Logistics and Supply Chain Management Basics
Logistics and supply chain management are very interwoven. First, logistics is a piece of the supply chain. This depends on our industry and the type of products we produce or the type of products we deal with.
From this, our supply chain can vary and can encompass all types of different things. Factors include getting products on time and making sure that we prepare our warehouses. This means making sure our warehouses have space and that we’re moving freight in a timely manner. We have to make sure that we’re managing the entire lifecycle of that product. That’s what our supply chain is all about.
The logistics piece of that can fit in in a few different places. As a logistics expert, we tend to look at logistics as the entire supply chain. That can be a little bit short-sighted. It’s important for us to understand that. It’s the same for a logistics business, a logistics service provider, or as a logistics expert. We fit into the supply chain. We provide a very critical role in the supply chain, but it is only one piece of the entire supply chain.
Helping Our Customer is First
When it comes to logistics, we understand that we help our customer as a part of their own supply chain. Also, we’re helping them to deliver their products in different areas. Our role in that can be vital to make sure that the warehouses are being stocked the proper way. Also, we must make sure that we’re getting our product all the way to the shelf.
When we look at our customers, we look at them as logistics experts. We remember that each customer is in business to manufacture a product. But it’s not good enough to manufacture the product and get it out their door. It’s important that we’re helping that customer with their entire supply chain. We’re helping that customer get the products they need to do the manufacturing. We’re helping that customer get the products out their door and into their warehouses. Or we’re helping that customer get products from the warehouses to distribution centers. Or it could even be to the shelves, depending on what part of the supply chain they work with. We’re providing the most value for where they have the most need, from a logistics perspective.
Negotiation for Logistics and Supply Chain Management
Negotiating is a critical piece of the logistics and supply chain process. Logistics and supply chain management is a wide net that we drop to make the supply chain a reality. Our ability to negotiate becomes critical in that process. This is because there are so many variations to the way that we move our products. Or because there is variation in the way that we manage our supply chain. This can vary for simple things, like the cost that we spend in warehouses.
It could also be the cost that we spend in the break-bulk process. It could also be the time and money that we spend leaving things on a truck for an extra day. This could be because we can’t unload it in our warehouse. All these things are important negotiation steps. We don’t have fixed pricing across the entire supply chain. It’s not like we can ship something through the post office where we know a letter is always the same price.
Consider the supply chain and management of logistics. Each one of the components of our supply chain can have drastic variations. Also, negotiating the best rate is important. Particularly one that works for the carrier, the customer, or the provider. We want to build strong relationships and have cost-effective freight. So balancing out those two things is very important in the negotiation process. It’s very important in the negotiation process to ensure that we succeed in both those areas too.