The Logistical Value Proposition �Ŀ�����

The Logistical Value Proposition. The Logistical Value Proposition. The Logistical Value Proposition From supply chain logistics management chapter 2 by Donald J.bowersox. Preface��Thus far it has been established that logistics should be managed as an integrated effort to achieve customer satisfaction at the lowest total cost. Logistics performed in this manner creates value.In this section, the elements of the logistical value proposition, service, and cost minimization are discussed in greater detail. Almost any level of logistical service can be achieved if a firm is willing to commit the required resources. In today's operating environment, the limiting factor is economics,not technology. For example, a dedicated inventory can be maintained in close geographical proximity to a major customer. A fleet of trucks can be held in a constant state of delivery readiness. To facilitate order processing, dedicated communications can be maintained on a real time basis between a customer and a supplier's logistical operation. Given this high state of logistical readiness,a product or component could be delivered within minutes of identifying a customer requirement. Availability is even faster when a supplier agrees to consign inventory at a customer's facility, eliminating the need to perform logistical operations when a product is needed. The logistics to support consignment are completed in advance of the customer's need for the product. While such extreme service commitment might constitute a sales manager's dream, it is costly and typically not necessary to support most customer expectation and manufacturing operations.