Logistics and finance should go hand in hand, as good logistics control can save costs and increase revenues. In practice, however, it is often the case that these two worlds - for that is what they are - do not conflict too much at best.
'Just send a number, then they are already satisfied'
I do a lot of projects in which planning systems are implemented, and when information needs to be extracted for the benefit of finance people, I sometimes jokingly say, "just send a number, they'll be satisfied already." But as a Greek planner once said to me, "some jokes can be very serious", there is a grain of truth in this. In my experience, figures delivered to finance departments almost never come back with critical comments, even if the project team itself later discovers that there were imperfections in them.
Accurate information not paramount
Conversely, I have learned that in the search for good information to plan with, financial data can typically be skipped. When making a plan, accurate information is of paramount importance, and this is usually not available from financial systems, which are characterised by abstract wishful thinking that is hardly tested against reality. Financial metrics are far too vague, whereas logistics planning requires concrete and influenceable key performance indicators.
Pointless rituals
Where financial processes really start to work against logistics is at the closure of periods - months, quarters, years. Suddenly, stock has to be improbably low for a few days, or some hours have to be made quickly on certain machines. These are completely pointless rituals that wreak havoc on operations worldwide with predictable regularity. However, the greatest damage is done when targets are set from a financial perspective, and logistics is then left to ensure that those targets are implemented. For example: please improve delivery reliability, and oh yes, do lower inventories as well. Whether and how this is all possible, the logistics professionals get to figure that out.
Logistics
and finance – it could have been so good. Where did it all go wrong?
Vincent Wiers - Expert Planning & Scheduling
