Insights & News

Treat Your Supply Chain Like Warren Buffett Treats His Portfolio

Shipping Truck on the open road

Posted On October 25, 2019

If you drive down one specific tree-lined street in a quiet neighborhood in Omaha, you will come across a home purchased in 1958 for $31,500. Of course, the home has appreciated in value since its mid-century purchase.

It is now worth about $650,000.

Despite his fame and staggering wealth, Warren Buffett continues to own and live in the same home, calling it his “third best investment.”

The home reflects Buffett’s general investment (and life) strategy: Avoid flashy trends, focus on the fundamentals, manage your risk, and in the long run, everything will probably be okay. In fact, Buffett proves almost 90 years of focusing on the basics can add up to a whole lot more than just “okay.” In Buffett’s case, it added up to a net worth of $82 billion, or nearly a billion dollars for every year of the 89-year-old Omaha native’s life.

It is also no coincidence that a significant portion of Buffett’s investment strategy focuses on supply chain technology and businesses. Buffett’s holding company, Berkshire Hathaway, has built its fortune in part by taking significant positions in companies like Amazon, UPS, and several railroads. In 2009, in the depths of The Great Recession, Buffett purchased the Burlington Northern Santa Fe railroad for $44 billion.

Buffett purchased the railroad in part because he believed in America’s long-term economic future.

And he made a whole lot of money.

Warren Buffett has made and grown his fortune in part by believing high-performing supply chains, transportation technology, and logistics companies are essential to the overall economy, and, more important, to Berkshire Hathaway’s strategy.

You should view your supply chain the same way.

If investing in supply chains is good enough for Warren Buffett, it should be good enough for the rest of us.

Investing in making your supply chain as efficient and effective as possible is the sort of solid “back to the basics” strategy Buffett would appreciate, and it’s the exact strategy you should adopt as 2019 ends and shipping managers and transportation executives begin planning for 2020.

Delivering products faster, more efficiently, with greater visibility and a more intense focus on your shipping department’s bottom line is one of the best strategies to beat your competition. In today’s market, it is isn’t just product quality that matters.

Today’s market also rewards shipping departments that get their products in their customers’ hands as fast as possible.

The day he purchased it, Warren Buffett’s house—even at a sale price of $31,500—represented a substantial portion of his net worth. Today Buffett’s house in Omaha amounts to .00000000001 of his personal financial portfolio.

That happened in part because Warren Buffett focused on the basics.

And it also happened because Warren Buffett made investing in high-performing supply chains a central tenet of his company’s investment strategy.

The Flat World Holdings family of companies cannot turn you into Warren Buffet.

But the Flat World family can make your company stronger by making your supply chain more efficient, visible, and profitable. Our suite of supply chain management, freight forwarding, custom crating, Transportation Management System (TMS) tools will help ensure your shipping department and logistics program are a strategic strength of your company.

Focus on the basics, including your supply chain.

It worked for Warren Buffett.

And it will work for you.