Tips for efficient, effective, logistics management.
Updated: Oct 19, 2020
“The line between disorder and order lies in logistics…”.
This quotation by Sun Tzu, Chinese general and military strategist in the 6th century, is as relevant today in the field of logistics management - an essential component of supply chain management.
Without efficient logistics management, the many phases of any product from manufacture to the customer will fast become chaotic.
What is Logistics management?
The Handbook of Technology Management succinctly terms logistics management as ‘is as having the right item in the right quantity at the right time at the right place for the right price in the right condition to the right customer.”
Logistics management is a subsection of supply chain management responsible for the planning and implementation of the efficient, effective flow and storage of goods and information between the point of origin and point of consumption in order to fulfil customer requirements and those of the business.
The larger the organisation, the more complex the logistics management. It’s therefore imperative to have a comprehensive management plan.
The many elements in planning include the procurement, storage, and delivery of goods. Time, transportation and costs must also be taken into consideration. Ultimately, the purpose of detailed planning is to achieve maximum results and profits in the least possible time.
No plan is completely foolproof.
It’s critical to have a contingency plan for every element in the logistics plan in order to respond to unforeseen circumstances that may arise such as shortages, shipping delays or damages in transportation. Inventory management is a major problem area and the realtime tracking and management thereof (by in part the implementation of a barcoding system) will improve the effective functioning of the supply chain and the companies bottom line.
Technology plays a major role in increasing efficiency in the supply chain. Todays software can track, measure and analyse any element in the logistics process, saving time and maximising performance.
Potential problems areas in the supply chain such as inadequately tracked fleets, inventory or mismanaged warehousing can be enhanced by automating systems.
Employ a logistics manager
The appointment of an experienced logistics manager, with excellent interpersonal skills, is essential when working with a variety of people across the supply chain. They should have strong industry networks in the event logistical changes need to be implemented.
Proper warehouse management is a prerequisite for smooth, effective logistics. The storage of goods and arrangement of warehouses affects the shipping process.
Perishable items should be stored in a cool place or, in the case of food products, refrigerated. High-demand products should be placed in easily accessible areas. Easy access by forklifts speeds up the picking process and use of an inventory management system integrated with a barcode scanner will make it easier to track incoming/outgoing items and minimise waste. (For further information on the benefits of barcodes for warehousing operations: https://www.barcodeireland.ie/post/10-benefits-of-barcodes-for-warehousing-operations)
Minimise intermediary services
Intermediary services such as transportation, storage, marketing and recycling, incur major costs in the implementation of supply chains. For effective logistics management, logisticians plan routes in order to minimise the need to involve third-party services.
Transportation costs are one of the larger expense categories in logistics management. In order to save time and money, the fastest and safest route between destinations should be adopted. Maximum consolidation of transportation volumes should be utilised to reduce transportation costs.
Packaging should be cost effective whilst protecting goods, and optimised in such a way as to occupy less space and minimise increase in weight.
Efficient transportation improves quality of service to the end user in the speed of delivery and transportation of goods, in proper storage conditions, within optimal time limits - especially perishable goods.
Insurance and support documentation are fundamental in logistics, eliminating problems associated with legal restrictions in the storage, transportation, and marketing of goods.
When considering the cross border delivery of goods, it’s important that the transportation thereof fully complies with customs requirements and contains the necessary documentation.
Learn from past mistakes
As Henry Ford said, “The only real mistake is the one from which we learn nothing”.
In order to optimise the supply chain, it’s necessary to review and learn from past mistakes. It’s important to hold regular team meetings where mistakes are discussed and effective systems are implemented to prevent their reoccurrence.
Logistics management creates visibility within the supply chain. Analysis of historical data and the tracking of goods in real time allows for the optimisation of the flow of materials. Visibility in the supply chain results in operational cost savings, optimisation of inventory levels, control of inbound funds and the organisation of the reverse flow of returned/discarded goods.
Logistics management is about streamlining efficient and effective methods of moving resources and products from conception, to completion, to the customer. The goal is to meet customer demand, customer service and thereby retention, by meeting their requirements. Efficient logistics not only improves customer service but elevates the company’s reputation and brand, which in turn creates new/further business, thereby increasing revenue.
The adoption of logistics management best practices can render a competitive edge to your business.
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