Is Your Logistics Strategy Any Good? 4 Suggestions For Making It Better


It might not be the most exciting subject in business, but logistics is essential nonetheless. What’s more, because it’s something that many companies never really focus on explicitly, it’s something you can use to get ahead of the competition. 

But what exactly is a good logistics strategy? Here’s what top entrepreneurs who have leveraged it to benefit their businesses have to say about it. 

Understand The Business Mission

According to Richard Wilding, Professor of Supply Chain Strategy at Cranfield, the key to a successful supply chain is first understanding the mission of the company. As Wilding sees it, the supply chain itself is secondary to what the company hopes to achieve. It’s the operational execution of the business plan. 

As such, it needs to be cost effective. But many companies get logistics wrong, spending too much money on half of their customers with functions they don’t need, and too little on others who want more from their service. Wilding says that businesses need to drill down into the details, meeting with other individuals in their supply chain to find out what exactly it is that they want. 

Start Practicing Demand-Driven Logistics 

According to Keith Biondo, the publish of industry magazine Inbound Logistics, the most important aspect of any logistics strategy is practicing demand-driven logistics. In essence, it’s making sure that your supply chain is able to effectively balance supply with demand in the market by partnering with flexible trucking companies and implementing smart inventories. According to Biondo, companies who use demand-driven logistics are able to reduce their transportation costs, save on inventory space, and provide better services to their customers. 

Use Volume To Reduce Prices 

To be cost-competitive, you need your prices to be as low as possible. But getting them low can be a challenge, especially if your costs are mainly dependent on your supply chain. According to Shawn Casemore, the founder of a management consultancy, companies should leverage their bulk buy negotiating power to drive down prices in their supply chain. This means actively approaching their suppliers and offering to buy their products cheaper while at the same time, guaranteeing longer contracts. 

If you position yourself correctly, Casemore says that it’s possible to get discounts on freight and reduce courier rates. Often, you’re able to bag a top quality carrier as a partner at bargain basement prices. 

Make Use Of Technology

Logistics used to be a pen and paper industry. But today, things are a lot more streamlined, thanks to digital technology. Raad Mobrem. The CEO and co-founder Lettuce runs a company that helps businesses save money by using technology. He deals with all aspects of business, from accounting to processing to inventory. Over time, he’s found that technology can be a compelling way to cut costs and improve bottom lines. He has shown how apps and web portals can reduce costs by getting rid of the middleman, effectively allowing companies to manage their logistics from a computer screen. The elimination of repetitive data entry, he says, is crucial.





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Published by Michael J Schiemer
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