Where Does Logistics Fit?
If you think about logistics, and especially if you think about trucking, it’s always been seen as a cost or expense center and not as a strategic driver. As a result, CEOs and senior executives often under-allocate their time in this area because they don’t think there’s anything to be gained by spending more.
What does the CEO or any other senior executive need to know, what do they need to understand, and why do they need to be engaged in what their company is doing in the area of logistics generally and trucking specifically?
Manufacturing businesses make large investments in equipment and other required items. Service businesses make large investments in people and IT. But what are the critical elements about getting that value to customers?
Modern companies have very sophisticated supply chain needs. They can’t afford to suddenly run out of something they need, but they also cannot afford to stock “extras” just in case there is a greater demand than expected. For this reason, supply chain needs must be completely integrated into the overall operations of the business. Without having a high level senior executive who understands where logistics fits into the overall picture sitting at the table, this balance is destined to be under-represented.
Well-coordinated logistics systems that are fully integrated into the overall business and marketing plans of a business can save a company substantial money that never shows up on the Profit & Loss statement. It is important that companies view this part of their business as much more than a simple expense line item.