How to Develop a Logistics Strategy: Designing & Implementing

If your company uses any materials to provide services or sells any products to your customers, then your company has a supply chain. Within the supply chain strategy, you will need a solid logistics strategy that focuses on transportation and storage of goods and movement of information to support your supply chain. If you’re working to develop or improve your business’s logistics strategy, keep reading for advice and tips on how to make it as efficient as possible.

The Importance of a Logistics Strategy

Logistics is the process of transporting, storing, and distributing products and materials needed for your business. The goal of logistics is to provide optimal transportation and storage costs supporting your company’s overall customer service goal, which makes having a comprehensive logistics strategy important to ensure efficiency and cost savings.

There are many components to these strategies, such as the following:

  • Transportation (including mode and pricing).
  • Support of strategic customer service goals.
  • Understanding and allowance of lead times externally and internally.
  • Storage (warehousing and distribution).
  • Packaging — protection while in storage and proper for the mode of transportation.
  • Documentation/information internal and external.
  • Picking of goods.
  • Customs documents.
  • Shipping documents (pricing agreements, bill of lading).
  • Invoicing customers for goods.
  • Payment of carrier invoices.
  • Proper services during storage, transportation, and delivery of goods.
  • Risk evaluations.
  • Contingency planning.
  • Adjustment to overall supply chain strategies.

Developing a Logistics Strategy

Developing a logistics strategy starts with focusing on the customer. You should use data and information on your current logistic process, examining each aspect to align to provide the optimal service level and cost. The best way to accomplish this is to take each significant task and break it into three segments:

  • Long-term strategic support (capital changes, what-if, and modeling).
  • Practices and policy to adjust to anticipated issues and react to both unknown and anticipated events.
  • Tactical (daily) operations and practices.

Dividing up the development process like this allows you to assign the proper resources to each.

Implementing a Strategy

As you start to follow your new strategy, keep in mind you may need to make adjustments over time. The world is always changing, and people and companies must change to adapt and improve.  As your supply chain grows and expands geographically, there can be more disruptions due to nature and political forces. Recent events throughout the world and domestically have demonstrated how vulnerable the extended supply chain is to even small or local events. As these events occur, you and your company may need to consider changing your geographical footprint.

Changes you may want to consider with your logistics strategy may include on-shoring or near-shoring of vendors or manufacturing, adding vendors, changing ports of export or entry, or adding or closing warehouses. Having a well-defined strategy provides the baseline for tactical improvements and the foundation for modeling what-if scenarios to determine risks and adjustments of current logistics functions or modeling longer-term strategic changes.

Let Nexterus Provide Your Logistics Solutions

Nexterus is a full-service supply chain technology and management company with the means to help you create an efficient supply chain. We have the expertise and resources to assist in modeling, what-if scenarios, risk assessment, adjustment to overcome immediate changes in the flow of goods, mode selection, improvement of document processing internally and externally, analysis of data from vendors and customers, carrier pricing review and negotiation, and deep dive reviews of individual actions and trials affecting customer service and increasing costs.

Contact us today to learn more about what Nexterus can do to improve your company’s logistics strategy.

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