THE VALUE OF LOGISTICS - Is logistics a cost centre or a competitive differentiator? Is it a core competency or a function that should be outsourced?

Many Chief Executive Officers have viewed logistics historically as a cost centre (trucks, warehouses, overheads, etc.), a separate business function that falls short of their ‘core competency’ definition. This perspective has led to the ongoing growth of the logistics outsourcing industry.

This does not necessarily mean that just because a business function is not considered a core competency, or is outsourced to a third party, that it’s not valued by the CEO.The true test of value is whether a CEO is willing to continue investing in logistics, either internally — in people, technology, assets, etc. — or by developing more strategic relationships with logistics service provider (LSP) partners. If neither type of investment is taking place, there is a problem.

If this is the case in your company, how do you explain the value of logistics to your CEO?

This is an extract from an in-depth article by Abrie de Swardt, Marketing Director of Imperial Logistics. The full article can be downloaded here.

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