Formulating logistics strategy pdf

Marketing mix is a greatest strategy for attaining competitive advantage for any firm. Useful concepts for logistics strategy and operations fgvcelog. For example, a few years ago a young engineerentrepreneur began to build a company from scratch. They point either to problematic phenomena, observed events that are puzzling in terms of our currently accepted ideas, or to problematic theories, current ideas that are challenged by new hypotheses. Strategy formulation is an entrepreneurial activity based on strategic decisionmaking. Generally speaking, the cost of logistics occupies 535% of the sales amount that constitutes an important item in cost of business. Concept of strategic logistics planning mba knowledge base.

In short, strategy implementation is managing forces during the action. Strategic implementation is mainly an administrative task based on strategic and operational decisions. While long term goals and objectives are important, the shorter term next three to five years opportunities are of more interest, as this is the timeframe in which the current supply chain strategy will operate. While larger organizations are more likely to have jobs related to strategy, this trend is not yet overwhelming. It appears that one of the priorities that is considered essential today by numerous firms is an understanding of logistics. According to persson, a logistics strategy should instead be formulated at the materials flow level.

The process of strategy formulation basically involves six main steps. Apr 29, 2010 strategic logistics planning is a unified, comprehensive, and integrated planning process to achieve competitive advantage through increased value and customer service, which results in superior customer satisfaction, by anticipating future demand for logistics services and managing the resources of the supply chain. More about how the business became a success, more about what inspired a normal working guy or girl to think of a novel and brilliant. Different studies have revealed different advantages, disadvantages and scenarios for adopting a lean or agile strategy for logistics and supply chain management.

Competitive advantage through logistics business essay. Their preference would be for a single central distribution hub from. Strategy formulation requires continuous observation and understanding of environmental variables and classifying them as opportunities and threats. Factors that influence effective strategic planning process. Strategy formulation at functional level is done by first line managers or supervisors sababu, 2007 in organization, the board of directors are responsible for the long term decision and corporate. Six steps to align supply chain with corporate strategy. It also involves knowing whether the threats are serious or casual and opportunities are worthy or marginal. Concepts that help with strategy formulation are evolving and information technology itself is changing, so the impact of one on the other is complex.

Nordic capitals aim is to introduce wilson on the swedish stock exchange in the end of year 2001. The first examined the potential for applying performance measurement in the. Strategy formulation is the process by which an organization chooses the most appropriate courses of action to achieve its defined goals. With todays development of supply chains, the logistics management has become the main target of an enterprise. Specifically, the logistics strategy should integrate with both the corporate and marketing strategies.

Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of organizational goals and objectives and thereby achieving the organizational vision. The basic objective of this paper is to fix the confusion of making a strategic choice by coats na about lean and agile logistics. Policy makers are interested in logistics performance indicators primarily because of the potential for improved transport services to promote economic development. Organizations with such job roles tend to show a higher degree of supply chain strategy maturity. A logistics strategy help coordinate plans, goals and policies between different partners across any supply chain. While logistical activities have been undergoing this fundamental restructuring. Functional level strategy is concerned with operational level decision making, called tactical decisions, for various functional areas such as production, marketing, research and development, finance, personnel and so forth as these decisions are taken within the framework of business strategy, strategists provide proper direction and suggestions to the functional level managers relating to. Premises the topic of formulating a strategy is a hard one to address in a short space of time. Economics and rural development dept business management and marketing hungary dr. Corporate strategy learn the 4 pillars of corporate strategy. It involves a number of steps which are performed in chronological order. Finally, i researched the strategy for logistics management of taiwan in sea freight after its entry into the wto for the reference of government in developing taiwan as the global logistics management center.

It follows that its success will be measured within the context of the performance of both of these. Strategy formulation means crafting a combination of strategies and picking out the best one to achieve the organizational goals and objectives and thereby reaching the vision of the organization. Strategic logistics planning is defined as a unified, comprehensive, and integrated planning process to achieve competitive advantage through increased value and customer service, which results in superior customer satisfaction, by anticipating future demand for logistics services and managing the resources of the entire supply chain strategic logistics planning carried out within the. Strategy formulation begins with defining a corporate. Strategies for marketing mix of 4ps for competitive advantage the marketing mix by 4ps is a conjuration and it can only be implemented by marketing managers. Functional level strategy is concerned with operational level decision making, called tactical decisions, for various functional areas such as production, marketing, research and development, finance, personnel and so forth. Call it distribution or logistics or supply chain management. On average, companies can potentially save between 20 58% on inbound freight spend. In short, strategy formulation is placing the forces before the action. Persson refers to these as strategic materials flow segments. Most companies focus on outbound logistics as this is a lowhanging fruit. Steps in developing a successful supply chain strategy.

When a company creates a logistics strategy it is defining the service levels at which its logistics organization is at its most costeffective. Factors that influence effective strategic planning. T kearney 2004 noted an increase in the complexity of logistics and supply chain environments that necessitates a better planning by logistics professionals. Strategy formulation introduction strategy formulation is the process by which an organization chooses the most appropriate courses of action to achieve its defined goals. Formulating transport logistics policy for sustainable. Logistics supply chain strategy and planning if you dont know where you want to go, any path will do. Then he must determine actions to achieve those goals with the resources he has available. These stories often leave us in a state of wonder and awe, and we find ourselves wanting to know more.

