How Supply Chain Management Relates to Mass Participation Sports Event Operations vol. 2 – Logistics
In pursuing my Post-Graduate Certificate in Supply Chain Management – Global Logistics, I could not help to draw parallels between the components of SCM and my previous career in participant sports event operations. This indirect background in Supply Chain greatly facilitated the program as I had a constant supply of past professional examples to which I could relate many concepts. The biggest take-away was that all three segments of Supply Chain Management, which include: purchasing, inventory management and logistics (transportation) are required for a well-managed event, whether on a large or small scale. This article focusses on how mass participant event operations relates to the supply chain management component of logistics (or transportation) and is the second in a series of three articles on the topic. The first on purchasing can be found here and the final topic on inventory management can be found here.
As in any industry, after you purchase your goods or services, they must be transported to your storage location, whether a warehouse or directly to your event venue as per Just-In-Time inventory management, but more on that in volume 3. Many customized products procured in China are ordered well in advance of the event through various methods of forecasting, as mentioned in volume 1. Do you see how all these concepts tie together?. In doing so the event will take advantage of the cost savings associated with longer delivery lead-times of shipments made by boat.
Shipping by Boat vs Air
Long story short, shipping goods overseas by boat is many times less expensive than by air due to the economies of scale as boats are many times larger than cargo airplanes. A marathon, for example, will require finisher’s medals, age category and overall awards/ trophies most often manufactured of zinc in China. It is best practice to include a considerable amount of safety stock in an event’s initial order to take advantage of substantially lower shipping costs for shipments made by boat. Ordering the above-mentioned items for a 15,000-person event will cost thousands of dollars more if the shipment is made by air. The trade-off is that shipments made by sea take two to three months (including manufacturing time) while shipments made by air take two to three weeks, also including manufacturing. Often an inaccurate forecast will force the event director to place a last-minute order by air, causing the value of the goods to be overshadowed by the cost of shipping. The director would have been better served by ordering additional safety stock with the initial order that was transported by boat.
Shipping by Truck, Rail and Intermodaly
Not all event specific products are produced or customized overseas. Inexpensive participant shirts, as are required for our marathon example, can often be purchased and customized within the event’s domestic market or by a neighbouring country. For an event in Canada it is slightly less expensive to order inexpensive custom technical shirts or cotton t-shirts from the United States. Either way, these items will be shipped by truck, or possibly intermodaly using a combination of truck and rail. Delivery lead-time will depend on the geographic distance between the supplier and the buyer in addition to the infrastructure quality between the two points. If the shipment of goods cross an international border, it will require customs clearance, the payment of import tariffs and/ or duty, whether transported by truck, rail, air or any other mode of transportation. This service is often performed by the freight forwarder employed by the party placing the shipment, whether buyer or supplier or can be outsourced to a customs broker.
Use a freight forwarder: they will make your life easier. Event operations professionals are well versed in most aspects of event operations. Customs clearance and transportation coordination is rarely one of their core competencies, and as such should be outsourced. Freight forwarders reduce costs and increase efficiency through their full-service provision of all transportation needs, allowing for event operations professionals to focus on what they do best.