To maintain service levels, efficiency and to respond to continually changing supply-chains, an organisation should deploy a formal Logistics Strategy.
An effective logistics strategy should encompass the following four areas within the logistics function.
- Strategy – The logistics strategy should review how the logistics function aligns itself to corporate objectives.
- Structure – The logistics strategy should examine the structure of the logistics function, such as the number of warehouses and distribution centres or what products should be produced at a specific manufacturing plant.
- Function – The logistics strategy should review how each department in the logistics function should achieve operational excellence.
- Implementation – The logistics strategy should be implemented using training, policies and procedures and an effective change management plan.
In order to ensure competitive advantage, the logistics strategy should explore at least the following areas to identify potential cost benefits:
- Transportation – Does the current transportation strategy support the required service levels?
- Outsourcing – Could outsourcing to a 3PL improve service levels?
- Logistics Systems – Are the current logistics systems fit for purpose?
- Competitors – Benchmark service levels against competitors.
- Information – Is data collection real-time and accurate?
Figure 14 shows the important elements of a strategic logistics plan:
Figure 14: The Logistics Strategy