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Logistics activities play a critical role in adding value, particularly time and place utility. Hence, warehousing is an essential part of any logistics system. It is a major logistics activity, but, more recently, the provision and use of distribution centres has become more common. In relation to warehouses and distribution centres Grant et al (2006, p229) state, “The term distribution center (DC) is sometimes used, but the terms are not identical. Warehouse is the more generic term.”
Logistics Value Proposition
The key to achieving logistical leadership is to master the art of matching operating competency and commitment to key customer expectations and requirements. The customer commitment in an exacting cost framework is the logistics value proposition. The uniqueness in the commitment for a selected group or an individual customer is the value proposition to that customer. In the common trade parlance, one can obtain strategic competency by adding value to the customers by catering them specially. In order to cater them, a well designed and well operated logistical system can help them achieve competitive advantage. The work of a logistical value proposition is a vicious circle which can be understood with the help of a diagram as presented below.
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