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Building an Effective Logistics Strategy

A logistics strategy is necessary to effectively manage shipments of export cargo and import cargo in international trade.

Building an Effective Logistics Strategy

There is a lot more to logistics than just making tactical decisions about transportation and warehousing. You need to develop a logistics strategy to ensure high performance of the supply chain.

A logistics strategy can be defined as a set of guiding principles, attitudes and driving forces that help you coordinate plans, goals and policies between different partners across any supply chain. It helps you increase the supply chain performance while improving supply chain management on a whole.

Importance of Logistics Strategy

The supply chain changes constantly, which in turn, affects the logistics organization. You must implement a logistics strategy to ensure that you can adapt to the flexibility of the supply chain. A logistics strategy allows you to identify how imminent changes impact the company so that you can make the necessary organizational or functional changes to ensure service levels are not reduced.

Components of Logistics Strategy

There are four levels of logistics operation but you must examine all the components of the operation to check if you can achieve any potential cost benefits.

Transportation. Check if your current transportation strategies help the service levels or not.

Outsourcing. Ask which outsourcing parties are used in the logistics function. You must question if further outsourcing with a third party logistics company would improve the service levels or not — if yes, then how?

Logistics Systems. Do your current logistics systems offer the level of data that is required for successfully implementing logistics strategy? Do you need any new systems?

Competitors. Take a look at what your competitors are offering. Check if you can make any changes to your company’s customer service that can significantly improve service levels.

Strategy Review. Examine if all your logistics and organizational objectives align with each other or not.

Tips To Create an Effective Logistics Strategy

Focus on Connectivity. You should design the logistics strategy in a manner that connects you to the suppliers, corporations and manufacturers that are situated in various parts of the world. You should have the technology to link all the entities in a way that offers consistency, enhances visibility and streamlines processes so that you can meet challenges in real time. Make sure that you use solutions that can deliver to everyone in the supply chain, regardless of their location.

Go for a Configurable Solution. Make sure you choose to implement a configurable solution instead of the one that is a forced fit. Find a solution that can be configured fully to various needs of your supply chain. A configurable solution adapts to the company’s needs instead of forcing you to adapt to them.

Take Actions that are Backed by Facts. When you rely on facts and have real-time access to information, you can take actions that help your business reach its maximum potential with minimum time investment. Avoid turning to old company customs if they are irrelevant in the current times.

Use Accurate Data. When you have accurate data, you can make informed decisions that can help you plan for future success. Don’t be afraid to use innovation to plan ahead. Implement automated systems that offer accurate data about almost everything you need. Do not compromise on this aspect as it can make or break your future plans.

Adopt New Technologies. Incorporate innovations such as cloud technology, track and trace technology, use of truck scales, and voice technology in your logistical processes. Keep an eye out for new developments such as 3D printing which have the potential to be a game-changer in the future.

The future of logistics is really promising and you must take proper steps to keep up with it. Make sure that you make long term decisions so that you can ensure that logistics plays a full role in supporting a company’s products in the market place at all times and stand strong against the competition.

Kevin Hill heads up the marketing efforts and provides technical expertise to the sales and service teams at Quality Scales Unlimited in Byron, California. He enjoys everything mechanical and electronic, computers, the internet and spending time with family.