- / N2N / – Ken Lyon has worked in logistics, freight forwarding and supply chain management since 1978. He began his career in operations, but his keen interest in the practical benefits of technology, and its impact on the industry, eventually led him to the supply chain solutions side of the business.

Looking back, Ken says the most memorable period of his career was the ten years he spent with UPS as part of the founding management team of what was then called UPS Worldwide Logistics, before it became the UPS Logistics Group, and then went on to become what is known today as UPS Supply Chain Solutions. “It was an exciting time for innovation,” Ken said, “and working with great people who really embodied everything that UPS stands for was an invaluable learning experience.”

Having witnessed its impact on other industries, Ken Lyon left UPS to pursue and develop supply chain and logistics opportunities tied to the Internet, which brings us to Ken’s current position with VisibleLogistics, a provider of on-demand supply chain and logistics services and web solutions.

Collaboration Leads to Supply Chain Innovation

In an uncertain economy, Ken Lyon says, most organizations are focused on today’s problems, which is completely understandable. What Ken advises, on the other hand, is to take a step back and look at things a little differently, because that, he suggests, is where organizations will find ways to innovate.

VisibleLogistics, Ken says, is very keen on collaboration because supply chain operations are always conducted in partnerships with other parties. He understands that many companies are suspicious of collaboration, and that most have pursued it because they have to, not because they want to. Ken’s goal is to change the way companies view collaboration by helping them understand the value, benefits and innovations that can be realized by partnering with like-minded organizations.

“We’re all part of a global economy and more organizations are outsourcing anything that can be done cheaper, or more efficiently, and that has had a profound impact on how supply chains are structured and how they operate,” Ken said. The bottom line is, very few companies are large enough to do everything, from procurement, to delivering products into the marketplace. “I think the last big enterprises to do this were the automotive companies, and as we’ve seen over the past few years, they’ve all suffered terribly in the latest recession, because when you’re structured in the way that you’re having to do everything yourself, it means you have a colossal asset base that is very, very difficult to change,” Ken said.

Regardless of what industry you’re in, Ken says, today, it’s all about being responsive to customers. Again, to use the automotive industry as an example, when a customer enters a showroom to purchase a very specific model, they either have to settle for a vehicle with different features and a different color than they had in mind, or they would have to wait several weeks for a custom order. Today, Ken says, many companies have moved beyond that and have transformed their supply chains to be more responsive to the customer — and the only way for many companies to accomplish a greater level of responsiveness is through collaboration. “That is the real value and power of partnerships,” Ken said, “and what will drive the global economy forward.”

Trust is the First Step Toward Collaboration

Again, Ken acknowledges the fact that some factions are uneasy with the concept of collaboration, and feel it is just a way of exporting jobs to lower-cost economies. That may be true in some cases, he said, but generally it’s about developing the intellectual property and knowing how to manage your network so the value stays with you. At the same time, you’re creating higher-value jobs, while passing jobs that require less skill, and can be outsourced at a lower cost, on to regions where people will welcome the opportunity. It all requires a very complex and sophisticated choreography of managed assets, order flows, financial flows and information, and that is an area of the business Ken Lyon is particularly interested in.

The first step toward collaboration, Ken advises, is to start trusting each other, because trust in the basis for any collaboration. By way of example, Ken points to social networking. It is interesting, he says, that the evolution of social networking has made people more comfortable with trusting other parties. When someone finds you on Facebook or LinkedIn, all they have to do is reference a mutual connection and they become part of a network of professionals you trust, which in Ken’s mind, offers very positive benefits. “As these principals and mindsets become more pervasive, especially with the younger generation,” he said, “trust will really take root and everyone will be more comfortable with the idea of sharing information and working together to solve problems — which the foundation of effective, agile and responsive supply chains.”

Connecting All Parties in a Supply Chain

According to Ken Lyon, “Most supply chain visibility solutions tend to be very elaborate and very complex to establish. They tend to focus on tier-one partners, when what you need is a mechanism that draws people together in the tiers below tier one, and those organizations don’t have very sophisticated information technology or fancy IT staff that can spend months establishing connections.”

“We designed VisibleLogistics as a means of connecting all parties in a supply chain quickly and easily,” Ken explained. The company’s goal is to focus on the two areas that have the most impact on supply chain operating costs — the inventory, which is where all the money is invested, and the orders that drive the inventory between participants.

VisibleLogistics’ solution has practical notification mechanisms embedded into it that serve as early warning systems to prevent and manage stock-outs and other events that pose supply chain disruption risks. In closing, Ken Lyon said, “If you are a tier-one operator with hundreds of thousands of transactions, orders and shipments moving through the supply chain, it’s not possible to watch every detail, when all you really need is advance warning of problems or delays — and time to react. That is what adds responsiveness and proactivity into your supply chain, and that is exactly what we’re doing with VisibleLogistics.”

Meet Ken Lyon

Ken Lyon, CEO of BitLogistics, is one of the pioneers of informatics development and its application within the logistics and transportation industry. Working in this arena since the early seventies and specifically with information technology since 1979 he has been directly involved in many of the pivotal events that have helped shape the use of computer based communications within the industry. He was with United Parcel Service for nine years — the last five years as Information Services Director and then Vice President with UPS Worldwide Logistics.

Ken has produced several papers and been a speaker at conferences and international trade and transportation conventions around the world including the 1997 OECD ministers’ conference on electronic commerce and the recent Global Information Summit for Nikkei in Japan. He also acts as a strategic consultant to several multinational companies and government agencies, helping them understand the impact of technology on the logistics industry.

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This post was submitted by Anna Kurghinyan.

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