A company’s cost structure consists of approximately 80% purchased external resources e.g. materials, components, outsourced operations, sub-procurement, systems, services and logistics. Company’s competitiveness depends on, above all, how effectively and professionally these external resources are being found, attracted, exploited, managed, led and developed. The core of competitiveness has moved towards the core of management know-how of these external resources.
Logistics management includes planning, organization, control, solving problems and decision-making. A manager should master the principles of economic function, so that he understands the connection between revenue and costs and their importance to profitability. Networking skills and desire are also important areas of expertise. In particular, managers and directors are required to see the entity instead of one function.
The most important tasks of company’s senior management are reconciling company’s overall strategy and other strategies, such as logistics strategy, so that profitability and customer satisfaction activities are managed. Logistics management practices have changed over the years. Rigid hierarchies are dismantled and power and responsibility have been transferred downwards in organizations. At the same time teamwork has increased and manufacturing cells and service teams make the overall performances instead of phase work.