Logistics Strategy

1.Consider a manager developing a logistics strategy. Discuss specific situation for which the best approach would be to

a.Employ internal logistics expertise.

Internal logistics expertise is most appropriate when a large portion of the logistics system is within the company. For instance, in a situation where the goods are picked up from the manufacturer by the company's vehicles, stored in company owned warehouses and brought to the production facilities by own vehicles.

Such an expertise is very helpful also when the finished goods are delivered to the customer through owned vehicles and transportation.

b. Acquire a company with this expertise.

The acquisition of a company with this expertise is appropriate under two circumstances. First, when the acquired company has a well developed logistics network/system in a new geographical area in which the company wants to expand. Second, when the company is currently using a third-party logistics provider and wants to acquire this expertise to reduce costs;

c. Develop a strategy, and then employ specific suppliers to carry out well-defined portions of the strategy.

When the company is well-developed, makes large purchases, there are several suppliers competing with one another to supply goods to the manager's company, this strategy is helpful. For example, if the is a nationwide chain of departmental stores a, the departmental stores develops a strategy, and then employ specific suppliers to carry out well defined portions of the strategy. Such a departmental store can require its suppliers to mark its deliveries with RFIDs and track the deliveries from the time these leave the premises of the supplier.

d. Develop the strategy with a third-party logistics provider

This logistics strategy works when the logistics provider is a strong company. The logistics supplier plays an important role in the supply chain of the company and is instrumental in making/receiving deliveries. For instance, there are several...