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Developing an Effective Logistics Strategy

January 28, 2021 3PL

An effective logistics strategy acts as a playbook providing insight into improved visibility, demand planning and real-time data driven recommendations. Here’s how to develop and implement a logistics strategy for your supply chain.

Whether you’re a new company or have been in business for years, a small company or
a huge corporation, an effective logistics strategy is imperative for getting your customers what they
want, when they want it. Supply chain logistics is even more important due to the infinite amount of
variables that can affect production, accuracy, and speed.

By implementing a logistics strategy, your company can help streamline processes, identify and correct
system inefficiencies, and create opportunity for growth. Here’s a crash course on how to develop your
own logistics strategy and how a 3PL company can help.

What is a logistics strategy and why is it important?

One thing we know about the nature of the supply chain is the need for flexibility. With the constant
changes in the supply chain landscape, a logistics strategy can help your company easily pivot to meet
unforeseen challenges.

Logistics strategy “involves the planning, carrying out and management of goods, services, and
information from the point of origin to the point of consumption. Logistics aligns the complex pattern of
traffic and transportation, shipping and receiving, import and export operations, warehousing, inventory
management, purchasing, production planning, and customer service.”

In other words, think of your logistics strategy as a user manual for your supply chain. You will reference this strategy to
track, organize and oversee all aspects of your supply chain making changes and updates to continually
improve reliability, production and shipping timelines, and customer satisfaction.

Pre-planning: factors to consider

As we know, the supply chain has multiple layers that impact processes and operations, so it’s
imperative to examine each area when creating a logistics strategy. We recommend focusing on four
key components that directly impact your bottom line:

1. Outsourcing: Are you currently working with a 3PL or plan to in the future? How has the
partnership impacted service levels? These questions will help create a guide book for working
with an outside partner. In the logistics strategy, a clearly defined partnership with measurable
KPIs a data-driven approach will make tracking and assessing the partnership easier.

2. Technology: Are the current technologies being used in your supply chain providing the
support and data needed for growth? Is an investment in new technologies needed to improve
processes? Real-time data is crucial in today’s global supply chain. Therefore, it’s important to have a defined
plan for implementing new technologies when needed. It’s a costly and sometimes complicated
process that needs to be outlined in a logistics strategy.

3. Competitors: Never shy away from examining what your competitors are doing well, or not so
well. This insight allows your supply chain to evaluate changes and opportunities to improve
operations and customer satisfaction.

4. Company Alignment: Arguably the most important factor to consider when planning for a
logistics strategy is the alignment with organizational objectives and goals. The goal of creating
this type of playbook is to ensure the highest level of customer service while reducing cost. This
can only be accomplished through alignment with your company’s culture and business
initiatives.

3 tips for effectively managing a logistics strategy

Once the pre-planning and high level strategizing has taken place, it’s time for the practical
implementation of your logistics strategy. Remember, the main goal of a documented strategy is to
ensure the highest level of customer service, while spending the least amount of money.

Plan (don’t react)
Your logistics strategy will provide you with the insight and data to boost precision in your supply chain
operations. The days of reacting to shipment delays or inventory issues are eliminated with real-time
data integrations that provide visibility into all aspects of the supply chain. This demand planning allows
your supply chain to properly plan for hiccups and make sure that your customers are never affected.

Reduce Waste
Reducing waste is a key component to saving money. More and more supply chains are implementing
the LEAN process to manage waste. “Organizations adopting the ‘LEAN way’ are reducing cost and
eliminating waste from all facets of operations, from procurement of raw materials to shipment of
finished goods. The end result is an improved bottom line and higher customer satisfaction.”

Improve
Collecting data is only important if you use the data to improve efficiency and streamline processes. Key
Performance Indicators (or KPIs) allow your supply chain to benchmark performance and make
improvements where needed, all through data collection. Data integrations act as a dashboard to
monitor and manage your supply chain systems.

Putting your logistics strategy to work

Rising fulfillment and warehouse costs, inventory shortages, and an increasing demand for expensive
technology has left supply chains navigating a challenging environment. Here at WSI, we have over 50
years of experience helping customers operate their supply chains more efficiently, including planning
and executing a full logistics strategy. This dynamic strategy creates a playbook for guiding your
company through the ever-changing landscape of the supply chain. The outcome? A stronger, more
efficient workforce that reduces waste, improves customer service and grows your bottom line.

Need some help with your logistics strategy? Connect with one of our experts today!

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