Innovate to achieve Competitive Advantage

Innovation : Can give you that Competitive Advantage?

Are you like many Forwarding and logistics companies finding it challenging to deliver both excellent customer service and a profitable bottom line? While it is challenging, finding balance is a business imperative. Today we are going to explore one of the most effective options we've seen and recommended to help companies overcome challenges inherent in forwarding and logistics business.

This email is part of Axe Bpo series of communication comprising of highly relevant information to help you differentiate Your Forwarding & Logistics business offerings and to Stay ahead in the Competition.

Innovation :

The reality for some of Forwarding and Logistics companies is they are are still in fiercely competitive markets where the market seems to dictate the price, and where only decision seems to be accept the price or get out of the market.

Clearly, when you can add features or functions to your product, you can command a higher price, or at least defend your price from being 'Wal-Mart-ized' (rhymes with downsized or put out of business). Features can be added through your own in-house operational team, or via licensing or acquiring complementary service offerings. This is the model that Google now used so well for years - partner and then acquire differentiating features. Regardless of how you feel about how they achieved that, I'm sure you agree their approach has been very effective.

One CEO said adding features and functionality is a core strategy his organization employs so they can afford to keep doing business with Walmart. You see, Walmart demands that vendors consistently reduce the price of products they buy, year after year. Clearly, no product has infinite potential for margin reduction (and besides, what kind of way is that to live?). So, this innovator has his internal R&D group develop new products which they sell to Walmart at higher prices since there is no established pricing model.They offer Walmart a first-right of refusal - whereby Walmart gets a unique product and the company enjoys slightly higher profit margins.

While many companies talk innovation, what's truly important is "achieving the results of that innovation, according to the standards of your clients, internal employees, or suppliers".

Logistics innovation is important for companies of all sizes. It means looking at the way a company applies its assets, operating resources, and capabilities to develop new ways to satisfy customer needs.Companies should measure the value of innovations or improvements by how well they help meet customer demands. While a small number of companies are implementing breakthrough or what is called "leapfrog" innovations, nearly every company today is looking to innovate in one way or another. And with good reason a company with a static logistics strategy will not be successful in the future.

When evaluating how important innovation is to your organization, ask, these two questions :

  • Will pursuing a strategy of incremental improvement allow us to meet our business objectives?
  • Can we avoid having our products and services become commodities?

The problem companies are well aware that if they do become commoditized, the ability to price effectively decreases, and so does profitability. Organizations are developing innovations across the entire Forwarding and Logistics continuum. Some key areas of activity include the following:

Adapting :

"The 'adaptive Logistics' has been the buzz over the last few years". Some organizations have moved beyond talking about an adaptive supply chain to actually implementing one, putting in place the necessary technology, people, and global operating models. This means companies will be operating with a global view of demand, and a logistics process enabled throughout the world to satisfy that demand," he explains.

Collaborating :

Collaborating with trading partners is one key area of innovation today. Companies had been operating within their own borders, whether internally or around the world. Today, they are looking beyond their boundaries, collaborating with their trading partners to collapse the time pickup and delivery.

Integrating :

Breaking down silos and integrating functions helps companies develop creative solutions.Companies that conduct business in an integrated environment can be more innovative. To transform the forwarding and logistics business, companies need to have a strong desire for internal and external collaboration. Transformation cuts across departments and areas of focus within a company. It also usually links with the extended enterprise, such as key suppliers, customers, and network partners.

Some companies talk about innovation; others deliver it.


What features or innovations could you add that would give you a competitive advantage? Ask your sales and customer service teams what they think.

Write a Comment

Your email address will not be published. Required fields are marked *