Dupré Logistics


The Supply Chain As A Strategic Asset

Thursday, April 24, 2014

Though the supply chain has traditionally been seen as a cost center for manufacturers, distribution companies and retailers, more of these businesses are taking a unique approach to the way they’re treating their logistics operations.

Many companies have begun to view their supply chain logistics as strategic assets, moving them from the liabilities side of the balance sheet. Not only can this methodology reveal hidden value that stakeholders have overlooked through applying the traditional approach, but it can also result in getting a leg up over your competitors. At the same time, seeing your supply chain as a strategic asset can help you better respond to customer needs and provide better, more timely, service.

Recovering Hidden Value

While many CEOs have increased confidence in the worldwide economy, they are still expressing critical concerns when looking at supply chain logistics. Current business uncertainties are continuing with a stagnant economy, leading to doubts as to profitable growth. As such, it’s necessary for executives to find ways to streamline operations, boost employee productivity, and improve the performance of existing assets, rather than downsize the supply chain.

One approach to seeing supply chain logistics as a strategic asset involves bringing more operations in-house, thereby internalizing both costs and benefits. The more modern view of the supply chain means thinking outside the box of the logistical constraints from decades ago. Freed from these chains, CEOs are making sophisticated decisions about geographical location for operations, automating certain sectors, and outsourcing labor.These executives are realizing that a strong, efficient supply chain is beneficial for customers, and provides value as a result.

Improved Customer Service

As more companies start to see their supply chain as a strategic asset, they should engage in further analysis. Logistics executives should place more of a focus on the opportunities they intend to target, and don’t be limited by customer size, location, or other components that they traditionally relied upon. Instead, they’ll highlight the needs of customers and see how the supply chain can be strategically adjusted to improve services. They can boost reliable services when they establish a supply chain that operates more efficiently, and can still be flexible for changes in consumer demand and the economy. These practices instill trust that enables companies to retain existing customers and attract new prospects,so it’s important to determine methods to add value while maintaining the same cost levels.

Competitive Advantages

While any changes to supply chain logistics should be driven by the goal of improved customer service, the bonus is that many companies gain an economic advantage over their competition by taking a strategic asset view. The pressures on a supply chain stakeholder are extreme and always building. CEO’s look at them to:

  • Boost customer service
  • Keep working costs to a minimum
  • Globally integrate operations
  • Maintain strong partnerships with both customers and suppliers
  • Remain flexible and responsive
  • Enhance sustainability
  • Achieve all these goals with fewer staff and less money

Fortunately, striking the right balance to all the competing interests has resulted in companies being better positioned to rise to the top of the competition. It also means that supply chain executives have a high level of input when it comes to formulating business strategy and policy.

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