When a company creates a logistics strategy it is defining the service levels at which its logistics organization is at its most cost effective.
What Is Involved in Developing a Logistic Strategy?
According to (http://logistics.about.com/od/supplychainintroduction/a/strategy.htm) a company can start to develop a logistics strategy by looking at four distinct levels of their logistics organization.
- Strategic: By examining the company’s objectives and strategic supply chain decisions, the logistics strategy should review how the logistics organization contributes to those high-level objectives.
- Structural: The logistics strategy should examine the structural issues of the logistics organization, such as the optimum number of warehouses and distribution centers or what products should be produced at a specific manufacturing plant.
- Functional: Any strategy should review how each separate function in the logistics organization is to achieve functional excellence.
- Implementation: The key to developing a successful logistics strategy is how it is to be implemented across the organization. The plan for implementation will include development or configuration of an information system, introduction of new policies and procedures and the development of a change management plan.
A successfully implemented logistics strategy is important for companies who are dedicated to keeping service levels at the highest levels possible despite changes that occur in the supply chain.
Supply Chain Visibility
Supply Chain Visibility is knowing where inventory is at any moment. But it is also actionable information that can help support customers and be applied to myriad touch points along the supply chain—from supplier to service provider to end customer—to remove redundancies and improve processes. (http://www.inboundlogistics.com/cms/article/how-to-gain-supply-chain-visibility/)
Because businesses often focus on capitalizing core growth initiatives, many do not have the internal IT infrastructure to support dynamic supply chains. Collecting and identifying data that is important, validating this information, and communicating it in a way that lets others leverage this visibility remains a critical challenge for companies large and small.
6 STEPS TO SUPPLY CHAIN Enlightenment or Visibility
STEP 1. Open lines of communication among all parties involved. Visibility means different things to different companies. So you have to define what your enterprise is looking for, as well as what visibility, and how much, is important to the customer.
Is it visibility into freight capacity? Is it mode-specific, domestic, or international? Is it exception-based or 24/7/365?
STEP 2 Trust your partners. Visibility is built on sharing information and trusting service providers with that information. Identify the role a 3PL, forwarder, or carrier will play, and trust it knows what itπs doing. If you have built a relationship, established benchmarks, and aligned expectations, everyone knows what they are accountable for. Misaligned goals, or a failure to trust supply chain partners with vital data, planning, and execution, will ultimately leave all parties disappointed.
STEP 3 Invest in technology. The only way to drive better visibility is to invest in the technology infrastructure and resources to gather and act on necessary information. End users can either partner with a service provider that has the technology and resources to execute, or find a stable of partners—and build relationships with each one—to ensure expectations are paired.
Future Trends with Manufacturers and Brand Owners
The move towards focusing on core competence and using ICT developments to manage and coordinate the supply chain is an ongoing process that is opening the door of opportunity to a range of supply chain partners. The main future trends that are discernible are as follows:
* Manufacturers and brand owners are focussing ever more on core competences and building external support networks of service providers to take responsibility for ever increasing chunks of the supply chain.
* There is a simultaneous drive cut costs while maintaining quality and meeting customer demand.
* Increased speed of flow of inventory, fewer and lower inventory buffers and reduced absolute levels of inventory in the supply chain (notwithstanding strategic stocks to mitigate supply chain risks).
* Increased and deeper application of the principles of lean production out into the wider supply chain to cut cost and waste and improve flow
* Increased use of ICTs (Information and Communications Technologies) to improve visibility and responsiveness up and down the supply chain.