The table identifies the most likely steps using the logistics strategy part of the supply chain strategy as an example. Jun 01, 2016 the table identifies the most likely steps using the logistics strategy part of the supply chain strategy as an example. Changes made to either will require matching changes to the logistics strategy. Business strategy usually occurs at business unit or product level emphasizing the improvement of competitive position of a firms products or services in an industry or market segment served by that business unit. Formulating research problems r esearch problems are questions that indicate gaps in the scope or the certainty of our knowledge. Strategy for logistics and supply chain management. Strategy formulation begins with defining a corporate strategy this involves. Formulating research problems sage publications inc. Therefore, the logistics has always played an important role in the business. Strategy formulation and strategy implementation are the two most important phases of strategic management process.

As these decisions are taken within the framework of business strategy, strategists provide proper direction and. Strategy itself can be seen as a plan for an organization. Corporate strategy is different than business strategy as it focuses on how to manage resources, risk, and return across a firm, as opposed to looking at competitive advantages. Introduction a financing strategy is integral to an organisations strategic plan. Design of a knowledgebased logistics strategy system. Logistics approach framework current approach to market segmentation measure logistics strategy drivers specific approach to market segmentation channel identify key buying behaviours customer value analysis 23. Essential steps to a successful strategy implementation process. Leaders responsible for strategic decision making have to consider many factors, including allocation of resources, organizational design, portfolio management, and. Create a logistics strategy for supply chain management. Normally, companies change their strategy to reposition themselves and adapt or react to market opportunities and threats.

Pdf logistics strategy, organizational design, and performance. By whatever name it is the sinuous, gritty, and cumbersome process by which companies move material, parts, and products to customers. Though these steps do not follow a rigid chronological order, however they. It also clearly states key policies which will guide those actions. Chapter 2 developing a sustainable supply chain strategy. We keep hearing news stories and anecdotes about this successful business or that entrepreneur who hit the big time with his business idea.

Formulation and implementing a global logistics strategy. According to the apics dictionary, 14th edition, the strategy of an enterprise identifies how a company will function in its environment. Then the strategy needs to be communicated to the organization thoroughly and repeatedly. A conceptual approach to formulating logistics strategy 85. Strategic management is an ongoing process to develop and revise futureoriented strategies that. Because supply chains are constantly changing and evolving, a company may develop a number of logistics strategies for specific product lines, specific countries, or specific customers. Formulation and implementing a global logistics strategy emerald.

Strategy enable companies to formulate and achieve their objectives, allowing them to seize and take advantage of opportunities as they arise, at the same time, remaining in tune with their environment. Strategy formulation university of debrecen faculty of ag. Mexico is developing a national observatory for transport and logistics to. Supply chain strategies 1 china as a market should china be a key market for your business, proper location selection must play a decisive role in corporate strategies. Logisticssupply chain strategy and planning if you dont know where you want to go, any path will do. Apply project management knowledge in formulating materiel logistics strategies. A financing strategy summarises targets, and the actions to be taken over a three to five year period to achieve the targets. Business strategy falls in the in the realm of corporate strategy. Jun 2009 introduction it is useful to consider strategy formulation as part of a strategic management process that comprises three phases.

Identify the areas of your corporate strategy that are enabled by the supply chain. Align materiel logistics strategy to the strategic objectives of the organisation. Inbound logistics is one of the most overlooked aspects in logistics management. Traditionally, the formulation of logistics strategies to execute various logistics. A more recent entry appears in strategic planning for public and nonprofit or. Logistics development strategies and performance measurement. Strategic management therefore entails planned management activities engaged in, so as to realizepredetermined objectives outlines for a particular organization or business. Illustrated typology of possible logistics strategies 90. Factors affecting effective strategy implementation in a.

Developing and implementing a formal logistics strategy will. As such strategy provides for a better understanding of environment. In one case, a european car manufacturer had been looking for a new location for its distribution warehouse. This process is essential to an organizations success, because it provides a framework for the actions that will lead to the anticipated results. After recognizing the need for strategic change, the manager sets goals. Portfolio strategy the bcg matrix formulating businesslevel strategy porters competitive forces and strategies partnership strategies formulating functionallevel strategy strategy implementation and control leadership structural design information and control systems human resources implementing global strategies 8 strategy formulation and. Strategy formulation begins with defining a corporate strategy. Analyse materiel logistics information to determine where internal and external factors impact on the materiel logistics environment, and adjust strategic planning activities accordingly. Corporate strategy needs to define how you are going to be different and better than your competitors, and it needs to set specific, measurable goals. Logistics can spell the difference between success and failure in business. There are several ways strategy formulation can be done for a company. Essential steps to a successful strategy implementation.

It sets out how the organisation plans to finance its overall operations to meet its objectives now and in the future. Difference between strategy formulation and strategy. The roundtable was hosted at the mexican institute of transportation and focused on discussion of four input papers. Logistics can therefore best formulate its own strategy only by understanding the corporate strategy grant et al, 2006. Here are 10 steps which guide you in deciding the strategy of your company steps 1 to 5 mainly involve internal or external research as well as very long term strategy making strategies made in the first 5 steps affect the whole life cycle of the company.