Strategic logistics plans define how a business plans to deliver products or services to customers.
Some businesses don’t require as many steps in product delivery while others have many stages and steps. Address logistics in a methodical way that allows your business to scale operations or increase profitability. While every company has different needs, looking at logistics plan examples help business owners develop the right strategy for business development.
Warehouse strategies are highly dependent on the type of business in question. Companies with perishable goods like flowers need refrigerated warehouses that contain only enough inventory to cycle through short-term needs thus limiting waste. This strategy requires not just the warehouse infrastructure but a clear understanding at any given time of what fulfillment needs exist. A strategy like this might be highly contingent on seasonal demands change needs.
Other strategies such as building materials don’t need to worry about carrying excess stock levels because there is less concern with waste. An important strategy for a large warehouse physically positions frequently accessed items at the front of the warehouse closer to loading docks. This reduces time and energy spent loading and unloading items and gathering orders making the warehouse more efficient.
Not every company has large transportation needs, wheras others rely on transportation as the cornerstone for accomplishing business goals and product delivery. Transportation includes short- and long-distance trucking options, air transportation, shipping through ports and trains. There may be times where transportation strategies include several different transportation options.
For example, a lumber mill needs to get products from the mill to buyers. The lumber might start on a truck taking a load from the mill to a train. It may later get put back on a truck for delivery or port shipment. Business owners need to consider the costs and efficiency of each transportation method. Cargo ships must deal with port costs. There might be restrictions or permit requirements for truck shipments such as fireworks. As with warehouse issues, perishable items require refrigerated transportation, increasing costs and reducing delivery timetables.
Drop shipping is becoming more popular among small business owners. Drop shipping refers to inventory being held in a central warehouse, with orders compiled and shipped on demand. There are two drop-ship strategies. The first is when a business compiles inventory from different suppliers to get packaged on demand and shipped under the business’ label. This method usually involves some level of proprietary products and is considered inventory held by the business.
The second strategy uses a drop-ship, third-party inventory supplier such as Shopify. Suppliers list goods with these sites. Business owners establish an account with Shopify instead of the suppliers, and choose which products out of the thousands to include in the business model. Online orders then get processed in an automated system, with products delivered directly from suppliers on behalf of the business. Business owners have less control of consumer pricing in this model, but they don’t need to purchase and hold inventory.