“Logistics is defined as a business planning framework for the management of material, service, information and capital flows. It includes the increasingly complex information, communication and control systems required in today’s business environment.” — (Logistix Partners Oy, Helsinki, FI, 1996)
For any company operating in the world of providing services and products to customers, being at the top of their game and having a healthy logistics strategy is a must, in order to stay competitive in today’s highly efficient business world. What should companies focus on? What should be their top priorities? The answer is not a magic number or a one-size-fits-all strategy that will ensure perfect synchronization between departments and automatic success. If there is one thing we know about the world or logistics is that it must work as a well-oiled machine with many moving parts, some big and some small, that fit perfectly together and perform their appointed duties; this means that even if only one part is dragging behind, the entire operation may grind to a halt.
Here at David Kiger’s blog, we bring you the latest articles about the world of logistics, how new technologies are influencing and changing the supply chain as we know it and also the best strategies to make a mark and get ahead in this highly competitive world.
The implementation of demand-driven logistics strategies can expand visibility, counter any market advantage your competitors might have, and maximize supply chain efficiency. The problem with a market that is a volatile as the one we are living in today, is that forces the supply chain to react to the ever-changing whims of customers and general demands of the market. Now this can be seen both ways, as a force that pushes a strong influence in the way business are conducted but also as an opportunity for leaders to anticipate and take control of change, and manipulate this demand reaction as a way to differentiate from the competition.
The proper emplacement of sales and operations planning is another way to create an effective logistics strategy. Wikipedia defines S&OP as an integrated business management procedure through which the leadership team continually attains effort, alignment and synchronization among all functions of the organization. It is important to understand that this doesn’t include simply the areas of Sales and Operations, but also all other departments that influence or are influenced by the everyday activities of the business. Outlining and understanding specific goals must be done as part as a team initiative to clearly define and commit to a line of action that aims to enhance performance in areas like customer satisfaction, profitability, improvement of sales and more. The purpose of these meetings or teamwork sessions is to identify how key aspects can be improved and how the different areas involved can do their part by cooperating with solutions. When done right, a well placed and properly maintained S&OP strategy can do wonders in improving the success of the company instead of having departments that are functioning as disconnected individuals and not working towards the common goal.
Logistics strategies must mirror corporate strategies in order to maximize their success. If your company strives to be known for having the fastest times moving goods, then your logistics strategy should be based on speed rather than costs. If you want to provide the best service available then you should focus on having a perfect order every time.
Another important tip to maximize the success of your logistics strategy is staying on top of the latest technologies and taking advantage of the extremely fast online environment and virtual applications to logistics solutions. Upgrading your supply chain systems and finding tailor-made online solutions for your operational needs is something that no company should go without. Customers today are used to lighting-fast solutions to their problems without considering many of the unexpected issues that may arise when dealing with supply chain management. Some of these issues like inclement weather, natural disasters, political and economic crisis are unavoidable, but as a company, you have to be prepared to respond in a way that makes this issues transparent and almost non-existent to your clients.
Careful planning is the best way to anticipate the unexpected. While it may be impossible to avoid this type of hurdles, it is clear that you can gain tremendous advantages by preparing ahead and having contingencies in place of an emergency. In times of crisis, those who are prepared will shine and customers will sure remember how dependable you were in a time when the odds were stacked against you. When you have partners, suppliers, and manufacturers located all across the globe, you need communication technologies that are able to bring everyone together and provide reliability, reorganize processes and boost visibility in order to anticipate and react to any outcome. A company is just as strong as its supply chain so when it comes to times of crisis, only those who are prepared can truly keep the wheels of the company rolling.