What is a logistics strategy? 

Implementing a logistics strategy consists of a set of rules, processes and policies that help a business coordinate plans to find efficient and cost-effective ways of distributing goods. A comprehensive strategy prioritises the need to maintain a certain level of business performance and customer service. 

Why is a logistics strategy important? 

Regardless of the size of a company and the industry in which they operate, a logistics strategy is important to assist with identifying and navigating changes within a supply chain. Logistics planning can identify potential impacts and how to best proceed under different circumstances, without further disrupting business processes and continually meet logistics demands. 

This strategy allows a company to become more flexible, where changes to functions or procedures can shift if necessary, to maintain high levels of business performance and customer service.

Logistics strategy vs. supply chain management 

While sometimes a logistics strategy and supply chain management are terms that are used interchangeably, a logistics strategy is only part of the whole supply chain management process. 

Supply chain management is the outlook on the entire journey of goods, being the coordinated efforts included in overall sourcing, processing and delivering goods to the end customer. 

The logistics aspect within this process plans and controls the efficient and effective movement of goods to enable other areas of the supply chain management process.

Five tips for an effective logistics strategy

1. Use accurate data 

Using accurate data can assist with business decisions to plan for future demands, projects and potential changes in a supply chain. From forecasting spikes in demand due to seasonality trends, to discontinuing a product, accurate data can help paint the picture of the potential future. Such data can help to lower overall costs, meet the growing demands of customers and importantly, change any logistics plans to suit current and future needs. 

2. Stay connected with all stakeholders 

A connected supply chain that communicates easily and regularly has a great competitive advantage to those who work in silos. Open and transparent communication can strengthen supplier and customer relationships, building trust among all stakeholders. 

3. Focus on customer satisfaction 

Keeping the end user in mind when creating a logistics strategy allows a company to connect with the right suppliers at the right times to ensure customer demands are consistently met. Focusing on customers' needs and expectations can help develop a strong and comprehensive logistics strategy that assists with building relationships between a company's suppliers and customers. 

4. Use available technology 

Developments in technology are shaping the future of the logistics industry and there is no sign of these changes slowing down. Utilising order tracking capabilities, e.g. IoT (Internet of Things) and new manufacturing technologies, e.g. 3D manufacturing, can greatly benefit a logistics strategy through improving operational efficiencies. 

5. Remember to review 

Lastly, it is important to review logistics strategies to ensure they continually meet business and customer benchmarks. Making small changes to a strategy can see large impacts to costs and efficiencies later down the track. Understanding where opportunities may lie and what changes are required within logistics planning is essential to improve supply chain and logistics resilience. 

The role of Standards in logistics planning 

While logistics planning can be complicated, Standards can assist with guiding organisations towards a best practice approach to implement effective strategies. Starting with terminology, the Standard EN 14943:2005 defines the glossary of terms for transport services and logistics, helping clarify terms and avoid confusion between companies, stakeholders and even countries. 

For logistics performance measures and requirements, CR 13908:2000 can help. This Standard relates to effectiveness, efficiency and associated factors in the areas of logistics management, systems and equipment. 

For end-to-end visibility of the logistics flow, the international Standard ISO 23354:2020 provides the business requirements for the visibility of logistics traffic flow based on use cases. 

Standards provide the benchmark for every aspect and output a business should meet. They can provide a framework for any business in the supply chain to improve efficiencies and consistently deliver through structured processes and strategies. 

The importance of logistics planning and strategies 

Businesses will constantly need to navigate changes in a supply chain due to the global and dynamic nature of the logistics industry. It is important for a company to take steps to future proof their logistics strategies to ensure it can continue to play a role in supporting the holistic efforts of the business.  

Meeting customer demands using effective strategies helps provide the competitive advantage required for long term success.