Article written by Marshall Doak, Director of the Southern Oregon University Small Business Development Center
We can all agree that excellent surface and air transportation systems are essential to conducting profitable businesses, but these are just a portion of the array of elements that need to function well for today’s businesses to be successful. Our economy depends upon these systems in order to remain viable. In like manner information transportation, or communications, are essential to effective business operations in today’s economy.  Systems are needed to manage the intersection between services, products, communications and the flow of goods in order to manage the detail, tracking, and inventorying of business elements.  How Logistics Fit in With Transportation
Logistics deals with the storage and flow of goods and services, how to manage the flows, and how to deliver the finished product or service to the end user.  Logistics are what each company needs to master in order to maintain control over the costs of producing the finished product that a company offers.  The manner which logistics are used in reducing costs and improving performance has a lot to do with the efficient way a company uses transportation systems to its advantage.  If a general premise that the movement of goods and services, once under way in a transportation mode, are roughly comparable in cost, then distinct advantages can be created through the efficient management of the logistical puzzle each company has to deal with.  Logistics management is hard to measure, and hard to quantify, but returns dividends to the business that takes the time and effort to work through logistical issues.  Conversely, when not dealt with in an appropriate manner, logistics can be a hidden drag upon an operation, costing time, money, and dissatisfied customers until the issues are corrected. Problems With Logistics A number of problems can come about when discussing logistics.  For example, when using third-party carriers, oftentimes the ability to control the quality, cost and timing of deliveries to end-customers is not able to be forecasted well. The inability to control these critical functions, the manner that you are able to work out customer service issues with clients, and the inability to control the manner a company is represented through their third-party vendors are all causes for provider-client disagreements.  Managing the customer experience to a high satisfaction level is a key attribute of successful companies.  While automation can improve throughput, while systems can provide up to the minute data, while public-utility transportation systems enable the efficient flow of goods to happen, nothing replaces the need for a company to maintain a close relationship with their customers.  Even in modern high-tech times, the  people side of the technology equation oftentimes determines the success of a company. Other problems that a good logistics system handles is inventory control.  Having a great forecasting system in place to meet uneven customer demand for goods and services while minimizing the costs to the company is an imperative if remaining competitive is a goal.  Loss prevention through theft and spoilage, out-of-stock costs and customer retention concerns, fuel costs and shipping charges are all different problems that a good logistics system can be used to mitigate costs.  Although not easily quantified, proper logistics control without out-of-stock issues can move hidden inventory costs from your business to your suppliers and customers, mitigating some costs and risks within your business.   A Reason to Concentrate Upon Logistics
In the words of a best-selling author, a summary of the rewards from having a great logistics system can be: “Logistics are at the core of everything we do in business, and are ultimately the key to success for an entrepreneur, business owner or individual. The better you are at logistics in the workplace, the more time you create to manage logistics in your personal life, enabling you to achieve the Holy Grail of work-life balance.” – Peter J. Strauss
SMALL BUSINESS DEVELOPMENT
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Marshall Doak is an entrepreneur, manager and lifelong small business supporter who works directly with businesses in the Southern Oregon region as Director of the Southern Oregon University Small Business Development Center. He brings extensive production management, organizational development and non-profit management experience to help develop the entrepreneurial community within the region. 
Transportation & Logistics
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