Importance of a Strong Logistics / Distribution Plan
The science of logistics was created on the battlefield out of necessity to win wars. Military logistics was the science of supplying equipment to the troops on the battlefield. This knowledge was then applied to business practices in the 1950’s as a global economy started to evolve. Logistics now refers to the process of supplying businesses with the full range of services of products, including the procurement of raw materials to the shipping of the final products.
Logistics
Logistical science is now commonly applied to the following business areas:
- Information
- Transportation
- Inventory
- Warehousing
- Materials
- Security
- Packaging
- Disposal
A strong logistics program is important because it provides an edge over the competition by providing customers with a higher level of order accuracy in a shorter period of time. When consumer needs are consistently being met customer relations improves as a result. Hopefully this will translate into additional business from existing customers and the acquisition of new clients. Satisfied customers are usually more than happy to share their good experiences with others especially when incentivized
A strong logistics program also ensures the right amount of raw materials is available to produce the right amount of finished products available at the right time for sale to consumers. Inventory is tracked, transportation is monitored and storage is coordinated to meet all organizational needs. Controlling the flow of products from initial receipt to final shipment is important and ensures the desired level of customer satisfaction
There are five Rights to Logistics. A successful logistics program will accomplish all of them.
- Supply the Right Product
- In the Right Place,
- At the Right Time,
- In the Right Condition
- At the Right Cost
Distribution
Distribution planning and channels provide sales to customers out of your reach either geographically or because your sales team is not able to service these potential consumers. A wide variety of distribution options exist including wholesalers, retailers, distributors and the Internet. Control and monitoring needs to be carried out to ensure there is consistency when others are selling your products.
Reach-To expand your reach identify what areas support growth and then partner with a distribution network that provides coverage in that area.
Cost-During this phase of distribution planning, consider which is more cost effective; partnering with an existing channel or creating your own. Keep in mind when developing your own network, resources will need to be committed to order processing, invoicing and customer service.
Contribution-Find a channel providing access to additional customer bases since there will be no additional cost for direct sales and marketing.
Support-Providing support to a distribution channel is critical to success. Assign an in-house manager to oversee the relationship and ensure all needs are met to meet customer expectations.
COMING SOON – Supply Chain, Transportation and Logistics Services
Contact us to learn about how to implement or enhance a logistics program and carry out a successful distribution plan. We are here to discuss your most important business issues. Schedule a free evaluation by calling us at (973) 998-9801