James L. Heskett emphasizes in "Logistics—Essential to Strategy" (1977) how important logistics is to forming and sustaining corporate strategy. He contends that rather than handling logistics as a stand-alone operation, businesses should include it into their operating plans for long-term success. He suggests performing a logistics strategy assessment, reorganizing logistics systems, and keeping logistics at the forefront of business strategy in order to accomplish this.
Heskett uses real-world examples to highlight the strategic significance of logistics. In one instance, an entrepreneur set up a private-label bleach production facility close to Boston in order to lower transportation expenses. In order to save transportation costs, the facility was situated near supermarket chains so that retailers could load bleach into their trucks after completing deliveries. The firm was able to get effective truckload orders from retailers and grow its product range because to this advantageous position.
This article highlights how important elements like factory location, procurement of raw materials, and customer service standards are to the success of a corporation. According to Heskett, businesses must reevaluate the role of logistics in their operations in light of changing difficulties such as government laws, changes in the transportation system, energy limits, and technology improvements. To successfully manage these changes, he advises companies to create competitive strategies based on ideas like deferral, speculation, standardization, consolidation, and distinction.
In the end, Heskett contends that logistics is an essential strategic element for attaining competitive advantage and long-term company success, not only a support role.
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