TECNlOGO EN GESTIN LOGSTICA

LOGISTICS STRATEGY
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Developing Missions and Strategies

Dear apprentice, you have read about logistic strategies in

Spanish. Now, read about this topic in English to reinforce your
knowledge. Then, answer the questionnaire about the reading.

Important!
You need the topics of this reading for the de-
velopment of English Activity No. 1, which is
about the blog you have to realize in this guide.

Each company has purposes or reasons This is an example of a Companys Mission

for its existence. The mission permits
Sample Company Mission
to know the purposes of the company To manufacture and service an innovative, growing, and profitable worldwide microwave
and its direction. It creates the strate- communications business that exceeds our customers expectations.
Sample Operations Management Mission
gies to get to the end of its mission. To produce consistent with the companys mission as the world-wide low-cost manufacturer.
Sample Operations Management Department Missions
Product design To design and produce products and services with excellent quality and
Mission inherent customer value.
Quality To attain the exceptional value that is consistent with our company mission
management and marketing objectives by close attention to design, procurement,
According to Heizer and Render (2009), production, and field service opportunities.
Process design To determine and design or produce the production process and equipment
economic success is the result of iden- to become compatible with low-cost product, high quality, and a good
tifying missions to satisfy a customers quality of work life at economical cost.
Location To locate, design, and build efficient and economical facilities to give high
needs and wants. Mission statements value to the company, its employees, and the community.
provide horizons and focus on con- Layout design To achieve, through skill, imagination, and resourcefulness in layout and
work methods, production effectiveness and efficiency to have a good
cepts to follow in the company proces- quality or work life.
ses. To establish a company, strategy is Human resources To provide a good quality of work life, with well-designed, safe, rewarding
jobs, stable employment, and equitable pay, in exchange for excellent
required to have a well- defined mis- individual contribution from employees at all levels.
Supply-chain To collaborate with suppliers to develop innovative products from stable,
sion. If a company establishes the com- management effective, and efficient sources of supply.
pany rationales, the functional areas can Inventory To achieve low investment in inventory consistent with high customer
service levels and high facility utilization.
support the company. Functional areas Scheduling To achieve high levels of throughput and timely customer delivery through
are Marketing, Finance/accounting, and effective scheduling.
Maintenance To achieve high utilization of facilities and equipment by effective
production/operations. There are also preventive maintenance and prompt repair of facilities and equipment.
missions for each function to support
Table 1. Sample of a Company Missions by Heizer and Render pp. 32.
the firms overall mission.
(refer to Table 1).
 TECNlOGO EN GESTIN LOGSTICA
LOGISTICS STRATEGY
Servicio Nacional de Aprendizaje - SENA. Reservados todos los derechos 2012.

