Strategic Logistics Planning 101: 10 Ultimate Strategies for Efficiency and Sustainability in 2023


Strategic Logistics Planning 101: 10 Ultimate Strategies for Efficiency and Sustainability in 2023

Given the immense global eCommerce growth spurred by granular internet penetration, the global supply chains are becoming massive, expanding at a rapid pace and teeming with disruptions. All these factors are key growth drivers for the supply chain and logistics management software market which is expected to grow with a CAGR of 10.7% and hit the ​​USD 52,632 MN mark by 2030.

Despite the rapid adoption of software solutions and platforms for management of supply chains, logistics planning, and optimization, stats reveal the following:

  • Only 6% of companies have full supply chain visibility and 69% of the companies still lack proper visibility into the supply chains.
  • Only 22% of companies have a proactive network in their supply chains
  • Logistics and reputation face the hardest hits by disruptions accounting for 54% of financial losses.

So, managing supply chains is tricky. However, best practices such as strategic logistics planning can not only help businesses manage supply chains but also steer their businesses towards larger goals, such as sustainability. 

In this write-up, we explore the term – strategic logistics planning, at length and share the top 10 strategies for efficiency and sustainability in supply chains.

What Is Strategic Logistics Planning

The process of creating a strategic plan for implementing, optimizing, planning, and orchestrating all the logistics processes in a supply chain is called strategic logistics planning. It involves a wide range of activities, such as asset planning, route planning & optimization, real-time monitoring, and leveraging data insights for charting out the most efficient and optimal plan for every moving part. 

As logistics planning involves all the moving parts, such as vehicles, drivers, carriers, 3PL providers, freight forwarders, and n number of other parties for different services and processes, it is a huge operational puzzle. Hence, investing in automation for one or a few processes is not the ultimate solution.

Strategic logistics planning requires a robust and in-depth understanding of:

  • How everything works
  • Who does what
  • What/who affects what/who

Hence, it requires robust automation for the entire ecosystem such that all the process dependencies are considered, different operations can be optimized as per different criteria, and data insights are available for each variable. 

In the following sections, we are going to discuss how to achieve this.

Let us begin by having a look at the core elements of strategic logistics planning.

Elements of Strategic Logistics Planning

There are a number of elements that every supply chain or logistics management professional should consider for logistics planning or for creating a logistics strategy. While the key considerations can vary depending on the business model and use cases, the most critical elements to be considered are mentioned below.

1. Inventory Management

Having and maintaining inventory accuracy is crucial for both – internal operations and customer-facing systems. In a global survey done on technology and business stakeholders, 40% of respondents voted inventory management to be the most promising AI. 

However, inventory management is a gamble if done poorly – order more goods, and you face the risk of losses owing to less demand; or order less and you are losing business because you don’t have goods to sell!

Mastering the dilemma requires a careful study of the data from the market, customers, sales, and inventory and finding out patterns and trends for strategic management. Smart logistics management platforms with in-built AI/ML algorithms can help businesses to get predictive insights and manage the inventory and inventory movement smartly.

2. Storage and Distribution

Whether you are selling the goods or sourcing them, storage and distribution are a duo that has a detrimental impact on your profits. No strategic logistics planning can be complete without considering the storage and distribution of the goods such that the fuel cost is minimum, the fleet cost is minimum and asset utilization is optimal. 

While storage might not be that critical for goods such as apparel, shoes, etc. it becomes a game changer in the fresh produce and chemical industry. The same is true for cold chain logistics where improper storage and distribution can lead to unimaginable losses. Smart end-to-end logistics management ensures that all the quality constraints are positively enforced and bound by contracts and the distribution happens in an optimized as well as cost-effective manner.

3. Distribution Partners

Having the right distribution partners in terms of logistics is the key to happy customers and profitable businesses. Generally, when it comes to choosing the right distribution partner, businesses generally end up doing manual comparisons in terms of rates, availability, volume commitments, deals, etc.

However, all these comparisons are done for a few variables, mostly money. This tends to affect the overall robustness of the logistics network and productivity. On the other hand, smart logistics management software solutions help businesses manage every single aspect, person, company, or stakeholder involved in the entire logistics ecosystem in a smart manner. 

These platforms automate the mundane processes of comparing the service providers on the basis of multiple criteria that can be chosen in a custom manner. Further, all the service providers are ranked on the basis of previous performances and all the documents & billings are tackled digitally.

