The distribution strategy of a logistics company no longer has only operating fundamentals, and has become increasingly more importance and independence as a sustainable business advantage in the long run.
With the rapid adoption of mobile technology and smartphones in Latin America, where it is expected that by 2020 reach the 605 million units , companies and distribution centers have had to adapt to unexpected changes in the form and expectations of consumer purchasing changes.
Changes in management and logistics network distribution, with income of technology as a basic element of the buying process, has created new challenges and opportunities for companies seeking to position themselves as leaders in markets such as retail, e-commerce, consumer mass goods, etc.
Importantly , logistics is a strategic tool to enhance competitiveness and, consequently, the production system of a country. Therefore, it is essential that the private sector and each state can understand these changes and act according to the current needs of the logistics market. “Key points A Good Strategy Distribution Logistics”
New Paradigms Logistics and Transport
Let ‘s start by defining what the logistics activity according to RLEC ;
“The process of planning, implementing and efficiently control the flow of raw materials, work in progress, finished goods and related information with them, from the point of origin to point of consumption in order to meet customer requirements.
Even today the distribution strategy and main logistics activities consisted of the selection of points of sale, supply logistics distribution network and distribution center management, ie, gave answers to two major operational questions:
- – Where We sell our products?
- – How We transport our products?
With changes in buying behavior, companies or logistics providers have begun to emphasize answer the second question; How We transport our products? – This change is largely due to a need to make logistics distribution strategy an efficient and economic process. This as the competitive advantages of companies no longer go through the sales channels, because the ability to innovate in this area is very difficult, but are based on the ability to generate new ways to distribute products.
Logistics and supply chain are cross-cutting activities in the operation of a business, and because of its complexity, developing strategies warehouse management, distribution network and optimization of deliveries in the last mile is essential to ensure efficiency operational.
What are the keys to a good strategy logistics distribution?
Before designing a plan that covers the entire operation of the company, you need to be clear about who the actors involved in this process. Usually the supply chain of a company is composed of:
- – Suppliers / Production Center
- – Distributors or 3PL
- – Points of sale
The company strategy should consider each part of the flow of the supply chain, and so in this way to support the joint effort of all members towards improving the quality of service and ensure the success of operations.
Besides taking into account those who are responsible for each part of the logistics process, it is also important to understand what factors consumers today are demanding as part of service delivery are, for example:
– Type / Flexible Delivery
– Shipping Cost
– Wait Times
Given these factors, we can create an appropriate response to the current needs of our customers based on the actual capacity of our partners to meet those expectations strategy. This process of prior planning can help logistics managers can reduce costs, optimize the management of the operation and increase levels of customer satisfaction.
The Amazon case: Revolutionizing distribution networks
From the beginning, the company founded by Jeff Bezos has aimed to reinvent the formulas set regarding logistics and supply chain. Innovating in the way they are sent and distributed hundreds of thousands of products that are purchased through the platform every day.
Amazon’s strategy sought to respond not only to the points previously named, but the most important issues in e-commerce:
- – Power Test / View products before buying
- – Warehouse Management and Distribution Globally
- – Transaction Security
The problem arises when the expectations and demands of customers of Amazon begin to change, where speed and reliability in the distribution of supplies is a priority, with greater complexity as the company continues to grow.
Jeff Bezos as he notes, “Our vision is to not sell everything, but to build a place where people can find anything you want to buy online, and we can not do it alone, we will partner with hundreds of companies.”
That’s where a new target in the company arises, take control of their supply chain to final customers, mainly due to the poor quality and safety than current market regarding delivered him.
One of the major problems facing the company was the distribution capacity that delivered the available suppliers. A huge number of shipments were in the cellar, and quality of service to the end customer did not meet the required standard Amazon. Given that Amazon has proposed building a fleet of international transport by air, sea and land. This would significantly reduce long-term costs, increase the flexibility of its delivery capacity and could increase the level of customer satisfaction.
With a fleet of own distribution Amazon seeks to achieve 3 key points that mark the future of logistics delivery:
- 1. Automation and prediction volumes / products most sold country.
- 2. Innovation in transportation, eg; drone deliveries.
- 3. Provide your delivery service to retailers and thereby generate a new business model.
- 4. trucks, airplanes and ships with Amazon branding, ie the brand will be present in major transport routes.
Logistics technology as ally
“Get a strategic advantage from the relationship with loyal customers requires a real difference in the experience you offer. In many cases this includes not only have great products at competitive prices but also depends on the quality of your deliveries, personalized service and a level of responses and high collaboration “ – Bain & Company Brief
The logistics companies should be able to achieve visibility across the supply chain to really understand what are the fundamental strategy to cover distribution points.
Communication and collaboration between the parties in the supply chain are essential to achieving the necessary transparency. This is only possible with the integration of web / mobile tools that deliver monitoring capabilities and control over the entire flow of products from the warehouse management, delivery status and end customer perception regarding service delivery.
The important thing is to understand that are 4 key points that an analysis tool logistics management must be able to deliver when making your logistical planning. Elaborates on these points here
- 1. Transparency of operations
- 2. Direct communication with the transport fleet and end customers
- 3. reports and information in real time regarding the operational performance
- 4. Ability to measure and analyze levels of customer satisfaction
As technology continues acquiring a greater role in the daily lives of consumers and businesses, it is necessary to consider the importance when developing strategies of companies.
It is vital that logistics managers realize the importance of integrating these concepts in developing their distribution strategies, since they are not only vital to stay competitive levels, but are a way to find points where you can gain advantages trade and higher levels of customer satisfaction.