline that was both interesting and that had a bright future. I found that the areas of logistics and what we now call "supply chain management" were areas of strength at Penn State, where I studied. I decided to pursue formal education in those areas. I received a Ph.D. degree in business logistics and then continued for about 30 years as a professor in these fields. Most recently,my involvement with Georgia Tech has allowed me to combine my interest in being part of the academic community with my desire to go out and get involved with the actual business community.
Q: What did you find so intriguing about logistics?
A: No matter what the company, logistics is an area that has a significant influence on the daily operations. At the same time, there is a far-reaching view of logistics that relates to corporate strategy—that is, if you can design and implement effective strategies and then execute them consistently on a day-to-day basis, you can achieve your long-term corporate objectives as well as your short-term operational objectives.
Q: Logistics really is a function that touches almost every part of a going concern, isn't it?
A: There's no question about it, Mitch. That's another thing that attracted me to this field. There's really nothing that's done in logistics that doesn't affect other parts of the business on a daily basis and for that matter, that doesn't affect customers and suppliers on a daily basis. The point is that achieving logistics objectives requires coordination and what we now call "collaboration" among people both within and outside of the company.
Q: Going back to something you mentioned earlier about your interest in getting out of the classroom to assume an ambassadorship role for Georgia Tech. What's the value of getting out in the field?
A: It gives me an opportunity to continually learn about the real problems people in the industry face every day and the different solutions they've tried—both successful and unsuccessful—then to relate those findings back to my students. Then, in the safe haven of the classroom, the students can brainstorm possible solutions, debate their merits and then actually simulate solutions to these supply chain problems. Ideally, you can then continue testing the students' solutions with business and industry to see which ones seem to be most effective. I think most academic programs that serve the students well are programs that have a high degree of interaction between industry and the academic world. I think the interchange of ideas kind of goes both ways. One of my objectives career-wise is to help industry people become a little more academic and to help those who are studying focus on problems that are relevant to those who are practicing.
Q: Can you point to any particular mentor who helped you along your career path?
A: I've had the privilege of having a number of mentors during my career, some of whom are from the academic world, others from the business world, and others from the world of professional organizations and publications. I've had the good fortune to spend my career in the company of people who have taken an interest in me and have been willing to help me better understand what they do and how I can use that knowledge to try to serve the profession.
Q: During your years in academia, have you seen growth within logistics programs? Are students flocking to you nowadays or do you still have to recruit bright young people for logistics and supply chain management programs?
A: There's good news and bad news. The bad news is that even though there is exceptional contemporary interest in supply chain management, that doesn't guarantee the growth of logistics and supply chain programs. It requires continual marketing, if you will, by the professors and by the students. Some of our best marketers are former students who come back to their alma mater and encourage the administration to beef up their programs. I call that the bad news, but actually that's also the good news because we have to be on our toes every day to make sure we don't miss an opportunity to convince someone of the value of formal logistics and supply chain education.
Given how few business people and academics have actually taken a course in logistics or supply chain management, our selling challenge continues to be to create awareness. I think this is where the relationships with our industry counterparts prove really helpful. An outsider can come in and talk to a dean and, though he or she may be saying what we've been saying all along, that person immediately has credibility with that dean. They can often spur that dean to take action more quickly than a faculty member can. It's no different from the phenomenon we observe in business when internal people spend months suggesting some action to no avail; then the company hires a consultant, and all of a sudden it becomes a great idea.
Q: Ah yes. The quest for validation. Somehow the validation has to come externally, doesn't it?
A: Yes. That's a good way to put it. It's also important for people on the inside to avoid saying, "I told you so" and simply say thanks for helping out the cause.
Q: Let's shift from the academic side of things to the business side. How has logistics' role within the corporation changed over the years?
A: One of the more notable changes has to do with the organizational positioning of logistics and supply chain management. If you think of logistics as part of the overall supply chain process and if you think of supply chain management as something that businesses in general need to excel at, you almost automatically raise the internal profile of supply chain, logistics and what we would have thought of as the functional areas of logistics. By doing that, companies are also able to justify some pretty significant horsepower in terms of high-level executives hired to work within these areas. That's not to say that we didn't have smart people working in the logistics area before, but I think there has been an enhanced commitment recently by companies to hire some of the best and brightest to work in the supply chain area. If you attract the best and brightest, one thing they'll ask for in return is a say in the way companies are managed. I think that in the future we will see more success from the supply chain area.
