Wednesday, 15 May 2013

How to Make a Strategic Logistics Decision

Strategic decisions help Logistics Manager to manage uncertainty, customer service and cost. These decisions include product functions, operational & demand related on variables such as delivery time, inventory turnover, obsolescence and coefficient of variation of sales.

Logistics Managers needs to decentralize inventory if the customers require a short delivery time to the customer’s facility nearby.

·    Make to Order vs.  Make to Stock
There are six variables to consider with make to order verses make to stock ; they are:
1) Obsolesce,
2) Lifetime of the product,
3) Process technology,
4) Lead time,
5) Delivery time and
6) Sales variation.

·    Push vs. Pull Inventory
Push processes moves the products based upon planning and forecasting whereas pull decisions is when the products are moved on demand.

·    Centralise vs. Decentralise Inventory
Costs, inventory turnover and delivery time, are variables that affects the way on how inventory are stored. If the costs are lower in density, there are needs to ensure the transportation costs are low to remain competitive.

Royale International is able to help you manage the logistics decision making process within your company. With numerous services available you can rely on them to ensure your strategies are perfectly managed and maintained to a high standard.

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