LOGISTICS STRATEGY
Logistics strategy deals with the flow of products into and out of the manufacturing process.
Three. Trends related to this strategy are evident:,, centralization outsourcing and the use of the
Internet. To gain logistical. Synergies across business units 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
such, as 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.
Many companies have found that. Outsourcing logistics reduces costs and improves delivery
time. For example HP contracted, with Roadway Logistics to manage. Its inbound raw materials
warehousing, in Vancouver Canada. Nearly 140 Roadway employees replaced 250, HP
workersWho were transferred to other HP activities.
Many companies are using the Internet to simplify their logistical, system. For example
Ace, Hardware created an online system for its retailers and suppliers. An individual hardware
store can now. See on the Web site that ordering 210 cases of wrenches is cheaper than ordering
200 cases. Because a full pallet is composed. Of 210 cases, of wrenchesAn order for a full
pallet means that the supplier doesn 't have to pull 10 cases off a pallet and repackage them
for, storage. There is less chance that loose cases will be lost, in delivery and the paperwork
doesn 't have to be redone. As, a result. Ace 's transportation costs are, down 18% and warehouse
costs have been cut 28%.
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