If last week we saw the logistics tasks and activities, this week we are going to focus on their purpose. In which are the objectives of logistics; that is, the final reason why all the previous actions are executed. Beyond the movement of materials from one place to another, logistics pursues broader and more strategic challenges for both its customers and its environment.
What are the objectives of logistics
Generate value
As we have said before, the objectives of logistics are not the mere movement of products. The key lies in generating value for the client through this process. This can be achieved in various ways: speed of delivery, quality of information and traceability, achieving synergies for the supply chain, cost reduction thanks to optimization, etc.
Surely the best proof of this generation of value is that more and more companies are including their logistics virtues in their customer value proposition, and even making it their central proposition. This is the case of retailers and brands that are increasingly fighting to be able to offer deliveries in less time, with more defined margins, at delivery points other than the recipient’s home, etc.
But it also generates value for them to be able to refine their production processes, being able to predict their needs and the times required for each step. This is also the case of philosophies such as Just in Time, which require very demanding logistics.
Strengthen the relationship with customers and suppliers
Workers who are related to logistics are more aware than anyone of the influence that this has on the relationship with customers and suppliers. Achieving a good logistical relationship – achieving the agreed results, a good customer service and incident resolution system and good information channels – greatly improves the perception that the rest of the actors have of our firm.
In this way, if we manage to have good logistics, we will be better considered by our company’s stakeholders. Not only by customers, but also by collaborators and suppliers. What creates a virtuous circle that will have a favorable impact on us.
improve service
All companies in the world want to provide better customer service. And, in turn, few activities have as much influence on customer valuation as logistics. E-commerce is one of the paradigmatic cases and on which most of us have experience as buyers. Regardless of the quality of the product, the process of receiving the order is already going to mark our shopping experience, and can even overshadow the product itself in the case of a negative experience.
Cost savings are not limited to error reduction
Cost optimization
A good way to see logistics is not to interpret it as an expense, but as the constant search for the optimization of costs that will always be necessary to face. Logistics can help us in this process in various ways. For example, if we manage to meet our deadlines, we will avoid having to resort to urgent shipments that would otherwise have been unnecessary, or if we manage to reduce errors, we will reduce the additional associated costs (replacement, penalties, overtime, increased spending on customer service). client, etc).
But these savings are not limited to errors, but can -and should- take place on a day-to-day basis, regardless of incidents. Optimizing logistics (route design, use of vehicles, inventory management, shipment preparation, process management…) will allow us to do more at a lower cost.
Environment
Caring for the environment is one of the increasingly present objectives of logistics. As responsible for the transit of goods throughout the world, logistics plays a fundamental role in the fight to reduce the carbon footprint of such an intensive activity. And there are many initiatives in which it is immersed to make it so: adaptation to regulations such as the Euro 6 regulation on vehicle emissions, the development of new clean engines such as LNG, technological advances to improve routes -reducing kilometers and avoiding traffic jams-, etc.
This concern for the planet can also be included in the generation of value for the customer. Companies are increasing their interest in green policies and transfer this interest to their suppliers, often turning it into requirements and demands that they must comply with. In this way, environmental logistics has an impact on the benefit of society and that of companies, feeding back.
Social Value
Care for the environment is not the only beneficiary of logistics work. Logistics is critical for the functioning of the economy of the countries. A country that has transport infrastructures that facilitate its work and consolidated logistics operators will be facilitating the growth of its economic fabric.
The easier it is for companies to work – to send and receive materials and products – the better they can grow. On the contrary, in countries with poor communication routes -by land, sea or air-, in which logistics activities are carried out precariously -pirates, dangerous areas for transit, abusive restrictions…- or where there are no companies that can provide the necessary logistical support, businesses will have to face additional difficulties and worse costs when deploying their activity.
Finally, a value of logistics for society that often goes unnoticed is its help during disaster situations. A good logistics network can help alleviate, for example, the problems of natural disasters. The stronger the logistics infrastructure in the affected area, the less serious the consequences of these crisis episodes. And even in the worst cases, logistical coordination in the arrival of aid from abroad will be essential to alleviate the consequences.
Through these two articles we have seen the activities, tasks and objectives of logistics. From moving by truck and optimizing a route to creating value for the end customer. From the particular and most practical to the most strategic at the business level. From the work of the operator who prepares an order to the benefits of logistics for society. An exciting journey that encourages us to continue working every day.
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