Logistics and Supply Chain Article Analysis
Logistics is defined as the monitoring of procurement, planning, execution and movement of materials, communication, service and capital flows with the aim of attaining an objective or a strategy. It might also be defined in other terms as the management of inventory both on transit and in rest. According to Robeson (1994) logistics did not play a crucial role in the success of the company. The meaning of logistics was not well known and accepted in the 1970s and its function was mainly known as distribution of finished good and the receiving and storage of raw materials. In recent times, logistics has gained acceptance by most businesses, industries and markets. In addition, the crucial role of supply chain management has created competitiveness as well as company profitability which have in turn made logistics an important strategy (McGinnis & Kohn, 2002).
In strategic logistic planning, change is inevitable in order to succeed in the competitive global economy. Change comes in various forms which include faster delivery of products and service, sophisticated technologies and differentiation of products. The reason for all this is to have a responsive and more dynamic logistic system which gives the company a competitive edge (Robeson, 1994). A logistics strategy will only give a company a competitive advantage if the company can provide the products and service when they are needed by the consumer and at the right time.
In the twenty first century, people have become very busy and it is difficult for them to go out to a store and shop for what they need. Most companies have developed strategies on how to meet the needs of these customers. Best buy is an example of such a company that has developed strategies to attract such consumers who are willing to make a purchase, but do not have the time to do so. They provide catalogues for these customers who after selecting what they wish to buy, through the website, their products are delivered to them right on their doorsteps. This is a convenient way for the customer to make a purchase without physically going to the store. There is a growing need for such kind of convenience in the world. This need has directly affected the supply chain where the company is required to not only deliver to the different distribution points, but also directly to the customers. This type of distribution comes with its advantages because a company representative interacts directly with the customer and is able to gain information on the different needs the customer wishes could be met. A flexible logistic strategy is very crucial for the success of a business and for effective competition (Robeson, 1994).
Effective management of logistics and supply chain is crucial in satisfying customer requirements for a product or service. It is important that the products or services are supplied to the customer at the right time and at the right place at a minimum cost. Poor logistics which might include a poor location can have severe implications on the whole company. The effective movement of goods and raw materials from the point of manufacture to the final consumer is very important in today’s business environment (Lingham, 2008). The location of the supply chain should be in such a way that the consumer is able to access the product or service with ease. Choosing a poor location would have negative implication meaning that the consumers would prefer to buy products or services from other competitors. This makes it hard for the company to compete in the industry. Having poor location affects distribution negatively making it very expensive to supply the products which will mean that the price for the products will be higher than the price set by other competitors making it hard for the company to thrive in the industry (Lingham, 2008).
The choice of transport is very important in ensuring that products are delivered to the consumer in time. The time between the order and the delivery should be minimized so as to meet the needs of the consumer in the shortest time possible (Lingham, 2008). With the aim of reducing transport costs, different companies have been known to use the slowest means of transport which are obviously cheaper. This will impact negatively on the relationship between the company and the customer. The customer will most likely not accept products or services from that same company in the future due to late deliveries.
Today everyone is looking for convenience and will buy products and services from a company that will be able to deliver required products within the shortest time possible. The biggest change that has occurred in logistic strategy planning is the use of technology to learn about customer needs and offer deliveries fast. The internet has become the most convenient way to buy products and services. Most companies have developed websites where with one touch of a button, the customers are able to view all the products available and the easiest ways to get the products to them in the shortest time possible.
Finally, logistics and supply chain management is very vital for the success of a company. If the logistics are well structured to meet the needs of customers and offer the products in the shortest time possible, then this will give the company a competitive edge in the industry. However, if a company has inappropriate logistics, they will be unable to retain customers and venture into new markets. Their business will be overshadowed by other competitors because customers tend to prefer products from a company that meets their needs, delivers on time or makes the products easily accessible.