14.1 Introduction
Logistics, encompassing the art and science of moving products from their production sites to where they are required, has become a critical facet of contemporary business strategy. Once a peripheral function, logistics now commands the attention of top management, evolving into a strategic focal point that can confer significant competitive advantages.
This strategic shift is vividly illustrated by major corporations. Amazon, initially reliant on leasing aircraft for logistics, has now acquired over ten aircrafts, indicating a substantial investment in controlling its logistics chain. Walmart, a retail titan, showcases the significance of logistics through its leadership; two of its former CEOs, Lee Scott and Mike Duke, both emerged from the company’s Transportation and Logistics division, signaling the division’s integral role in corporate strategy. Similarly, Kraft Heinz’s investment of over $400 million in an advanced automated distribution center in DeKalb, Illinois, reflects a strategic move to enhance supply chain efficiencies and distribution capabilities.
These instances from Amazon, Walmart, and Kraft Heinz underscore a broader trend where logistics is no longer seen merely as a support function but as a crucial component of business strategy. These examples demonstrate how logistics capabilities can directly impact a company’s ability to serve its customers efficiently and effectively, thereby playing a pivotal role in the overall success of the business.
The Council of Supply Chain Management Professionals (CSCMP) defines logistics management as “that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements.” This definition highlights the two primary components of logistics: transportation and warehousing. In this chapter, we will delve into the transportation aspect, examining its critical role and best practices in logistics management. The subsequent chapter will focus on warehousing, exploring its significance and strategies within the broader context of logistics.
