Process Architecture and Information Systems Design

The imaginative solutions that have characterized our history are founded in fundamental understandings of how logistics processes work. Our team of professionals bring a wealth of experience in the optimal process design. This allows rapid description of extant processes, and timely provision of alternative designs. Our rich experience base also permits expeditious understanding of a firm's underlying data bases, and the steps necessary to improve these.

Logistics Cost Systems

We believe that our experience base positions us to develop cost systems which reflect the underlying complexity of logistics processes, while providing incisive directions for cost reductions. Our experience is founded in the leading-edge academic work on cost systems of our founder. It has been enhanced by our ongoing work with major suppliers of transportation services. We pioneered activity based cost systems for both rail and truck firms-long before that phrase had become a part of management vernacular. Importantly, we design cost systems which also include the critical opportunity cost components of asset-intensive production processes; the very processes so common in transportation and distribution.  

Through our early academic work in total factor productivity measurement in transportation, we are able to offer efficiency measurement systems to our clients which are integral to their cost systems. The cost systems, and corollary efficiency measurement standards, that we provide our clients are based on complex models of underlying production processes. We believe that such models assure that our clients will not be led into simple solutions with concomitant disruption of production processes and service levels.

Allocation Mechanisms

One of the most difficult tasks in the logistics arena is the construction of functional working relationships between the suppliers and users of those services. Our history includes many examples where such relationships have been forged. We have been able to accomplish this partly because both parties have a special confidence in our understanding of the services to be provided, and how they are consistently provided at minimal cost. By knowing the determinants of costs, we are able craft data bases which provide for efficient sharing of information. This information is then transformed into a framework that allows optimal allocations of service opportunities among suppliers.  

These optimal allocations of service opportunities are the result of our combinatorial, sequential auction process design. We pioneered this design five years ago. And we have employed it in large, complex settings on a regular basis since that time. We have developed an evolutionary approach to refining our auction mechanisms. This evolution includes the use of internet, and intranet, communications technologies. The result is that we are able to complete very complex auctions on short time horizons. Our unique history of accomplishments in this arena generates an unusually high level on interest on the part of participants.  

What we provide our auction clients is not simply a software package. Rather, we offer counsel on the optimal design of an auction, training to the participants, and understanding of the dynamics of sequential auctions. Our clients understand these associated services are integral to a successful conclusion of the auction process. We believe that no competitor shares our understanding of optimal auction design in the logistics setting; nor our experience in the successful conduct, conclusion, and implementation of large-scale complex auction processes.

Incentive Contracting

Working relationship in logistics require dynamic mechanisms to assure that efficiencies gained through a market process are sustained in the faced of changing markets. Our experience indicated that auction processes, large or small, produce outcomes that must be contractually agreed to between the parties. Those outcomes provide a natural manner for sharing efficiency gains between the parties. However, as buyers' and sellers' underlying economics change, there must be an effective way of assuring that the relationship remains profitable to both participants.  

At Jos. Swanson & Co. we have pioneered the design of incentive contracts. Such contracts, based on a carefully understanding of the objectives of each party, and couched in terms of measurable elements of the underlying service processes, assure that all parties remain sanguine.

Efficient Organizational Design

The command and control systems integral to sophisticated logistics processes bear little resemblance to those used earlier. As we work together with our clients, we are often requested to assist in the design of their future logistics organization. Our wide-spread exposure to command and control systems allows us to add addition value to our engagements.