Question

Logistics is an increasingly important role in distributing products. What is “logistics” and why is it strategically important to a company and its international “go to market” planning?

Answer 1

Logistics in general means flow of things between point of origin and point of consumption. In business terms, it means organised movement of goods from place of supplier till the place of business, covering the places within different departments of the business and finally reaching the place of customers/wholesales/retailers.

Logistics are defined as "the process of planning, implementing and controlling the efficient and effective flow and storage of goods, services and information from point of origin to point of customer for the purpose of conforming to customer requirements".

Logistics are important to a company strategically because it is an essential part of supply chain. Logistics give value to supply chain management which inturn gives value to business in total. The supply chain management will fall apart without logistics. Logistics when correctly managed will lead to less wastage of materials (improves quality), less time taken to supply with less cost (increasing profit). So managing logistics is strategically important for any business.

Go-to-market strategy is a plan of an organisation utilising their inside and outside resources to deliver their unique value proposition to customers and acheive competitive advantage. If a company wants to have Go-to-market stratey it must have a well organised logistics (either managing by its own or outsourced to a well renowned logistics company). This type of logistics will bring competitive advantage to the business with high quality, less cost, and more importantly availability of the products at all time to the customers. If a company wants to grow in size and also wants to increase its reach in geographic locations, it is not possible without the logistics availablity.

All the Globally sold products in today's world are not manufactured where they are sold, some of them are produced in one country with raw materials brought from other country and sold in another country. This is entirely possible with availablity of logistics.

Logistics help business create value by providing value to customers thus enhancing the overall customer experience taking into account product quality and price. (Which are ensured by better logistics with less damage and less cost incurrence)