“Of the many changes that have taken place in management thinking over the past 30 years, perhaps the most significant has been the emphasis placed on seeking strategies that provide greater value in the eyes of the customer.” This is how clear Martin Christopher expresses himself in his book ‘Logistics and Supply Chain Management’.
Companies and customers want to feel that the services and products they consume are not ‘commodities’. That is, generic products that are impossible to distinguish from those offered by the competition. To generate a bond and real satisfaction, it is necessary for the customer to clearly and tangibly perceive the additional value that their supplier is generating for them. That he has a reason to remain faithful and repeat the purchase.
To achieve this value creation, many companies have opted for logistics as one of their main arguments and differentiating elements. That is, they treat logistics as a competitive advantage.
Logistics as a competitive advantage
Following Martin Christopher’s theory, logistics has two axes through which it creates this competitive advantage. The axis of value (personalized services, reliability and responsiveness) and the axis of cost advantage (synchronized supplies, optimization in the use of resources, etc.).
As if they were dressmakers, logistics operators must dress as tailors and create logistics suits tailored to their customers. Understand your clients’ business, understand their needs and help you build solutions for your specific case. That is, to generate that value that is far removed from the mere transfer of merchandise from one point to another.
It is impossible to transmit a generation of value if we are not reliable. If we are ultimately unable to meet our deadlines or resolve issues when they arise. When the client puts something in our hands and feels that he can take it for granted and forget about it, we are on the right track. Whether it is when sending pallets or in any other business activity.
Getting the client to internalize that in us they will have an ally, a problem solver
The unexpected happens. No matter how good the suit that we have prepared for our client may be, a tear can always appear, either due to a failure or a new need. The ability to respond to these situations of tension is another fundamental point for the client to feel that contribution of value. Getting the client to internalize that in us they will have an ally to solve problems. Be reliable in the ordinary and decisive in the extraordinary.
Optimization of the use of resources
Effectively and productively using your resources is the quickest shortcut to cost reduction. A warehouse with a continuous flow, using all its capacity, refined and equipped with the necessary resources will be much more productive than one that is worse managed, with more irregular flows, underused and with less technological equipment. And the same happens with the design of routes, the occupation and rotation of vehicles, etc.
The specialization and volumes of logistics operators usually allow them to have more optimized processes, at the same time that it is easier for them to invest in logistics tools, as they can be used by more customers and make them more profitable.
However, the same principles are applicable when it is the company itself that is in charge of its logistics. The optimization of costs, together with the increase in value, will shape the competitive advantage of our logistics.
For too long there has been a conception of the supply chain as the mere succession of transport, without taking into account its integration. There was no true supply chain concept, but rather the sum of movements of goods from one point to the next.
However, this mentality has changed for a long time. The fluidity in the movement of merchandise from its manufacture to its consumption is a vital aspect for companies that want to be successful.
Storage costs, amount of product in transit or waiting in warehouses and that has not yet resulted in income, the time it takes for the merchandise to get from one end of the chain to another, just-in-time strategies, pull demands… These are just some of the processes especially susceptible to being optimized and with great importance if we want to exercise leadership in costs.
Generating value through logistics
Despite this integrating vision of the supply chain, in order to analyze the value chain it is necessary to examine each of the processes and sections of the company, not just contemplate the whole. This allows us to know if we are really contributing something differential in each one of them.
For example, in the generation of logistics value we can differentiate between supply logistics, internal logistics, outbound logistics, the relationship with points of sale, after-sales service, reverse logistics, etc. In each of these steps we have to examine what we do so that in the end the value chain that reaches the customer becomes a reality.
Do we have the infrastructure, the personnel and the technological means to generate value in each of them? Do we have the resources, knowledge and time to achieve it? Do we continually rethink how we do things to continually improve?
The logical consequence of these questions is to wonder what to do with all those points in which we are not creating a competitive advantage and, therefore, additional value for our client.
As a result of this type of analysis, the trend of companies towards outsourcing in all areas has increased. Where before there was reluctance in the face of these processes and they were interpreted as an additional cost by not being able to see the possibilities for improvement, now knowing how to delegate those functions in which companies fail to generate value or need help to achieve it is looked upon favorably. .