Trade-offs In Logistical Activities and How They Benefit the Client

Posted : 03/10/14 8:44

Logistics is the way your company organizes its transportation, warehousing, inventory, customer service and information processing systems. There are always tradeoffs in business. Do you keep larger inventories of your products, resulting in increased warehousing costs, more waste in outmoded or outdated product on the shelf, and higher management costs? Or do you reduce the inventory to save money but risk insufficient product to fulfill demands? These tradeoffs are different for different businesses, but all businesses have tradeoffs that must be considered. Firms often re-organize their logistics in an attempt to improve their transportation, inventory, and infrastructure. Deciding when, what and how to reorganize is a problem faced by companies worldwide every day. The down side of tradeoffs is that nothing is guaranteed. Your decisions to reduce inventory, increase prices, or maintain the status quo can result in potential benefit and/or harm to your customers and to your business. Considering the pros and cons of tradeoffs to your clients can sometimes help identify the solution during the process. Effective Supply Chain Management results in an opportunity to discover the best tradeoffs for your clients. Processing, planning, implementing and controlling your business ensures efficiency and cost effectiveness. The process or steps that change your product from its raw materials into the finished product is your supply chain. Managing that chain of products, and ensuring the efficiency of the steps to achieving successful delivery, is called Supply Chain Management (SCM). Here are some potential benefits to your clients that effective and efficient SCM can provide:
  • Reduced Costs: Improving your bottom line can result in bringing the costs down for you and for your consumer.
  • Better delivery: As you research and improve transportation methods, the delivery of your product to the end user will improve.
  • Enhanced Product Conformity/Reliability: Improvements to your product based on research, design improvement and adherence to standards results in better reliability and performance.
  • Better Service: As you explore methods to better serve your customers, overall public perception of your product will improve.
  • Customer Satisfaction: Your customer will be more impressed with your product, and therefore more apt to continue to purchase, use and enjoy it.
  • Better Technology: When you add technology to the development of your product, you improve the technology of the end product itself.
  • Better Availability: As you increase your methods of delivery, shelf stocking, sales, and product distribution, your customer benefits because your product is there when he needs it, where he needs it.
Cohesive and efficient SCM results in improved products for your customers. That is the bottom line that all organizations need to remember when considering logistical tradeoffs.