Business Core · Supply Chain · Module
Logistics
Moving things from where they are to where they are needed, on time and intact, at a cost that makes sense.
The idea
How it works
Variability in lead time causes more damage than length. A reliable three-week delivery can be planned around; an unpredictable one-to-three-week delivery forces inventory to be held against the worst case.
Network design determines most logistics cost before any individual shipment is booked. Where things are stored, in how many places, and how far from demand sets the range within which day-to-day decisions operate.
Working with it
In practice
- 01
Measure lead time variability, not just the average
The spread is what inventory has to absorb.
- 02
Match mode to the promise
Air freight for a next-day promise, sea for a stocked one. Mismatch shows up as cost or as broken promises.
- 03
Review network design periodically
It sets the cost floor and is usually inherited rather than chosen.
- 04
Track the last mile separately
It is disproportionately expensive and it is the part the customer experiences.
One level in
The components of logistics
A component is something that exists afterwards which did not exist before — a deliverable or a mechanism, not an intention.
Unpredictable lead time costs more than long lead time, because inventory has to cover the worst case.
The other modules in supply chain
Sourcing
Deciding where inputs come from and on what terms, including how much concentration the organisation is willing to carry.
LearnInventory
What is held, where, and why — balancing the cost of holding stock against the cost of not having it.
LearnResilience
The capacity to keep supplying when something goes wrong — which it will, and rarely in the way that was planned for.
Learn