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The key to achieving logistical leadership is to master the art of matching with operating competency and commitment to key customer expectations and requirements. This customer
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commitment, while in an exacting cost framework, is the logistics value proposition. It is a unique
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commitment of a firm to either an individual or selected customer groups. The typical enterprise
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seeks to develop and implement an overall logistical competency that satisfies customer expectations at a realistic total cost expenditure. Very seldom will either the lowest total cost or
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the highest attainable customer service constitutes the appropriate logistics by strategy. Likewise,
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the desired combination will be more different for different customers. A well-designed logistical
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effort must provide high customer impact while is controlling operational variance and minimizimg
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inventory commitment. And, most of all, it must have relevancy to specific customers. Significant advances have been made in the development of tools to aid management in the measurement
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of cost/service trade-offs. Formulation of a sound strategy requires a capability due to estimate
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operating cost required to achieve alternative service levels. Likewise, alternative levels of system performance are meaningless unless viewed in terms of overall business unit customer
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accommodation, manufacturing, and procurement strategies. Leading to firms realize that a well-designed logistical system can help achieve competitive advantage. In fact, as a general
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rule, firms that obtain a strategic advantage based on logistical competency establish against the nature of their industry's competition.