Logistics refers to the planned coordination of the movement of goods and information in a company. Managing logistics domestically is quite different than managing logistics in a multinational enterprise. A simple example is the much narrower geographic scope you have to manage in a domestic operation. However, a global logistics strategy involves a number of other challenges and distinct factors relative to a domestic business.

Transportation Requirements

Domestic companies typically can use a variety of transportation options to move goods. Ground transportation is a common preference for many U.S. companies. With a MNE, though, you have more limited transportation options. You can't drive freight from Illinois to western Europe, for instance. In fact, many multinational companies use multiple transportation methods to get goods from warehouses to stores or to buyers.

Cost Factors

You have more cost factors to consider in planning global logistics as well. In a domestic business, your costs generally include technology, store facilities, logistics workers and transportation. In an MNE, you typically have these same costs, but you also have to consider tariffs when you trade internationally, as well as additional government taxes and fees. Currency exchange rates also fluctuate, which can positively or negatively affect you as you pay out or receive money across borders.

Management and Coordination

Many U.S. companies have a single logistics manager that oversees all facets of planning and executing the movement of information and goods. While you can have a corporate logistics manager for an MNE, that person often coordinates logistics activities with geographically-dispersed, regional logistics managers. The coordinated effort may cause challenges in decision-making and requires clear plans on how to execute information-sharing and distribution processes.

Supply Chain Partnerships

Many industry suppliers and resellers rely on strong, trusting relationships with core suppliers. A U.S. wholesaler or retailer might have an exclusive agreement to buy certain goods from a key supplier, for instance. These partnerships are still common in MNE's, but different country regulations, geography and economic roadblocks definitely present more challenges in building loyal supply chain relationships. Some MNE's implement an international strategy, whereby each country's operation manages its own supplier or buyer partnerships locally.