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Meet Mike Star

Mike Star is currently Vice President of Sales and Marketing for Fidelitone Logistics, a third-party logistics provider located in Wauconda, Illinois. Mike Star specializes in supply chain and supply chain technology solutions, specifically in the area of warehouse management, transportation management, and labor management. Over the past 16 years, Star has worked for a number of companies, including HighJump Software, Red Prairie, Viewlocity, all focusing on the supply chain technology sector.

Backing Away from Technology and Innovation Investments

Mike Star says he's seen a number of consequences tied the economic downturn. For starters, companies have come to the stark realization that they are incredibly inefficient at responding to significant changes in the supply chain, and many companies have stepped completely away from technology and innovation investments. Even projects that were planned and funded for 2009 were put on hold. "Companies have been forced to cut assets, particularly in supply chain," Star said, "and I don't think those assets will be very easily replaced."

A Crash Course in Lean Supply Chain Management.

In Mike Star's words, "The recession has been a crash course in lean just-in-time supply chain management." All the principles have been tested by analysts, and all theories have been discussed in classrooms, but the recession gave us real, firsthand knowledge of what can happen when the concepts and capabilities aren't inherent to your supply chain.

Putting a Positive Spin on Recession

If you're looking to put a positive spin on the recession, Mike Star says he thinks companies have a much better idea of where their vulnerabilities lie, where their inefficiencies are, and that has forced companies to improve collaboration between actors in the supply chain. Suppliers are communicating with manufacturers, and knowledge is being passed up through distribution channels all the way to retailers. "We're finally getting to the point where collaboration and communication is being forced, and we're all going to have to respond to that," Star concluded.

Four Things Companies are Learning to Live Without

First, Mike Stars says we're quickly learning to live without fixed assets that go along with managing the supply chain. He believes companies will be looking to shift those costs from fixed assets to variable costs to better deal with fluctuations in the supply chain.

Secondly, companies will also have to learn to live without buffer stock. Star has watched companies drive inventory levels down, and, in certain industries, he's seeing already short lead times cut down even further.

Third, product manufacturers are beginning to rationalize their SKUs, which means consumers will have to live without as many choices moving forward. In the future, Star said, companies will have their standard product offerings, and will be able to make supply chain decisions based on more standardized products versus variables that might be more difficult to supply on an as-needed basis.

And finally, in terms of what we'll be missing, Mike Star says the big capital outlays and expenditures for supply chain innovation will continue to be scrutinized, and companies will need to turn rely on supply chain partners to provide those types of advances in the future.

What Companies Need to Change to Avoid Future Troubles

Companies have shown they can bring projects to a screeching halt, even projects they had planned to make investments in. What will need to change, Star said, is that companies will need to find a way to escalate those decisions that can put that innovation back into the supply chain -- to get those necessary projects back on track, so they're not caught in the same situation down the road. It will be interesting to see what happens, because companies can very easily kill a project budget, but they have yet to show that same expediency in putting those decisions back on course.

Down the road, we're going to see companies focusing on their core business, and on what differentiates them for the competition. Companies will also turn to partners that specialize in providing innovation, best practices, technology to meet the supply chain challenges of the future.

The Future of Supply Chain Technology

From the software technology perspective, Mike Stars has witnessed firsthand a tremendous amount of planned technology investments and innovations being put into a holding pattern, and as he said, it'll be interesting to see if those companies can actually bring those projects back online and expedite them quickly. Star suspect that's going to be a challenge for them. "In the supply chain software space, we've seen a tremendous amount of companies defer those decisions, and decide not to make those expenditures at this point in time, Star added.

Fidelitone works closely with Best Buy, a company that has been very aggressive with trying to remove nodes from their parts distribution operations, and their technician process, to improve efficiency. Those kinds of innovations are what companies will likely continue to pursue as they try to drive costs out, to simplify, and to streamline their supply chains.

What's on the Other Side of the Recession?

Mike Star thinks there will be increased interest in third-party logistics providers, and see them becoming more prominent in the market as companies look for alternative to managing their supply chains.

"A third-party logistics company that specializes in innovation, technology, best practices can help companies move their supply chain forward much more quickly than they could on their own," Mike Star added, "so, obviously, as a 3PL provider, Fidelitone Logistics certainly hoping that trend picks up, because we believe that that type of a business strategy has a lot of momentum in this type of economy."

About Fidelitone Logistics

Fidelitone Logistics is an industry leader in 3PL and supply chain performance that delivers value-added solutions for business partners and their clients. As an innovator within the logistics industry since 1929, expertise includes:  Supply Chain Management, Inventory Planning, Technology Solutions, Warehousing, Last Mile Delivery, Reverse Logistics and Parts Logistics. Ranked a "Top 100 3PL" by Inbound Logistics magazine, Fidelitone Logistics has more than 20 locations throughout the United States. For more information, please visit www.fidelitone.com.