Martin Murray (s/f) tablish an information system, introduce new policies

says that each com- and procedures to develop a management plan into the
pany creates a logistics company.
strategy to define the
service levels accor- Elements to examine when developing a
ding to logistics orga- Logistics Strategy
nization and effective
costs. Strategy is an As reported by Murray, when a company constructs
organizations action a logistics strategy, it also needs to define the service
plan to achieve the levels to evaluate in order to check its effectiveness in
mission because supply chains constantly change and cost benefits and the ways to achieve the results. The
evolve to develop a variety of logistics strategies for author presents an example of some component areas
specific product lines, specific countries or specific for each company to include in the evaluation:
customers. (refer to Table 1).
Transportation Do the current transportation strategies help
According to the author, the implementation of a Lo- service levels?
gistics Strategy in a company permits to identify the Outsourcing Do outsourcings help in the logistics function?
impact of imminent changes in the supply chain and Does a partnership improve company services?
make organizational or functional changes to ensure Logistics Do the current logistics systems provide the
service levels in the corporation.These strategies ex- Systems level of data that is required to successfully
implement a logistics strategy? or
ploit opportunities and strengths, neutralize threats, Does the company require a new system?
and avoid weaknesses. Competitors Do competitors offer more benefits than the
company?
Does the companys customer service improve
Murray expresses that a company can start to de- service levels?
velop a logistics strategy by looking at four distinct Information Is the information that drives the logistics
levels of their logistics organization. organization real-time and accurate?
Does the company make decisions with the
information?
Strategic: the company needs to check its objecti- Strategy Are the objectives of the logistics organization
ves and strategic supply chain decisions to see its review in line with company objectives and strategies?
procedures and how they contribute to develop the
Table 2. Areas for evaluation
companys targets.
Global Operations Strategies
Structural: the logistics strategy needs to examine the
logistics company organization such as the optimum Heizer and Render (2009) also talk about logistics stra-
number of warehouses and distribution centers or tegies at global level. Nowadays each company creates
products to be produced at a specific manufacturing operations strategies to work at national and interna-
plant. tional levels. An international business is any firm that
engages in international trade or investment. It has an
Functional: the company checks separate functions in international dimension and international business or a
the logistics organization to achieve functional exce- multinational corporation. A multinational corporation
llence in the whole organization. (MNC) is a firm with extensive international business
involvement. It buys resources, create goods or servi-
Implementation: each logistics strategy requires to ces, and sell goods or services in a variety of countries;
be implemented across the organization. It is neces- one of this type of company is IBM. It is a multinational
sary to create a plan to implement, develop and es- corporation.
 TECNlOGO EN GESTIN LOGSTICA
LOGISTICS STRATEGY
Servicio Nacional de Aprendizaje - SENA. Reservados todos los derechos 2012.

As reported by the authors, operation managers of Multidomestic Strategy

international and multinational companies focus on The multidomestic strategy has decentralized autho-
global opportunities with four international opera- rity with significant autonomy at each business. Orga-
tion strategies: international, multidomestic, global and nizationally, these are subsidiaries, franchises, or joint
transnational. ventures with substantial independence. The advantage
of this strategy is maximizing a competitive response
In the following Matrix, (refer to Diagram 1) the authors for the local market; however, the strategy has little or
show this strategies in consonance with the relation no cost advantage.
between cost reduction (vertical) and local responsi-
veness (horizontal). Global Strategy
A global strategy has a high degree of centralization,
with headquarters coordinating the organization to
search standardization and learning between plants and
generating economies of scale. This strategy is correct
when the strategic focus is cost reduction but its local
responsiveness is high.

Transnational Strategy
A transnational strategy exploits the economies of sca-
le and learning. However, they are under nation pressu-
re for responsiveness and responsibility in each part of
the organization. Transnational describes a condition in
which material, people and ideas cross or transgress-
national boundaries. These firms have the potential to
pursue all three operations strategies (i.e., differentia-
tion, low cost, and response).

References
Heizer, J., & Render, B. (2009). Operations strategy in a global environment.
In Pearson Prentice Hall, Operations Management (pp. 25-49). New Jersey: Pear-
son Education, Inc.

Figure 1. Matrix of Global Operations Strategies in consonance with cost Murray, M. (n.d.). Creating a logistics strategy. Retrieved on May 7, 2012 from
reduction and social responsivenes http://logistics.about.com/od/supplychainintroduction/a/strategy.htm

Table 1. Heizer, J., and Render, B. (2009).

International Strategy Operation Strategy in a Global Environment. P. 32.
An international strategy uses exports and licenses to
Table 2. Heizer, J., and Render, B. (2009).
penetrate in the global world. It doesnt take advantage Operation Strategy in a Global Environment. P. 38.
from the local markets and has little local responsive-
Diagram 1. Heizer, J., and Render, B. (2009).
ness and little cost advantage. It has little responsive-
Operation strategy in a global environment. P. 40.
ness because companies export or license goods from
the home country. Cost advantages are few because
companies use production process at some distance Dear apprentices:
from the new market. However, an international stra-
After studing this document, we invite
tegy is easy because exports can require little change in you to answer the questionnaire of
existing operations, and licensing agreements. evidence section.