Logistics Strategy

Logistics strategy is defined as the act of evaluating most cost effective way of distributing products to the market while achieving the service level objectives. Companies should be aware that logistics strategy may be location-specific, product-specific, customer specific and that the supply chains for the industry are evolving and dynamic. In order to obtain supply chain excellence, it’s very important to continuously evaluate all alternative cost-cutting strategies which enable competitive advantage.

Some examples include;

1. Fast / slow Does the company have an established logistics strategy to adequately handle the fast moving goods differently from medium and slow moving goods? Within the distribution center(s),etc?

2. DSD / Non-stock

Does the company have an understanding of all the lost profit opportunities and cost components for the goods that are deemed ’non-stock’’ or ’’ Direct store Delivery’’?

Is there an established logistics strategy that delineates clearly when a product should be inventoried?

3. Third party services

Does the company need to operate its distribution facilities or would it be better to have 3rd party providers manage all or some aspects of its logistics functions?

4. Inbound Logistics

Are there any opportunities to reduce the landed cost of products through a better inbound logistics strategy such as backhauls, reduced handling, load consolidation, etc.?

5. Outbound Logistics

Are there any opportunities to cut down the outbound transportation costs either through better private fleet routing,load consolidation opportunities etc.?

Regardless of your company’s size, supply chains are very complex and transcend many departments within the firm. In order to make the best decisions for your customers and your business, it’s advisable to hire a good supply chain consulting firm to provide value by carrying out unbiased evaluation of all statistics and facts behind your enterprise.