Elements of logistics planning

4. Material Handling

Packing, bagging, labeling, creating a dispatch, and sending out the same – there are multiple considerations when it comes to material handling. While enterprise-level organizations tend to outsource these processes, they tend to lose visibility into the operations by doing so.

Also, when it comes to customer communication or real-time status checks, the service providers fail to offer granular insights into shipment movements. This affects the overall user experience and mars the CX as well.

Automated logistics management software solutions can curb this challenge by offering a centralized integrated dashboard for all the stakeholders and parties involved. These solutions automate the label generation process which simplifies the shipment tracking process.

5. Route Planning & Optimization

The shortest route is not the ideal solution always. When businesses are looking for delivering multiple orders in one trip or clubbing the returns with deliveries or so, creating the optimal route with a cluster of delivery locations is the right answer. 

Manual management fails here as route optimization is a dynamic process that is done keeping the real-time traffic and road conditions in mind. Automated solutions for route planning and optimization help businesses to monitor, manage, track and control delivery movements in real-time.

6. Asset Optimization

Finally, strategic logistics planning also involves planning for assets (vehicles and drivers) such that they are used in an optimal manner. Asset optimization ensures higher cost savings via:

  • Lower fuel costs
  • More number of orders delivered per trip
  • Maximum vehicle capacity utilization
  • Lower rider costs
  • Real-time asset management and monitoring
  • Better fleet management during rush, seasonal spike, etc.

Investing in smart logistics management solutions automates this process and helps businesses cut down their operational costs.

Now that we have discussed the various elements of strategic logistics planning, let us move on to the strategies for efficient and sustainable supply chains.

Strategic Logistics Planning – Top 10 Strategies for Efficiency and Sustainability in 2023

1. Smart Automation Done Smartly

Automating a single component, process or operation leads to partial benefits and can also pose disruptive challenges to the management. The best approach is to automate the entire logistics ecosystem where all the stakeholders have a unified platform for collaboration, communication, and operational management. 

Invest in platforms that offer integrated management for all the parties involved in goods movement. Also, ensure that this platform offers digitized document management, automated invoicing and billing, status standardization for better shipment management, and analytics & reporting to gain actionable insights for core business decision making.

2. Choose the Right Automation

The next strategy is to invest in the right automation. Every business has a different set of use cases for customers, business, and automation. These user cases require different solutions to unlock operational efficiencies and profitability. This means that buying an off-the-shelf automation solution for your logistics is a mistake!

While the entire world is embracing automation, the real benefits are being unlocked only where the right automation is being implemented over the right use cases.

Hence, invest in custom automation that scales up or down as per the evolving business needs.

3. Measure to Improve

You cannot improve what you cannot measure. Hence, start measuring the processes, people, tasks, efficiency, productivity, and everything else that has a direct say in your profits. 

Setting KPIs, tracking & monitoring them, and measuring them against set parameters – this is how you embark on the endless journey of becoming better, more profitable, and smarter.

Every phase of logistics movement – first, middle and last mile – should have a different set of KPIs for all the processes, and people, including the third-party service providers such as 3PLs. This is how strategic logistics planning helps you run your operations in a better and smarter way.

4. Integrated Operations

Now that we have discussed the importance of “measuring things”, the next step is to measure, understand and optimize the working of related things. While 3PL service providers and packaging are two disparate entities in a logistics ecosystem, inefficiency or errors in one can creep into the other.

If a package is labeled incorrectly, the dispatch is going to take it to some other location, and would eventually end up bringing it back to the origin or to some other hub or warehouse. This would not only degrade the customer experience but also escalate the fuel costs, create operational complexities and spur complaints or queries from the customer.

This is how related or dependent processes can affect the overall productivity of the logistics system. Having an integrated operations management interface takes care of such interdependencies and helps in strategic logistics planning. 

5. Business Intelligence from Business Data

Every organization generates terabytes of data in various forms and from various sources. However, this data is unstructured and complex making it impossible to use it for business decision-making. The irony is cruel in this regard, as the key to efficiency and profitability lies in this data only!

Smart end-to-end logistics management solutions help businesses make the most of this data via in-built ML-based data processing algorithms. These algorithms make the sense of the huge amounts of data being generated to identify the core operational loopholes, cost bleeds, inefficiencies, and much more. 

Advanced analytics and reporting features render the inferences in the human-readable form to help business decision-making be smarter, better, and more efficient.

