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Logistics /Supply Chain Strategy - Functional Strategies

   Posted On :  26.06.2018 09:59 pm

Logistics/supply chain strategy deals with the flow of products into and out of the manufacturing process. Three trends are evident.

Logistics /Supply Chain Strategy
 
Logistics/supply chain strategy deals with the flow of products into and out of the manufacturing process. Three trends are evident.

             Centralization,
 
            Outsourcing, and
 
            Use of the Internet.
 
To gain logistical synergies a cross business unit, corporations began centralizing logistics in the headquarters group. This centralized logistics group usually contains specialists with expertise in different transportation modes such as rail or trucking. They work to aggregate shipping volumes across the entire corporation to gain better contracts with shippers. Companies like Amoco Chemical, Georgia – Pacific, Marriott, and Union Carbide view the logistics function as an important way to differentiate themselves from the competition, to add value, and to reduce costs.
 
May companies have found that outsourcing of logistics reduces costs and improves delivery time. Many companies are using the Internet to simplify their logistical system. For example, Ace Hardware created an online system for its retailers and suppliers.
 

Coordination

 
The functional strategies can be effective only when they are aligned with corporate strategies and integrated with one another. One must understand that strategies must be coordinated to have a vertical fit which aligns the functional areas. Simultaneously, horizontal fit leads to alignment of activities. Table 14-2 shows the impact of strategy elements on operations and R&D management. 



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