Logistics is a term that increasingly encompasses a wide range of tasks and subject areas. More than ever, investments in the supply chain of an organization touch nearly every department in that organization. When we started in 1978, most of our interactions with shippers occurred in the warehouse, where products flow in from vendors and out to customers, or in the accounting department, where the freight bills get paid. In 2018, there is hardly a department that our technology, service offerings, or expertise doesn’t touch.
Look at the 5 key departments logistics impacts now:
Sales / Customer Service
By lowering shipping costs, some clients find that they are able to open up markets that were previously unattainable to them. This gives them an opportunity to grow sales and expand their customer base. In addition, the technology – from tracking to route optimization to data transparency – allows shippers to fulfill orders faster and more efficiently. This improves customer service and speeds up response time when problems do occur. Customers now expect to be able to track orders with the click of a button, any time. Managing that expectation, as well as other emerging innovations, is vital to meeting the customer service demands of today.
Finance / Accounting
Whether it is auditing freight bills and discovering billing errors, involving accounting in supply chain is important – but it doesn’t stop there. Budgeting, negotiating contracts with carriers, and managing parcel shipping to include service failure refunds all typically involve accounting and finance personnel. In addition, many companies struggle allocating freight and transportation costs accurately to the right locations, department, or general ledger code. More often than not, the CFO or Controller is one of the most important people in the organization when it comes to supply chain and logistics costs because of the impact they have on the company’s bottom line.
Technology / Data
Formerly the exclusive domain of the IT department, harnessing technology and data is now a part of the job in an organization. Logistics is no exception. By tracking raw materials and incoming products, as well as outgoing shipments and sales, inventory management is a key driver of profitability and expense control. Giving decision-makers and managers the ability to see the data they need to make good decisions is vital now. Engaging your team members whose responsibility includes data management is absolutely critical in this day and age.
Purchasing / Manufacturing
If an organization is involved in the manufacturing of products of any kind, logistics and transportation are absolutely critical. The lifeblood of the organization is the raw materials and components that are planned, purchased, scheduled, and delivered to the facility in which they are made. This requires management of inbound freight and extensive planning. It involves the building of trusted relationships with key carriers who understand your needs and requirements regarding packaging, lead times, and delivery schedules. Additionally, ensuring your vendors are complying with your logistics and transportation policies and purchasing terms gives your company better leverage with carriers and helps drive efficiency.
Transportation / Logistics
This department is the most obvious in this context, but understanding that the role of a Manager in this department in an organization is evolving and changing at a supersonic pace is important. The fact that logistics now impacts so many departments in an organization illustrates how important it is to get the right person overseeing this process. This leader must possess knowledge to understand the key profit and success drivers in the other four departments above and build relationships to knock down silos that may have formed. Supply Chain and Logistics Managers today have to embrace rapid change and be at the strategy table with other executives and decision-makers in the organization to ensure that the company can deliver on its promise to both internal and external customers.
The rate of change sped by technology advancing exponentially is driving every company to look at new ways to manage their business. Opening new markets, increasing market share, controlling costs, building strategic partnerships, and identifying the key drivers in your business are not just ways to get ahead in 2018 – they are necessary for survival.