Formulating logistics strategy

Commercial and industrial organizations can be thought of as systems which are composed of operational processes structured and regulated by a set of functions that can become strategic; they are currently the object of intense environmental pressures. Never have these forces been so diverse: they are disrupting previous equilibriums and call for rapid and coherent responses. The multiplicity of corporate responses implies coordination and integration in an approach with a clearly defined strategic character. Strategy enable companies to formulate and achieve their objectives, allowing them to seize and take advantage of opportunities as they arise, at the same time, remaining in tune with their environment. It appears that one of the priorities that is considered essential today by numerous firms is an understanding of logistics. Logistics, defined as the technology of control of the physical flow of materials and goods and related information that a firm sends, transfers and receives, appears as an organizational approach that can conserve and improve the flexibility and reactivity of the firm vis-à-vis its environment. Logistics has now become a very far-reaching "total" approach, which is both transversal and very ambitious. Its main role is to synchronize overall physical flow, and it is indeed in permanent interaction with all of the classic functions of a firm, constituting an active interface between the firm and its environment. The profound transformations that have taken place in the structure of firms, as well as the extension of their activities, have confirmed the need for a strategic approach to logistics. It aim is to control the areas where the firm operates, the timing of these operations and finally, the inherent risks involved in the firm's choices. How can one identify the strategic projects in which logistics could play a key role? The chapter answers this question and proposes an innovative approach to strategy formulation. It begins with a conceptual approach to formulating logistics strategy exploring an interactive strategy/logistics loop. Then it suggests a typology of possible generic logistics strategies illustrated by many examples. It ends showing that these generic logistics strategies are not independent ones but are generally (and can fruitfully be) combined, three potential "strategic action itineraries in logistics" are depicted.