Organizations can no longer afford to relegate logistics to the back office or shipping docks.
Weblogistix contends that a well-constructed SLM environment is a significant corporate resource on three important levels:
All business operations — from sales and marketing to manufacturing and supply chain execution to aftermarket service — rely on logistics. As outsourcing develops, so does logistics. Developing an IT framework that integrates and aligns logistics and information between all departments — such as sales and procurement — and suppliers will gain a significant cost and performance advantage.
At WebLogistix, we believe these new challenges are best tackled by strategic logistics management (SLM). SLM is a framework for interlinking a number of logistics application capabilities to frontline business operations and Enterprise Resource Planning.
SLM is the framework to bring together all information surrounding supply chain execution and planning for manufacturers, distributors, retailers as well as suppliers.
WebLogistix contends that a well-constructed SLM is a significant tool to achieve results on three important levels:
Strategic Decisions and Activities
SLM has a role in incorporating logistics into the decision-making process and long-range planning efforts of the organization. For example, having a complete understanding of the logistics-related impacts of cost and available replenishment capability timing can enable better sourcing decisions. Applying an understanding of the total landed cost is an important factor in controlling component costs and, ultimately, product margins. Other strategic challenges include:
Including ALL logistic costs (including tolls and tariffs) involved in establishing new plants or distribution centres.
Reducing safety stock of raw materials inventories by increasing responsiveness and inventory replenishment cycles.
Determining best sourcing for production by considering transportation costs but also logistic risks.
Understanding the true cost of working with suppliers — factoring in transportation, cross-border-related costs as well as disruption risks.
Understanding that not all clients require the same service level and hence adapting the Customer Order Decoupling Point for maximum responsiveness.
Operational Decisions and Activities
Providing a global corporate view of inventories from all locations and in-transit.
SLM also supports tactical operations for logistics execution command and control across the supply chain network. A supply chain has tactical execution requirements that need to be in place in order to make the operational side fully efficient. This entails having a responsive shipping network in place. Shippers must be involved with carrier negotiations, performance monitoring, information gathering and quality control evaluation processes. Considerations of cost, replenishment speed and frequency, delivery reliability are operational success factors. Other operational challenges include:
Providing customers with order and inventory visibility as a value-added service for a competitive edge.
Allowing suppliers to manage raw materials inventories.
Insight into inventories held by suppliers, distributors, fulfilment houses, and in-transit.
Eliminating emergency expediting — i.e., overnight airfreight shipments — to cover shortages, poor planning, or network disruptions.
Providing accurate order fulfilment schedules to customers.
Obtaining letters of credit and settlement of international shipments.
Settlement and payment processing
- Strategic Logistics Management: It's Not Just About Moving Goods Anymore
- Reverse Logistics Helps Straighten Kinks in Supply Chain
Tactical Decisions and Activities
Enforcement of preferred carrier usage
Finally, the SLM framework must be designed to provide day-to-day operations with the necessary flexibility to address last-minute changes and unforeseen events. The operational level works closely with total inventory, in-motion and at-rest, and uses the tactical command and control environment to monitor shipments and execute alternative scenarios when a planned event potentially disrupts the flow of goods. Other tactical challenges include:
Consolidating less than truckload (LTL) shipments into full truckload (FTL) shipments, when possible.
Using best routes and transportation modes.
Having proper shipping documents to meet import/export or regulatory requirements.
Rate discovery and carrier/shipper negotiations.
Early notification to the dock that a shipment will be late or incomplete.