Logistics Management: Cornerstone to Sustainable Competitive Advantage

By Parker, David W. | Management Services, January 1994 | Go to article overview

Logistics Management: Cornerstone to Sustainable Competitive Advantage


Parker, David W., Management Services


A major difference between those clothing companies in decline and those with growth, is the latter's excellent total integrated logistics strategy. The global industry in which we operate, demands logistics management to plan and execute, customer-led, profit-driven tactics; where an array of alternative production and procurement methods are deployed simultaneously. The supply chain must be regarded as a single process -- not as discrete elements controlled by functional management. Logistics entails the planning and control of all factors that will have an impact upon getting the correct product to where it is wanted, on time and at the optimum cost.

The supply chain, comprises many different functional activities: stock control, procurement, transport, manufacturing, etc. The danger, however, for many organisations is to address each function as a unique operation, rather than take a total system approach. This will often require discrete trade-offs to be accepted in individual functions as a penalty for overall system improvement. Consequently, to ensure that the logistics strategy is focused within the business mission, it is imperative that synergy of key areas is maintained. For each strategy, customer-driven performance drivers must be directing management. Closer examination of each strategy will identify what key questions must be asked to improve customer service. Such examination will require external analysis--the market dynamics -- as well as internal analysis -- company performance measures. Innovation in logistics begins with systematic analysis of opportunities aimed at reducing the supply chain and/or improving customer service. The coming together of suppliers and customers is now in 'electronic marketplaces'. This has the dual-advantage of vertically integrating the supply chain more than ever before. For logistics, information technology has moved the range of players and sectors closer to the ideal marketplace where management data is transparent and freely available.

THE DYNAMICS OF THE UK CLOTHING SECTOR

The step-change needed by clothing companies to respond to today's market requirements is often too complex or daunting for them to instigate. In preference, they continue to operate within outmoded strategies and with unrealistic horizons. Many were competitive in the 1960's and 70's, where high-volume production methods supplied a buoyant market. Today, however, short and varied orders mean that there is incompatibility with management styles and organisational structures and cultures, manufacturing capability, marketing strategy and financial frameworks. For those who have adopted appropriate and innovative tactics, however, their initial survival has now developed into longer term growth.

The Future of the Clothing Industry in Britain and of the British Clothing Industry was the title of a briefing paper recently written by the Logistics & Global Marketing Group of the Department of Clothing Design & Technology, Manchester Metropolitan University.(2) That paper was prepared at the request of Sir Nicholas Winterton MP; for his use at a select committee. The title of that paper had been carefully chosen. For, to undertake any appraisal of the future of our clothing industry it is vital to distinguish between that industry based in Britain and that operating from Britain. It is therefore quite possible for the British clothing industry to be very successful while the clothing industry in Britain, in terms of employment within the UK, declines.

It is all too easy to slip into the unquestioned habit of assuming that if overseas based companies are more successful than those based in the UK it must be because they have access to low wages. However, as highlighted by a report by Walter Eltis (NEDO) in the Sunday Times, 21 June 1992, which discussed the colour TV industry, investigation showed that the success of Japanese companies based in the UK was not due to low wages, but to better design, better manufacturing systems, and above all, responsive logistics and better relations with suppliers. …

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Logistics Management: Cornerstone to Sustainable Competitive Advantage
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