Brant

CHAPTER 3 Strategic and Financial Logistics

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Learning Objectives

• To appreciate how logistics can influence an organization’s strategic financial outcomes • To review basic financial terminology • To understand how the Strategic Profit Model can demonstrate the financial impact of logistics activities • To become aware of some of the more common measures of logistics performance

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Strategic and Financial Logistics Key Terms

• Assets • Asset turnover • Balanced scorecard (BSC) • Balance sheet • Cost leadership strategy • Differentiation strategy • Expenses (costs) • Focus strategy

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Strategic and Financial Logistics Key Terms

• • • • Income statement Liabilities Net profit margin Owner’s equity • Return on assets (ROA) • Revenues (sales) • Strategic Profit Model (SPM)

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Connecting Strategy to Financial Performance

• Logistics managers must find ways to:

– communicate how logistics capabilities provide value – support corporate strategy and success in financial terms.

• Logistics resides at the functional level of the organization. • Functional units must translate corporate and business unit strategies into discrete action plans.

© Pearson Education, Inc. publishing as Prentice Hall 3-5

Connecting Strategy to Financial Performance

• Three generic strategies that can be pursued by an organization

– Cost leadership strategy – Differentiation strategy – Focus strategy

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Connecting Strategy to Financial Performance

• Functional level strategies exist in:

– Marketing – Finance – Manufacturing – Logistics

© Pearson Education, Inc. publishing as Prentice Hall

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Connecting Strategy to Financial Performance

• Logistic strategy...