Effective management of logistics can increase a company’s economic value with a strong impact on revenues and costs, according to a study conducted by SDA Bocconi School of Management in Italy on behalf of Ceva Logistics.
The survey comprised detailed analysis of market and balance sheet figures and interviews with logistics managers of 30 multinational companies, based in Italy, operating in the consumer electronics, IT and telecommunications sectors.
The current economic environment is typified by strong volatility, high inflation risk and increasing raw material costs. These factors impact directly on the business strategies of companies operating in this highly competitive sector, meaning that efficient logistics becomes an essential part of ensuring their competitiveness through:
* Effective coordination throughout the supply chain: communication between procurement and sales departments is critical to pass on all increases in purchase and production costs
* Reduction of stock levels to gain more efficiency
* Guarantee of quality, quick and tailor-made services to achieve competitive advantage over competitors.
It identified three main areas of change to optimise total logistics spend:
* Transport reengineering. For global companies with production plants all over the world, transport often represents one of the main cost items of their supply chain. Some companies have increased ocean transports while reducing air shipments with the purpose of reducing cost and CO2 emissions
* Consolidation/reduction of warehouses across Europe. This allows companies to exploit the increasing homogenisation of product configuration across different markets
* Minimisation of held inventory in warehouses and final product stock in their customers’ and retailers’ warehouses.
Carlo Rosa, managing director of Ceva Logistics, Italy, said: “This survey has proven that state-of-the-art logistics management can bring companies in the consumer electronics sector.”