The role of logistics cost optimization in enhancing the efficiency of supply chain operations

Abstract

Optimizing logistics costs is essential for businesses in today's global economy, extending beyond mere cost reduction to balance costs, quality, speed, and flexibility. This literature review provides a comprehensive analysis of strategies and techniques to enhance the efficiency of supply chain operations. It delves into various theories, including agency theory, transaction cost theory, contingency theory, and the theory of dynamic capabilities, to shed light on logistics cost optimization. Environmental factors, logistical resources and infrastructure, and team competencies are identified as key determinants of supply chain efficiency. The review highlights the importance of flexibility and adaptability of management control tools in response to market dynamics. It discusses the impact of financial management instruments like cost analysis, key performance indicators, tracking reports, and benchmarking on logistics efficiency, as well as their role as innovation levers for efficient logistics. This synthesis offers decision-makers insights into best practices, recent innovations, and emerging trends in the field of logistics. It proposes an integrative model to conceptualize logistics cost optimization strategies, serving as a foundation for further development of hypotheses and empirical studies.

Keywords: Logistical cost optimization, Supply Chain, financial management instruments, logistics efficiency.

JEL Classification: L2

Paper type: Theoretical Research