Depending on the number of products or services, its customers and the number of locations, a company creates its logistics strategy based on these factors. Very simply, the term ‘logistics strategy’ is the definition that a company uses to describe its service levels in the situation where its logistics organization is cost-effective in its operations.
But why should an organization have a logistics strategy in place?
With the supply chain constantly evolving and changing, it is obvious that these changes could also affect the service levels of its logistics organization if a strategy has not been put in place that will not only allow for flexibility with these changes but also ensure that service levels are not reduced in identifying the impact of these changes as well as taking steps to make organizational and functional changes.
Normally, companies develop these strategies by looking at four levels within their logistics organization.
Strategic – This level is approached by looking at how the logistics organization matches up to the company’s objectives as well as the supply chain decision.
Structural – At this level, the structural issues of the logistics organization should be taken into consideration.
Functional – In this step, one should examine how each function can achieve high service levels.
Implementation – Finally, this step should take a close look at how the logistics organization strategy can be implemented successfully at all levels in the organization.
In addition to these levels, there are important components that one must examine in developing a logistics strategy. There components include transportation, outsourcing, logistics systems, its competitors, the flow of information and the company’s overall strategy review.
