Logistics plays a crucial strategic role in business success, particularly concerning location, inventory management, and transportation for retailers, wholesalers, and manufacturers. Recent changes in the business environment necessitate a closer alignment between logistics functions and overall business strategies, considering factors like regulation and technology. To effectively leverage logistics as a competitive advantage, companies must adapt their logistics programs to current corporate strategies and integrate logistics into their long-term business operations.

1. LOGISTICS—ESSENTIAL TO STRATEGY
o Logistical considerations have always
played a strategic role in business. Among
retailers and wholesalers, they transcend
inventory management and transportation to
include one of the most critical factors in
business success-location in relation to
markets or sources of supply.
oLogistics can spell the difference between
success and failure in business.
oLogistics-oriented strategies are also
important in large companies.

2.  Logistical considerations have always played a
strategic role in business. Among retailers and
wholesalers, they transcend inventory management
and transportation to include one of the most critical
factors in business success—location in relation to
markets or sources of supply.
 Among manufacturers, logistics concerns itself with
matters as basic as plant location, sourcing of raw
materials, and standards of customer service.

3.  In recent years, changes in the business environment have forced
companies both large and small to pay particularly close attention
to how this function relates to others. Government regulation, the
health of the nation’s transportation system, energy restrictions,
and technological developments all represent important
considerations in the formulation of a business strategy.
 Example :
1) low-cost way to distribute a high volume of milk and other
products. Building a retail “store” How ?
2) One of the world’s largest chemical manufacturers recently had
to replace its ships. How ? SHIPs-BARGS-Rail-Cars to delivery
terminal-packed in container fir final delivery by Rail and truck;
Modified converting its entire distribution system to one using
containers and by river barge, rail, and truck. Repacking at inland
terminal eliminated, material handling costs , because of the
increased frequency of departures of ocean-going container
barges from plants, orders will be delivered to customers with
little or no increase in order response time and only a small
increase in total inventory in the system.

5. Factoring Logistics Into Strategy
 To employ logistics as an effective competitive lever
and as a significant component of strategy,
management must take two actions. First, it must adapt
logistics programs to support ongoing corporate
strategies in the short term. Second, it must factor
logistics into the design of business operating
strategies on a continuing long-term basis. Steps
necessary to ensure this include the performance of a
logistics strategy audit, possible logistics system
redesign, and the maintenance of procedures to ensure
continued attention to logistics as an integral element of
corporate strategy.