Understanding what a logistics footprint is, and why it should be as small as possible can make the decisive difference in competitiveness for a company. But how can a business tackle the size of its logistics footprint? And why does a good warehouse strategy play an important role in doing so? In this article, Inchainge discusses everything you need to know about the logistics footprint.Topics in this article
The logistics footprint is the size of logistical support that businesses require in order to move a product to the customer. The footprint includes all the activities that are undertaken to maintain these logistic operations. For instance, people, transportation, fuel, and equipment. But it is warehouses that play a particularly important role in a company’s logistics footprint.
Logistics, simply put, is the management of materials and their distribution. Within the supply chain, logistics is the link between the suppliers and the customers.
Therefore, the logistics footprint accounts for all the activities that are required for the finished product to be ready and delivered to the customer. This can include the warehousing of raw material, work in progress, and finished goods inventory. Furthermore, it can include the geographical location of production and storage of goods.
The logistic footprint is thereby part of the supply chain ecosystem. Therefore, reducing the logistics footprint can be crucial for increasing a company’s competitiveness.
It has been long known that optimizing a company’s logistics footprint can give them a tactical competitive advantage. Businesses need to reassess and compose an efficient logistics plan that enhances customer service, reduces risks and costs, and eliminates unnecessary steps.
Therefore, for a business to remain competitive, a warehouse strategy must be developed that is just as ambitious as those of sales and marketing departments. But how do you develop such a strategy?
Reducing or optimizing your logistics footprint by means of an ambitious warehouse strategy includes, first of all, a concrete understanding of all measurable elements within the warehouse. These are elements such as inventory movements, support equipment, personnel, facilities, and transportation.
The first step in doing so is collecting data on the supply chain context. Which products sell the fastest? Where do problems occur? How long does it take to fulfill an order? How much lead time is acceptable for the market? What is the volatility of demand? What are the risks of holding inventories? This data then provides the basis for understanding what can be improved and what is already working well.
Optimizing the warehouse strategy in order to reduce the logistics footprint, then, can take a variety of shapes.
Lastly, it is important to know that warehouses – and logistics in general – operate in a dynamic environment. What’s right for today may not be right for tomorrow. Planning needs to be adaptive in nature and openness for change is necessary.
The size of a company’s logistics footprint can have a lot of influence on its success. Particularly if warehouse strategies are not optimized, time, effort, and money could be wasted if, for example, inventory is stored inefficiently. Therefore, a good warehouse strategy is essential in reducing your logistics footprint.
Do you want to know more about the logistics footprint in the supply chain? Experience it in one of our business games. Furthermore, on our website, you can read more about related topics. Have a look at pages such as supply chain risk management, LARG, data analytics, volatility, omnichannel, and trade-offs in end-to-end supply chain management.
Now you know the basic principles of logistics footprint. You discovered that logistics footprint refers to the amount of logistical support that the company requires, which includes transportation, fuel, people, and equipment. In other words, logistics include all activities that are related to moving the products, including warehousing. Logistic footprint plays a crucial role in the competitiveness of the company. Therefore, it is important to optimize the logistic footprint by developing an appropriate plan which would be in line with the dynamic and ever-changing environment. For example, in the case of warehousing, it is essential to have a good strategy in place since warehouses operate in a dynamic environment.
A high-performing value chain needs the collaboration of team members from across the organization. Tearing down silos and creating the right cross-functional mindset, however, can be a serious challenge. So, what do you need in order to achieve success? Ideally, you’d like your team to experiment with different scenarios wherein they learn to overcome various obstacles.
When setting up a supply chain strategy, important decisions lie ahead. Do you want to run an efficient supply chain organization? Or do you want to be able to respond quickly to market changes and grow your company? Are you dealing with ever more events, that may disrupt your supply chain? Is being sustainable, or becoming circular of strategic importance to you and your business?
Volatility has always played a crucial role in supply chains, hence in supply chain management. Maybe there is a sudden surge in demand for bottled water because a hurricane is approaching – or perhaps there is a sudden drop in demand for LCD screens because of newer technologies. Inchainge believes it is important that companies make conscious choices about how to deal with volatility and make that a part of how they manage their business.
An end-to-end supply chain can have several benefits such as reducing labor and material costs. But what other benefits does an end-to-end supply chain have? And what are the trade-offs in supply chain management? Read everything you need to know about end-to-end supply chain in this article.