This document discusses the role of logistics in achieving competitive advantage. It begins by defining logistics as the planning, implementing, and controlling of supply chain activities. It then explains Porter's generic strategies of competitive advantage - low cost (productivity advantage) and differentiation (value advantage). Finally, it outlines how logistics strategies can help companies gain competitive advantage by lowering costs through scale efficiencies (cost leadership), offering superior service quality (differentiation), or providing additional value-added services (value addition).

1. Role of Logistics in Competitive
Advantage for a Company

2. Agenda
1. What is Logistics?
2. What is Competitive
Advantage? - Porter’s
Generic Strategies
3. Logistics Strategies
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3. What is Logistics?
OLD SCHOOL MEANING
1. Origin from Greek and Latin (the science
of computing and calculating)
2. This word was primarily used in army
references (move supplies and
armaments)
3. First used by the French Army (17th
century)
4. Gained prominence during WW-2
PRESENT USAGE
1. Today, used in business with a wider
meaning
2. Philip Kotler added three words to fine
tune the meaning (Planning,
Implementing and Controlling)
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4. What is Competitive Advantage? -
Porter’s Generic Strategies
• The differentiating line that
makes a customer choose
your business over another
one.
• E.g.
The team
Brand and reputation
Unique product no-one else
can offer
Ability to produce and sell @
low cost
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• In short, successful
companies either
have a Productivity
Advantage (or)
Value Advantage
(or) a combination
of both.

5. Productive Advantage and Value
Advantage
PRODUCTIVE ADVANTAGE
• High volume sales @ low cost due to
“economies of scale”
• Includes all costs except cost other than
BOUGHT IN SUPPLIES/GOODS
VALUE ADVANTAGE
• A product is not purchased for itself, but
for what it delivers
• Intangible in nature
• Not only for the product, but also for the
service rendered
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6. Generic Strategies in Logistics
COST LEADERSHIP
The basic approach to this strategy
domination is through logistics cost
reduction such as:
• Reduction in inventory cost
• Freight mode and route selection
• Scale economics in warehouse
operations
• Reduction transaction cost &
errors (through IT Support)
• Outsourcing
DIFFERENTIATION
Differentiation through superior
service quality that is beyond the
reach of competitors, such as:
• Committed/guaranteed delivery
time
• Customized logistics solution
• Consignment tracking
• Penalty for defaults
VALUE-ADDITION
3PL suppliers are providing some extra
services to clients in addition to the
usual logistics services so as to add
value to their service offerings such as:
• Cobbling
• Payment Collection
• Customs Clearance
• Packaging and Labelling
• Vendor-managed inventory
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COBBLING of Backhaul Arrangements

10. Thank you
By
Harikrishnan. M
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