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Strategy for Success

 

Logistics is an integral part of running a successful business. Whether you are dealing with logistics in-house or outsourcing to a third-party logistics company, ensuring your products are stored, packaged, transported, and delivered successfully is crucial to increasing profitability and customer satisfaction. Strong logistics practices and a logistics management plan will grant a competitive advantage and eliminate inefficiencies in your operations.


What is a Logistics Strategy?

A logistics strategy is a set of principles, goals, and initiatives that help to coordinate logistics planning between various steps along a supply chain. A logistics strategy helps refine sourcing, obtaining, storing, finding, packaging, and transporting goods to customers. It refines the service levels of your organisation and creates a cost-effective and efficient approach to logistics. In essence, a logistics strategy helps a business understand how to deliver the right product to the right customer at the right time - and at the lowest possible cost.

Logistics Strategy vs. Logistics Planning

It is important to differentiate between logistics strategy and logistics planning. Planning tends to focus on immediate, short-term goals, while a strategy focuses on bigger-picture elements and long-term goals.

To exemplify, logistics planning considers the most optimal way to move a specific product and increase logistics transparency for transportation. A logistics strategy examines the entire logistics process and determines if there are areas that require improvement, or if your team needs to incorporate a new process to optimise profitability.

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How is a Logistics Strategy developed?

After challenging years for logistics and major disruptions within the supply chain, many firms are re-considering and re-evaluating current logistics strategies and exploring new approaches to supply chain management. As the market is ever changing, internal processes must be optimised and modified when a need for such change arises.


Ask the right questions

One of the best ways to initiate the development of your logistics strategy is to ask yourself questions and brainstorm the best solutions as you move forward. This can even occur in the form of a team activity, which bolsters cooperation and brings more ideas to the table.

Potential questions worth asking:

- How does deciding strategic supply chain initiatives help improve wider business strategies?

- What is the best number of warehouses, distribution centres, and fulfilment centres to ensure that operations run smoothly?

- How close in proximity to distributors and warehouses can products be manufactured?

- Is there an established process for communicating new policies, information, and procedures throughout the internal system?

- Does the current logistics strategy require a change in the management plan?

- Would partnering with a third-party logistics company help improve current service levels?

- Is enough data from your logistics systems currently being obtained, or are new systems with better dashboards, KPIs, and metrics required?

- Do competitors offer better services?

- How can logistics strategy help improve customer service and customer satisfaction?

- Is real-time data utilised, or are operations reliant on outdated or inaccurate data that could lead to errors in the logistics systems?

- Is the current logistics strategy in line with the company’s business objectives and overarching strategies?
Incorporation of Key Elements of Logistics Strategy

The first key element of incorporation is storing, warehousing, and handling of materials. To operate at peak efficiency, manufacturers must have more goods on hand than their consumer’s demand. To store at surplus, warehousing and material handling strategies are needed.

Packaging and Unitisation

Packing and unitisation are also key elements of a logistics strategy. Their role is essential for moving products from one area to another and aids in the collective transportation of products of different dimensions.

Inventory

Inventory is another important factor in logistics related to warehousing and storage. Inventory controls the flow of goods coming in and going out of a warehouse, and includes keeping track of stock levels, locations, and predicting when items will be required and reordered.

Transport

Transport is a logistics factor that refers to the actual movement of goods out of a warehouse and to the consumer or end user. It includes modes of transport like freight trains, road vehicles, cargo shipping, and even air transport.

Information and Control

The last element of a logistics strategy is information and control. This refers to the data that helps in learning how to manage the supply chain and control operational procedures in warehouses and fulfilment centres.

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Lars Bek Jensen
+45 2120 0666
lbj@langebaek.com
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