The introduction of project management systems into the logistics industry occurred around five years ago, but it wasn't until the last two years that it was widely acknowledged in the logistics sector. Initially, logistics companies had only a vague understanding and appreciation of project management concepts, without fully adhering to the principles and processes of project management for their logistics projects. Instead, they remained stuck in primitive marketing management or traditional management models. Most logistics enterprises lack the functional capacity and setup for project management within their organizational structures. Without a dedicated project department, the overlapping and vertical (pyramid-style) nature of the organizational structure is one of the biggest obstacles to the development of project management. Project management requires a flatter and more horizontal organizational structure, which also reflects a more human-centric approach.
Logistics project management demands that project managers possess multi-faceted knowledge and skills, be familiar with project management concepts and processes, understand the essence of projects, and can leverage the advantages of project management (horizontal flat management can fully utilize the abilities of each project member, motivate every member, and demonstrate the unity and cooperation of the project management team).
Project managers should possess the following relevant knowledge and skills:
1. Professional knowledge of project management theory, along with one or two successful project management case studies and experiences.
2. Professional knowledge of logistics management theory (able to design logistics solutions) and over three years of logistics industry experience, with success in more than three logistics projects.
3. Logistics operational experience and on-site management experience; logistics project managers must have practical logistics operation experience and skills, able to mobilize various resources and be familiar with all aspects of logistics processes.
4. Familiarity with logistics information system workflows and operational methods, capable of optimizing and integrating logistics processes.
5. A certain level of organizational management ability and personal charisma.
6. Strong communication skills and some marketing capabilities, with business acumen.
7. Strong dedication and professional ethics.
Of course, there are many more attributes, and listing them all would outline the qualities of a competent professional manager.
The author has been involved in project management in the logistics field for many years, summarizing and analyzing some common misconceptions in logistics project management from selected companies and specific logistics projects. The hope is to provoke more thought and discussion among peers in the logistics industry.
Misconception 1: If other companies can implement logistics project management, so can I.
Analysis: This is a very wrong mindset. Whether project management can be implemented depends entirely on the nature of the enterprise, its organizational management structure, and even the corporate culture and management philosophy. For current domestic private logistics companies, the opportunity is not yet ripe. Despite many bosses wanting to try, most end up failing, leading to doubts about the competence or even the professional ethics of project managers. The boss must embrace this advanced management concept and have a certain level of determination. If the company hasn't reached a certain scale, moved away from family-style operations, or lacks full familiarity with the current logistics market, it will be difficult to implement logistics project management. Currently, some large logistics companies have successfully applied project management practices, serving as examples for others to learn from.
Misconception 2: Sales personnel are project managers and can handle project management roles.
Analysis: Whether sales personnel are project managers and whether they can fully meet the requirements of such a role can be assessed against the skills outlined above. In reality, most logistics companies appoint sales personnel who secure a logistics project as the project manager for that project. While it's possible that they might have these skills, in fact, project managers are appointed by senior management after collective research and are given certain authorities. Their power is second only to the general manager or direct board leadership, with the authority to allocate resources like talent and funds.
Misconception 3: Logistics projects are solely the responsibility of project managers or the marketing department, irrelevant to everyone else or other departments.
Analysis: Such an approach creates disharmony within the company and hinders communication. Project management involves cross-departmental and cross-functional teams, composed of elite members from various departments and positions. Logistics project management is everyone’s responsibility, it's the entire company’s work, not just an individual's task.
Misconception 4: Simplifying or skipping the needs analysis phase of logistics projects.
Analysis: Needs analysis is a crucial first step in the project process and cannot be simplified or skipped. Some logistics companies rush to quote prices upon acquiring a logistics project without conducting scientific and detailed comprehensive analyses, leading to incorrect judgments about the logistics project. Early quoting of logistics projects leads to early failure. Tender-based logistics projects should not be quoted too hastily; sufficient time should be given to integrate the quotation system. Projects tendered solely based on price might not be worth pursuing.
Misconception 5: Not establishing logistics projects because it feels unnecessary.
Analysis: This clearly shows that project management is not actually being implemented within the company, but merely used as a slogan. Viewing projects as solely the marketing department's responsibility, without involving other departments or seeking their assistance, is one of the main reasons projects fail from the outset. Establishing a project is a critical step; it makes the entire company aware and invested, fostering a sense of honor and motivation while understanding the company's vision for growth.
Some company leaders fear leaking project-related information to competitors, which is a mistaken and basic idea. Logistics project information is already widely available in the logistics industry. Beyond what can be found online, clients themselves want good logistics suppliers to know about these opportunities. Competitors already know about these projects, and logistics companies often publicize their own clients.
Misconception 6: Believing there is no need to conduct surveys on the logistics needs of projects.
Analysis: Some may worry that clients won’t cooperate, claiming it's a trade secret. However, once you become their logistics supplier, you are already part of their supply chain management, having access to significant internal secrets. If manufacturing companies interpret it this way, it’s just an excuse to reject logistics companies. Without conducting logistics needs surveys, logistics projects are destined to fail, unable to provide scientific and reasonable logistics solutions or fair pricing, thus preventing any cooperative relationship.
Misconception 7: Believing writing a good logistics solution is enough to manage a logistics project well.
Analysis: Solutions are important, but the initial logistics project needs analysis, project initiation statement, and field research and data collection are equally vital. Only when these steps are done properly can the logistics solution align closely with the client’s needs, fit their expectations, and ensure smooth implementation and pricing.
Misconception 8: Thinking logistics solutions and implementation plans are solely the work of logistics experts.
Analysis: This thinking results in plans that aren't suitable for clients. Beautifully crafted plans may not be accepted by clients. Some believe it's the project manager’s job, leading to excessive time spent on writing plans at the expense of overall project management and planning. This forgets the essence of project management, which excels in demonstrating teamwork and utilizing everyone's potential and motivation—no management model can match project management in advancement.
Misconception 9: Thinking signing the contract means the project is done.
Analysis: This is just the first step in a successful logistics project. Logistics is a service industry, and contracts for logistics projects typically last from one to several years—a continuous service process. Managing and controlling the project after signing is even more critical. Many logistics projects fail because everything is done well in the early stages, but once the project succeeds, the project manager is sidelined and becomes just a marketer. This is a very wrong mindset and practice, and some business owners don't realize how harmful this is—it's a stumbling block to corporate growth.
Misconception 10: Thinking losing a project manager doesn't matter, or raising their salary to retain them for specific projects.
Analysis: This still treats project managers as marketers. Losing a project manager ultimately affects the entire marketing system. While it may seem not to impact company growth or daily operations, if one day there's no cargo to ship, it will be difficult for marketing staff to find new business. Once this trend takes hold in the logistics industry, it leads to the following situation: qualified, experienced project managers are hard to hire, those hired may not be competent, or inexperienced newcomers are trained and then leave after gaining experience, leading to high turnover rates.
Of course, doing well in a logistics project requires far more than just addressing the aspects mentioned above. Each logistics company's circumstances vary, and only by staying updated and adapting to the development of the logistics market can success be achieved.