According
to the Council of Logistics Management (CLM), logistics
is “the process of planning, implementing, and
controlling the efficient, effective flow and storage
of goods, services, and related information from the
point of origin to the point of consumption for the
purpose of conforming to customer requirements.”
The
key to effective strategic logistics requires the leveraging
of combined assets of a company with key suppliers of
material and services. The strategic logistics is performend
through two strategies: push and pull.
Push
- Manufacturers dominated the retail channel and used
long production runs to gain efficiencies of scale.
Because production is not aligned with sales, surplus
in inventory exists. This excess product is pushed out
to the retailer through use of deals and promotions.
This results in inefficient supply chain management.
Pull
- The system “listens” to the consumer through
the retail channel. Transmits preferences back up the
pipeline and quickly responds with the merchandise demanded.
The objective is to reduce inventory management for
all trading partners.
