1.

3 Developing the logistics

organisation
• The most cost effective.
• Supply chain keep changing and evolving,
develop strategies for specific product lines.
• To have an effective logistics organization.
• To deliver what customers want and when
they want by spending as little money as
possible.
• Work with logistics partners throughout
supply chain.
 Restructing of conventional
• Vertical organisation
• Horizontal organization
 Organised
around
processes

Guided by Focus
performance Flat and
metrics on de-layered
(market based)
process
Built upon
multi
functional
teams
 Innovation

Central of business
Consumer
development
Customer
management
Supplier
development
Supply chain
management
1.4 logistics as the vehicle for change
 1.4 Logistics as the vehicle for change

• Technologies and competitive forces change at ever

increasing rates the imperative for organizational
change becomes more pressing.

• To compete and survive in these global markets

requires a logistics-oriented organization

• There has to be nothing less than a shift from a

functional focus to a process focus.
 1.4 Logistics as the vehicle for change (cont.)

• Such a radical change entails a re-grouping within the

organization so that the key tasks become the
management of cross-functional work flows.

• Example
– Hewlett Packard (HP) is a company that has restructured its
organization around market-facing processes, rather than
functions. Order fulfilment has been recognized as a core
process and so, on a global scale, there is one order
management system architecture that links order entry, order
management and factory order/shipment processing. This core
process is supported by a common information system that
provides ‘end-to-end’ visibility of the logistics pipeline from
order through to delivery.
1.4 Logistics as the vehicle for change (cont.)
• In fact it is through such breakthroughs in Information
Technology (IT) that the type of organizational change we
are describing has been made possible.

• The information network now defines the organization

structure.

• The information that flows from the marketplace at one

end of the pipeline to supply points at the other will
increasingly shape the organization.

• Companies to focus on what might be termed ‘core

competencies’ and to outsource everything else.
 1.4 Logistics as the vehicle for change (cont.)

• the business of tomorrow will only perform those

activities in the value chain where have a
differential advantage, and all other activities will
be performed by partners, co-makers and logistics
service providers.

• In the challenges facing the organization in a

changed environment, it emphasized the need to
break down the ‘walls’ that traditionally have
fragmented the organization and impeded the cost-
effective achievement of customer service
requirements.
 1.4 Logistics as the vehicle for change (cont.)

• Clearly there is a need for ‘pattern breaking’ on a

major scale.

• The only way such significant change will be

achieved is through leadership from the very top of
the organization.
 1.4 Logistics as the vehicle for change (cont.)

• Companies like Xerox, Hewlett Packard (HP), SKF and

Philips have experienced, and are still experiencing,
often painful change as they transform themselves
from functionally based businesses to market-facing
businesses. Whilst the impetus for change differs
from company to company, the engine of change has
been the same – the search for superior
performance through logistics management.