Establishing Policies for Structuring Logistics

 

Hello, I’m Ichiki of Sync Logistics.

In this issue, I’d like to share my thoughts on the importance of establishing policies and standards in logistics.

 

The origin of the word “logistics”

The word “logistics” originated from the French military term “logistique” which refers to back-end support activities for the front line. It is responsible for providing food and supplies, securing supply routes, and maintaining facilities.

Military logistics is based on strategy and tactics, and it plans how to provide resources such as personnel and supplies to the front line. The kind of logistics planning required changes depending on the weather, the infrastructure, and combat conditions on the battlefield. For example, supplying cold-weather gear and heating equipment is indispensable in cold places, and if certain transport routes are cut off, alternative routes must be chosen and plans must be redone.

As in military logistics, flexibility based on the situation is also required in business logistics.

 

■Trade-offs in cost, speed, and quality

We logistics providers create services tailored to shippers’ strategies and needs.

In terms of logistics, a customer’s needs and assessment axes are broadly divided into three categories, namely, “cost,” “speed,” and “quality.” While we aim to provide services that satisfy all three factors at a high level, the reality is it is difficult to achieve “economical, fast, and high-quality” perfectly due to trade-offs among the three.

For example, if you want to improve logistics speed, you need an environment where shipping can happen anytime. This requires extra land and personnel which unavoidably raises costs.

If you want to keep transport costs as low as possible, speed may not be guaranteed because shipments are subject to the availability of ship space, much like the availability of plane tickets on airline reservation websites.

Regarding quality, for example, if you want to improve both shipping speed and quality, you need to hire and train appropriate personnel, which in turn increases costs. If you aim to improve quality without increasing personnel, speed is the trade-off.

In logistics, actual constraints such as ship personnel, storage space, and ship space exist, therefore logistics are structured in such a way that if any of the three factors is improved, the others deteriorate.

 

Establish policies and standards on how business will proceed

In order to build highly competitive logistics over the medium to long term, it is important to clearly indicate policies and standards which are the premise of such logistics. Among cost, speed, and quality, which factor is to be prioritized? What is the minimum that must be achieved or cleared?

In building logistics, what needs to be focused on also becomes clear once policies are clear, therefore we are able to offer the most effective proposals. Enhancing the accuracy of our proposals, which support our clients’ businesses equates to the steady building of highly competitive logistics, which in turn benefits the whole industry.

Conversely, attempting to satisfy all three factors while ignoring the correlations among the three will result in quality deterioration, accidents, and in the worst-case scenario, the discontinuation of services. 

In military studies, there is an adage that says, “In war, amateurs talk strategy and professionals talk logistics.” Military logistics is considered an important factor that determines victory or defeat. I believe the role logistics plays is very important even in the used car export business.

We will continue to offer proposals and support with real value to help shippers’ businesses succeed. 

Thank you for reading through to the end.