Logistics article

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Logistics Article
“Performance management in supply chains: logistics service providers’ Perspective” is a 16-page journal article by Helena Forslund that presents the results of a study to evaluate how logistics service providers can actively improve logistics performance. Perhaps the greatest take on the article is the author’s perspective on logistics cost reduction and its effect on logistics performance as a variable. The article makes ten main observations. Firstly, logistics service providers (LSP) take care of all their customers’ logistics needs and act as intermediaries thereby allowing for specialization that improves efficiency and reduces redundancies. Customers can focus on production whereas LSPs will specialize on logistics thus reducing supply chain costs (Forslund 296-297). Secondly, they advance logistics performance by focusing on improving efficiency with regards to lead time and flexibility thus ensuring faster movement of goods within the supply chain and reducing the costs associated with warehousing and storage. It makes it easier to create a schedule that moves the required goods when needed and synchronizing activities with the production department so that production focuses on what needs to be moved (297). Thirdly, LSPs are specialized to take care of all their clients’ logistics needs thereby improving synergy and reducing duplications so that redundant logistics expenditures are eliminated. In fact, the article enunciates that LSPs are an adapter for logistics by taking over all existing supply chain activities with the intention of improving efficiency and integration.

Fourthly, LSPs are intended to support an increased scope and integration of logistics activities. This allows for budgetary considerations in the planning phase so that clients can select a plan that best fits their needs at the lowest cost. For instance, LSPs will offer different costs based on size and distance since it has different vehicles capacities dedicated to transportation whereas the company would incur fixed costs irrespective of the size of the goods and distance travelled. This ensures that the LSP would be able to offer variable prices thereby reducing costs for their clients (300).
Fifthly, LSPs ensure on-time delivery thus eliminating the costs associated with delays. This aspect also reduces the costs linked with storage since a shorter supply chain is created by allowing to speedily move between production and the customers while eliminating the need for warehouses. Sixthly, it reduces the costs associated with CO2 emissions by improving the efficiency with which goods are moved such that goods intended for the same destination can be moved together to reduce the need for more vehicles to facilitate goods transportation. Seventhly, supply chain targets are synchronized between the LSPs and their customers so that logistics activities are coordinated to improve efficiency and reduce costs (305). Eighthly, LSPs include web-based and integrated IT solutions that have improved tracking capacity so that clients spend less on tracking the movement of goods within the supply chain. This is an important considering since it shifts the tracking cost from clients to LSPs. Customers with good tracking capacity are forced to invest in IT solutions that are subject to rapid changes with technological advances. Ninthly, LSPs introduce excellent real-time data capturing capabilities so that their clients do not have to spend considerable resources in the same activities. They can share this data with their clients to improve operations. This is an improvement for customers who still use manual, costly and time consuming data capturing tools that are linked with infrequent cumbersome analysis. Finally, LSPs are sensitive to their customers’ needs in terms of ensuring integrated targeting that differentiates targets while eliminating wastes and redundancies (305-306). Based on these arguments presented in the article by Forslund, LSPs reduce the costs of logistics and effect the logistics performance.

Work Cited
Forslund, Helena. “Performance management in supply chains: logistics service providers’ Perspective.” International Journal of Physical Distribution & Logistics Management 42.3 (2012): 296-311.