Second, I think we will see even greater numbers of supply chain executives that move on to senior level corporate positions. I could name some people for you: There's Nick LaHowchic (president and CEO of Limited Distribution Services Inc.). He has had a blue ribbon career in logistics and supply chain management and is now spending more of his time with corporate general management. There's also H. Lee Scott at Wal-Mart (the former logistics manager who's now CEO of the world's largest retailer). Wal-Mart has been largely a logistics and distribution business from the start, so I think that's less of a stretch. Still, it is quite an exceptional accomplishment.
Another thing, I think, is that in companies that seem to "get it," there seems to be a recognition that overall business strategies should not only be determined with knowledge of supply chain realities, but that the supply chain realities sometimes should drive overall business strategies. In fact, those people who are involved in supply chain activities are becoming far more involved in determining strategic directions of organizations.
Q: I know you've done extensive research on third-party logistics service providers (3PLs). How do you account for that business's explosive growth?
A: I think there are two reasons for the explosion. For one thing, the services are getting better all the time. For another, companies are getting better at determining their own core competencies and many times, are deciding that it's not logistics and that they'd be better served by hiring a capable external provider. Also, none of the "smart companies" turn it all over to a 3PL. Instead, they work effectively with their 3PLs in what we would call a hybrid management kind of structure. The client company never gives up the strategic direction and oversight.
Q: What are the attributes of a successful 3PL service provider?
A: I think we're at the point now with the 3PL sector where the successful companies are demonstrating their superiority in two or three areas. One is in the services they provide to their customers. They're gaining a better understanding of where they have capability and for that matter, where they themselves might be better off outsourcing. No one ever said that a 3PL can't or shouldn't outsource some functions. Maybe it becomes a little bit more of a 4PL if it does that, but the point is the outsourced services provider is not exempt from the need to outsource.
The second thing is fine tuning and crafting a value proposition and service offerings that meet the needs of individual sectors. The "one size fits all" strategy has never been a popular one. I think companies today are determining how to customize their services to meet the needs of individual vertical markets. Today when companies are selecting a 3PL, one of the things they look at is the extent to which the 3PL has significant knowledge and understanding of the sector in which the company operates.
The third one is global. As imports and exports surge, companies are finding themselves much more involved in global commerce. If you're a global shipper or receiver, you have to do business with companies that are able to provide service on a global basis.
Q: As the logistics business continues to change, I would suppose that the skill set required to succeed in this profession is changing as well. What skills are of the greatest value to someone entering the logistics field today?
A: Well, first you need a base of knowledge that serves as a point of reference. You have to be able to understand what you're observing and be able to put it in context and so forth. Second, you need curiosity and an inclination to want to improve things and understand ways in which you can bring about the desired improvements. Another is a deep personal interest in other people and a desire to work effectively with other people both within companies and in customer and supplier organizations. One of the things we have seen over the past 30 years is an exceptional increase in our analytical capabilities—there are things that computers just couldn't do 30 years ago that we can do on our Palm Pilots today.
That said, and I think Bob Delaney made this point in one of his studies a couple of years ago, it's still all about relationships. I believe that. As a matter of fact, I think that sometimes our analytical prowess masks the importance of relationships in making good business decisions. We need to continually put the relationships at the forefront. When you're talking about global objectives, I think the term "relationships" takes on a totally different meaning in the sense that if you're going into China and you don't have a Chinese partner, you've automatically created another challenge for yourself.
Q: What do you think will be the next big thing in the logistics field (and it's OK to say RFID even though that's what everybody says these days)?
A: Actually I do think it's RFID. I think the next big thing is to be able to make a big splash with not just compliance, but in finding ways to improve efficiencies and reduce costs with RFID. The mandates for the use of RFID are kind of shaking up companies, but they will figure out a way to comply and then also figure out a way to benefit from this. In the long term, we have embarked on a very productive endeavor.
Q: Do you think it will have as profound an impact as the bar code has had?
A: I think it will have a much greater impact, long term. That's simply because of the attributes of RFID and the kinds of information it can provide. It may not come as quickly as we'd like. I hope we'll see the price of the technology drop because that way companies will continue to be excited about it. Right now, I think most companies are looking at it as an investment. I'm not sure that they fully understand where the payback is going to come from, but I definitely believe there is a payback to be had.
Q: Any closing thoughts?
A: Yes, and it's hard without sounding like I'm promoting DC VELOCITY, but in my opinion, the quality of the communications in the logistics and supply chain field has increased dramatically in recent years. Several publications, including DC VELOCITY, have emerged that are doing an excellent job of appealing to the needs of senior executives. It all kind of fits together, I think. Everybody has a role to play. You guys are in business for a number of reasons, including to sustain yourselves, but at the same time, the products that you are providing are reinforcing the things we're trying to do. Everybody has a hammer and each of us has our own kind of nail.
