Every business is always looking for the next competitive advantage; the new insight, process, or idea that can help move the company ahead of its competitors, delight its customers, and make more money.
In my role at UPS, I work with companies of all sizes across multiple industries, in locations around the world. Based on my observations, I believe the big competitive advantage, the powerful force that is reshaping the way the world does business, is logistics.
Today, whole economies, not just entire companies, depend on supply chains that are stretched across oceans and continents and on customers who live and work thousands of miles away.
It wasn't that long ago that only the largest and most complex organizations could leverage logistics as a competitive advantage. Only they could afford to build, staff, and maintain the resources necessary to make logistics work. But today, the power of logistics is available to virtually everyone. It's what we call the new logistics.
So what’s “new” about logistics that could give businesses a competitive advantage?
- Logistics levels the playing field: The power of logistics has become accessible to even the smallest business. Companies no longer need the capital to own warehouses, distribution centers, and transportation networks. They don’t need to employ highly trained experts to make logistics work for them. They can turn to third parties to provide some or all of these functions at reasonable costs.
- Logistics enables companies to easily expand their business: Not so long ago, if you wanted to break into a new market overseas, you faced a lot of challenges such as finding new distribution channels, overcoming cultural and business uncertainties, and navigating customs rules and regulations. Today, companies can entrust those concerns to third-party experts and discover vast new opportunities for growth beyond their domestic borders. In addition, both fixed and working capital positions can be improved, which allows for more investment to drive expansion.
- Logistics helps businesses stay focused on their bread and butter: Some companies have a hard time understanding how improving one piece of their business — the logistics leg — can end up reinventing the whole business, but it’s possible. The “new” logistics allows businesses to turn over non-core tasks, such as managing inventories, order fulfillment, and repairs, to others so they can concentrate on their core business.
- Logistics provides a competitive edge: Traditionally, how companies moved their goods from place to place really didn’t matter much to their customers so long as everything showed up on time and in one piece. But logistics turns supply chain management from a behind-the-scenes process to a competitive differentiator.
Transparent supply chains improve customer experience by reducing WISMO calls, and a reliable returns process can significantly improve the customer experience, driving repeat business. And those are just two examples.
It’s an exciting time to be managing supply chains. That’s why UPS is happy to participate in EBN’s new online community. And in the coming months, we hope that you will return to “Change in the Chain” for useful tips and new ways of thinking about your company’s supply chain and the role of logistics.
Charlie Covert is Vice President of Customer Solutions for the high-tech and industrial manufacturing sectors at UPS.