The logistics business as a competitive advantage

How to overcome competition through logistics strategies

Logistics aims to meet the increasing demands of customers at the lowest possible cost, managing the flow of materials and information in every activity that makes up the logistics system, from the supplier to the end consumer.

As a result of its purpose, the logistics can put the company ahead of its competitors in two ways:

1. Advantage of providing value by offering services such as delivering faster or scheduled, product assembly, etc …, creating customer value.
2. Providing cost advantage, partnering with suppliers and business customers, making activities and processes more efficient, by compensating for the reduction of total logistics costs, etc …, putting on the market with lower prices than the competition.

A company can have advantage of value, for example, the small retailer to offer a differentiated service as prompt delivery of a wide variety of goods that can be bought in small quantities and with funding provided by the company itself, which may also include assistance technique.

One possible strategy used by the company is as follows:

• All products placed in a single distribution center to keep them available and reduce shipping costs and delivery times.
• Own vehicles to monitor and ensure the quality of service.
• Use of transit-points, which are sheds used only to spend a large amount of cargo that arrives there for smaller vehicles that perform the delivery to the end customer, making transport cheaper and reducing delivery time.
• Passive telemarketing and online at the company website queries to shorten the order cycle.
• Assets to increase sales and thereby increase the volume in less time loads in vehicles coming to and from the transit-points, optimizing the use of the fleet telemarketing.
• Information technology to provide better performance in the placement of orders, operation and management of storage and transport, through routing and vehicle tracking.

Have a business may have cost advantage by providing their consumers a wide variety of products at lower prices than the competition.

This company can achieve its goal through a strategy such as:

• Place several stores in locations relatively close, each other, and intense movement of people to save through bulk purchasing, reducing your costs in advertising and refueling.
• Owning distribution center and own vehicles to receive products from suppliers and direct them to the store replenishment, which enables the daily replenishment of stocks with less spending.
• Keeping prices daily to save on promotions campaigns and make it easier to predict demand.
• Establish large quantities and long periods with the most important vendor contracts and share information to reduce the cost of logistics.
• Constantly uses information technology to connect stores and suppliers to determine the required amount in stock to meet sales.

Because the market is increasingly demanding and fraught with uncertainty, there is a need for adjustment by firms. The implementation of the concept of Supply Chain may benefit both the company and for its business partners, with regard to the achievement of competitive advantage.

The concept of Supply Chain consists in the integration of logistics processes and procedures of other departments (suppliers, the main company and its business customers), to be efficient (lower cost) or differentiation in the activities (creating value for client).

To achieve its goal, the supply chain must be managed so as to meet demand with less inventory and lower supply capacity Product not stocked, and this is possible with the use of information technology.

Through the use of IT, when a request is made to a company, your dealer receives this information almost in real time and can forecast sales more accurately, make the supply, reduce costs and be more agile in the process chain as a whole. There are also cases of companies that have their vendor-managed inventory, which is also advantageous for all members of the chain.

In addition to the examples cited above, the use of IT, with good planning executed with strictness can become synchronized throughout the supply chain and provide fast service demand, identifying and solving problems.

As important as a logistics strategy is the identification of the costs and performance of operations and the general department.

Within this aspect we mention, albeit briefly, two important tools: Activity-Based Costing in Logistics (ABC) and the Balanced Scorecard (BSC).

The ABC Logistics measures in which the expense is to be held each activity or logistical process involved in producing a good or service, which allows to know which activities or processes which have higher cost to jail and what these costs. Moreover, it serves to evaluate the efficiency of activities and processes and show which customers, regions or distribution channels that give higher profit margin for chain and how the logistics contributes to this increased margem.Com such information, one can decrease expenses of operations or make services more efficient.

The BSC is a “meter that determines efficiency targets and indicators for each department of the company or each member of the supply chain must achieve to fulfill the strategy outlined business, favoring the resolution of the cause of the problems and the constant improvement of activities and logistics processes.

In conclusion, the logistics can give competitive advantage by reducing costs and creating value for the end customer by offering differentiated services using the concept of supply chain, information technology and management tools such as Logistics Activities Based Costing and the Balanced Scorecard , so there is a constant improvement of the performance of each member and the entire supply chain.

Source: www.administradores.com.br

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