6. Sustainability 

Sustainability is a key agenda in every strategic logistics planning across the globe. Recent years have seen a huge paradigm shift in terms of logistics and business operations and every stakeholder is concerned with the carbon footprint of every shipment they are associated with.

Right from eco-friendly alternative fuels to autonomous deliveries, and from fuel savings to trapping fuel-wasting activities in logistics – there are multiple ways to unlock sustainability in logistics operations. 

The best way is to cut down the wastage of fuel via improved route planning, asset optimization, and carbon emission tracking.

Strategies for logistics efficiency and sustainability

7. Gaining 360-Degree Visibility

Which shipment is traveling via which carrier and which shipment is vulnerable to demurrage? Which shipment is taking longer than expected for delivery and whether all the system-suggested rules are being followed or not?

These questions tend to bug the logistics and supply chain professionals like nothing else. Having a 360-degree view of all the logistical movements helps ensure that all the components are working as expected and any disruption is caught well before it evolves into business risk.

Smart logistics management platforms offer granular visibility into multiple logistical components. Thus, businesses can have extremely precise control over the operations and processes right from the start, such as RFQs, spot inquiries, documentation, billings, invoicing, and tracking.

These platforms offer granular tracking of key milestone events, that can be relayed to the customers for highly engaging and insightful information regarding dynamic ETAs. So, all the stakeholders can check and track every milestone, such as shipment pick-up, shipment loaded, shipment reached the port, shipment pick-up done at the destination port, etc.

8. Working With Multiple Carriers

Working with multiple carriers or logistics service providers help businesses scale their operations, and diversify their service offerings. The online delivery landscape is highly diverse and has multiple delivery types, such as same-day delivery, next-day delivery, time-bound delivery (2-hour, 90-minute, slotted and 10-minute delivery), and express delivery. 

One 3PL partner might not be able to cater to all types of deliveries but working with multiple delivery providers can obviously help. When businesses are working with multiple carriers, they can streamline the delivery operations for multiple locations. 

Thus, they can minimize the risks related to deliveries such as delays, by simply choosing the other partners’ services in case one fails to do so. 

9. Optimizing Multiple Variables 

As discussed above, the best way to automate the logistics processes is to implement it for the entire ecosystem. Likewise, when it comes to optimization, it is important to optimize multiple variables in one go. 

Inventory, transportation, routing – all these are immensely important for newly emerging delivery models, such as hyperlocal deliveries. Similarly, freight procurement, carrier management, bidding, and container tracking are extremely important for the manufacturing industry. 

Hence, it is important to consider multiple connected variables for optimization during strategic logistics planning.

10. Binding the Loose Ends

To create a self-nurturing and highly integrated logistics ecosystem, strategic logistics planning should consider the extremes of every process, such as seller and customer in a typical delivery scenario.

Ignoring these ends leads to inefficiencies and process loopholes, such as unhappy customers leading to churn or untrapped fake deliveries, leading to business losses. We recommend investing in solutions that ensure the management of both the extremes – the origin of shipment and delivery point via smart and custom touchpoints, such as proof of delivery (ePoD), NDR (non-delivery reason) management, cash conciliation, delivery status confirmation and multiple checks for delivery accuracy.

Strategic Logistics Planning – Where Does Shipsy Fit In

Shipsy is a smart end-to-end logistics and delivery orchestration and management solution that helps businesses manage every single logistical movement with precise automation. It offers custom solutions for exhaustive business use case relevance and addressing the exact core pain points, irrespective of the industry.

Shipsy’s smart platform comes with multiple intuitive functionalities delivered via an integrated dashboard that is extremely easy to use and customize. Shipsy offers an integrated business intelligence solution, Shipsy BI as an in-built offering to help businesses make the most of their logistical data and use the same for strategic logistics planning. 

Some of the key offerings of Shipsy include:

  • Freight Procurement
  • Shipment Tracking
  • Route Planning & Optimization
  • First Mile, Middle Mile, and Last Mile management solutions
  • Courier Aggregator
  • On-demand delivery management platform 

Shipsy’s smart offerings help businesses optimize and manage their logistics processes and unlock:

  • 56% reduction in man-hours for shipment handling
  • 34% reduction in incidental costs
  • 37% decrease in ETA SLA breach
  • 64% increase in customer satisfaction
  • 65% reduction in manual ERP data entry

For more information or to get started with Shipsy’s smart offerings, please schedule a custom demo today!


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