Logistics strategies. Which one to choose
Imagine that you are going to build a house. You have a project, you have materials, you have money. But if the delivery of bricks, concrete and other materials is not organized, the construction will stop. The logistics business works the same way. It is not just "about warehouses and trucks." And if you make a mistake with the logistics strategy, there will be losses.
Let's figure out together with the specialists of Sargona Private Capital company what strategies there are and why it is important to choose the right one.
Let's figure out together with the specialists of Sargona Private Capital company what strategies there are and why it is important to choose the right one.
Centralized logistics
Here, all management comes from one logistics center. You can easily track flows and optimize costs. This strategy is especially good if you have a limited range of products and the logistics network is compact and clear.
But be careful: if customers are scattered across different regions, a centralized approach can work against you. Delivery times increase and competitors who are closer to the buyer will overtake you. Therefore, it is worth choosing this strategy if the key priority is control, not speed.
But be careful: if customers are scattered across different regions, a centralized approach can work against you. Delivery times increase and competitors who are closer to the buyer will overtake you. Therefore, it is worth choosing this strategy if the key priority is control, not speed.
Here warehouses and distribution centers are located closer to the points of consumption. The result is fast delivery, satisfied customers, flexibility during regional surges in demand.
But you will have to pay for speed: more personnel, higher management costs. Choose decentralization if you work with a wide geography or customer service is your main feature
But you will have to pay for speed: more personnel, higher management costs. Choose decentralization if you work with a wide geography or customer service is your main feature
Decentralized logistics
This strategy can save you a lot of money. Just-in-Time means that you don’t keep a lot of goods in stock. Everything arrives exactly when it needs to be shipped. The process can literally be described as follows: two trucks meet at a given point (one is your supplier, the other is the client), transfer the goods from one to the other, and you receive money as an intermediary. This minimizes warehouse costs, but requires ultra-precise coordination.
If your supplier is late, you can lose money. If you work in a predictable, stable niche where turnover speed is important, J-I-T can give you an advantage in the form of fine-tuning processes and optimal use of resources. The main thing is not to use the method blindly, advise managers of Sargona Private Capital Ltd.
If your supplier is late, you can lose money. If you work in a predictable, stable niche where turnover speed is important, J-I-T can give you an advantage in the form of fine-tuning processes and optimal use of resources. The main thing is not to use the method blindly, advise managers of Sargona Private Capital Ltd.
Just-in-Time
Logistics can be a headache. Especially if you want to focus on the product, marketing, sales. Then outsourcing comes to the rescue: you transfer logistics to a third party, and you do business yourself. Options - from partial transfer to full.
The risks are obvious - you lose direct control, noted Sargona. If the partner makes a mistake, you are still responsible. But if you find a reliable operator, this can become your competitive advantage. The main thing is to spell everything out in the contract.
The risks are obvious - you lose direct control, noted Sargona. If the partner makes a mistake, you are still responsible. But if you find a reliable operator, this can become your competitive advantage. The main thing is to spell everything out in the contract.
Flexibility is about the ability to combine strategies. For example, using J-I-T in stable areas, decentralization in hot spots and outsourcing for non-standard tasks. This approach requires constant analysis and the ability to quickly switch.
But it is flexible companies that most often win in conditions of crises, supply interruptions and sharp changes in demand. This is a strategy for those who do not want to put everything on one card.
But it is flexible companies that most often win in conditions of crises, supply interruptions and sharp changes in demand. This is a strategy for those who do not want to put everything on one card.
Outsourcing
Flexible logistics
How to choose
You can't just point your finger and say, "I choose this." The strategy must match the nature of your business, customer behavior, demand level, internal resources, and readiness for change.
If you have a narrow range and predictable demand, consider J-I-T. If you need control, centralize. If speed is important, decentralize. If you don't want to get into details, outsource. And if you want to be ready for anything, build a flexible system, as logisticians at Sargona Private Capital share their experience.
But remember: the wrong choice hits your pocket.
If you have a narrow range and predictable demand, consider J-I-T. If you need control, centralize. If speed is important, decentralize. If you don't want to get into details, outsource. And if you want to be ready for anything, build a flexible system, as logisticians at Sargona Private Capital share their experience.
But remember: the wrong choice hits your pocket.
Your wishes are our priority
© 2023 - 2025 All rights protected
