Technological advances are bringing about huge growth in the global marketplace, and expanding into new territories has become essential in order to survive in many business sectors. But while going global can help grow your business, with it comes an increased need to manage your logistics processes on a global level. Effective global logistics management can help companies to improve their customer satisfaction, streamline their costs and embrace new opportunities in a timely and efficient manner.
A growing global industry
The logistics industry is worth some $400 billion globally and spans all aspects of the supply chain process, from air, road, rail and sea transportation through to manufacturing, warehousing, inventory management and fulfilment. Bringing together all the strands of your supply chain into a cohesive and efficient system, is the greatest challenge faced by any organisation operating on a global level.
Companies need to build their competencies and infrastructure effectively in order to manage their global distribution strategies, and for many it is still early days. Most will come across numerous unforeseen challenges on the way to learning how to manage the smooth and cost-effective movement of products from one worldwide destination to another. Even those who started early and are well on their way are finding that rapidly changing economic factors produce new challenges all the time, each impacting in a different way and to a different degree on their global operational activities. Trade management is no longer the sole responsibility of an operational manager, it is a board-level issue that is at the very heart of the business.
The keys to competitive advantage
Operating on a global level adds costs, complexities and risk to your supply chain. Quite simply, your products have further to go and it takes longer to get them there. So what steps can you take to ensure you are best placed to leverage your global presence to increase your competitive advantage?
•Improve your total cost data analysis processes to ensure optimal sourcing results
•Watch out for overhead costs, which rise with global sourcing and logistics
•Focus on inventory management as a longer supply chain can mean lost sales if there are issues in supply and demand
•Find ways to reduce freight costs, especially for expedited freight which is subject to high shipping costs
•Adopt a proactive logistics management approach
•Integrate domestic and international logistics operations
•Try to automate processes as far as possible in order to remain streamlined and keep costs to a minimum.
Adopting a total cost approach to your supply chain management enables you to better predict the overall cost of delivery of your product from its source to its final destination. By integrating your international as well as your domestic logistics you will be best placed to plan your finances and operations, resulting in increased competitive advantage. Advanced technological tools are available to make this process quicker and easier than ever before and provide a range of additional features to add further value to your business.
The power of integration
One of the biggest challenges of companies operating on a global level is achieving effective integration with overseas suppliers. Investing in visibility systems can have a huge impact on the success of your global operation. A visibility system provides a snapshot overview of where a product is, when it will arrive and whether the expected date of arrival differs from the original planned date. In a domestic setting technology-based end-to-end visibility is a tool that enhances the performance of your business. In a global setting it is essential. At their most basic level, visibility tools are carefully programmed with all the activities required in order to achieve an objective (i.e. the physical movement of a product from A to B) and are configured to send an alert as soon as a particular step is missed. This enhances communications at a number of levels between the different parties involved in a particular activity.
Operating on a global level involves taking a new approach to logistics management and adopting different strategies to help you along your way. Be prepared to adopt a global view and a cohesive approach to your international supply chain management. You will then be best placed to increase your competitive advantage in an increasingly competitive marketplace.
Alastair Kane is a freelance writer who has supplied this article for 2Touch , a leading provider of ecommerce fulfilment services.