Value creation through logistics activities

The special value of logistics

Customers judge the value of merchandise not only by quality, but also by availability. Logistics can increase this value. Suppliers or distributors, for instance, can offer the customer increased added value by taking over logistics activities like free delivery. Such performance-oriented concepts improve customer satisfaction and create competitive edges.

Assumption of the customer’s value-creation logistics activities by the supplier

This article contains additional information and interactive features.
Open the Flash version of this article here.

How logistics creates value

Logistics activities are necessary if a customer is to make optimal use of goods and products. In this context, one also speaks of the utility value of merchandise. This utility value can be increased not only by improving the characteristics of the merchandise, but also by improving the availability of the merchandise.
The effective, or actual, availability of merchandise can be optimized in various ways. On one hand, a supplier or vendor of merchandise can improve his own logistics activities. On the other hand, he can take over further logistics activities for his customer and increase efficiency as a result. The logistics service is sold to the customer together with the merchandise and provides added value to the supplier or vendor in the process.
For instance, the supplier can deliver the goods to the customer’s receiving department. He can also offer the customer a full range of logistics services – from shipment, acceptance, receiving and warehousing to provision of the items to the production line and inventory management.

However, it makes sense for the customer to outsource logistics activities only if this decision will lower logistics costs or if a higher level of services can be provided while logistics costs remain stable. Apart from the supplier, such logistics services can also be offered by logistics service providers [1].

PDF view