Logistics Planning

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Date Submitted: 08/27/2011 07:16 AM

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Strategic logistics planning

A company can use different means to determine its operational logistics structures - e.g., overarching corporate, business and functional strategy.

1. Overarching corporate strategy

2. Business strategies

3. Functional strategy

1. Overarching corporate strategy

The impact of a company’s strategy on logistics

A production company’s top-executive leadership bears the responsibility of developing an overarching strategy that sets the business’ future course. Among other issues, these managers will decide whether the company will venture into new markets, develop new products or reduce its investments in particular areas. Most strategic decisions have a direct impact on logistics.

BCG matrix and its impact on logistics

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Growth, stabilization or reduction as a strategy

Overarching corporate strategies are geared toward the development of the entire company and encompass its overall business activities. Depending on the development goals, these strategies can be divided into growth, stabilization and reduction strategies. These strategies - depending on their form - have different effects on logistics and, as a result, require adjustments to be made to logistics systems.

Portfolio concepts play a significant role in evaluation of the overarching corporate strategy. They are based on the assumption that the variety of strategic variables that can be determined with the help of corporate and environmental analyses can be condensed into two key factors: an environmental component and a corporate component. The company’s product-market combinations can be classified by means of a matrix that is created on the basis of these two strategic success factors.

The BCG matrix is probably the best known such matrix. It uses market growth as its environmental component and relative market share - in relation...