Late and inaccurate deliveries are a recipe for disaster. Businesses with a painfully slow order fulfillment run the risk of losing customers to rivals. To prevent this from happening, you need to streamline your logistics.
Before we move any further, let’s answer the question- what is logistics? Simply put, logistics involves managing the flow of things between the point of origin and the point of consumption. It is an important subset of the supply chain. Some common resources managed in logistics include tangible goods such as equipment, supplies, and materials. To manage your logistics effectively, you need to develop a logistics management plan.
What is logistics management?
Logistics management is a subset of supply chain management. It involves planning, implementing, and controlling the efficient flow of goods and services from origin to consumption. Logistics management helps businesses control costs and improve customer experience. Many businesses use logistics management software to analyze, model, and optimize the complexity of logistics.
Logistical activities can be classified into two categories:
Inbound logistics
Inbound logistics involve the flow of goods and other inputs from suppliers to the warehouse. To properly manage your inbound logistics, you need to have a communication channel that facilitates effective communication between your teams and vendors in place.
Outbound logistics
It involves the flow of products from the business to its customers. For proper management of outbound logistics, you must come up with a strategy to maintain the interface between different transport operators and distribution channels.
Some elements of logistics management include:
- Choosing the most cost-effective transportation routes
- Choosing the best (in terms of time taken and cost) delivery method
- Selecting the best vendors (capable of providing the best logistics solution)
Why every business must have a logistics management plan
Logistics management helps deal with the complexities of logistics. A well-designed and flawlessly executed logistics management plan is geared towards helping management find answers to important questions. Some benefits of logistics management include:
- Helps reduce costs and improve efficiency by promoting supply chain transparency
- Creates new revenue streams and leverage the existing ones by improving customer experience
- Ensures the efficient flow of manufacturing operations
- Provides a competitive edge by helping the business bring down its order fulfillment errors
Logistics management best practices
Major players in your industry working on a logistics management plan is not a good enough reason to jump on the bandwagon. You should think about getting started with logistics management only when business stakeholders are prepared for the leap. A well-thought-out plan will leave no room for speculation, confusion, and ensuing chaos. After you have got your house in order, implement your plan. You cannot implement your warehouse management plan and forget it. Remember, no plan is perfect. To get the most out of your warehouse management plan, you need to streamline your operations.
Following these logistics management tips will help you get one step closer to your ultimate aim of achieving operational excellence:
1. Plan everything
When it comes to logistics management, proper planning is the key to success. Plan everything from procuring goods to delivering them to the exact location. Devise flow charts that focus on minimizing transportation time and cost. Planning will help you accomplish more tasks in less time and maximize profits.
No matter how good your plan, covering every eventuality is almost impossible. Have a contingency plan for unforeseen circumstances related to internal issues or issues with your vendors, transportation, and products. Instead of banking on one supplier or vendor, work to create an extensive network.
2. Define your objectives
What do you expect to achieve by implementing a logistics management plan? Do you want to increase sales? Or improve the customer experience while cutting operational costs? Or do you want to make your supply chain leaner and more efficient? It is important to answer these questions. Revisit your goals at regular intervals and tweak them according to your changing needs. Take a thorough look at your processes and figure out how they contribute to your supply chain management goals.
3. Embrace automation
You cannot afford to rely on manual processes in this day and age. Manual processes are overly complex and highly prone to errors. To leverage your supply chain, automate different processes. Invest in business process software that provides a bird’s-eye view of different processes, helping your managers track the movement of goods and make decisions promptly based on the available information. To automate fleet management, opt for a fleet and inventory management software. Automating systems will help eliminate problems such as inaccurate/inadequate inventory tracking and mismanaged warehouse processes.
4. Train your employees
Investing in modern technologies and adopting the latest trends won’t mean anything if your employees don’t have an idea about how to leverage them. Before implementing a plan or process or acquiring software, explain to your employees what they stand to benefit and how the proposed change will help make their lives easier. This will help counter resistance to change. Conduct regular training sessions that focus on introducing employees to new concepts and help identify ways to improve existing processes.
5. Measure performance
Continuous improvement is the name of the game. To stay on top of your game, never let an opportunity to improvise pass you by. Have a process in place to integrate feedback, analysis, and measurement. Use data generated by the software to identify and close gaps. Monitor metrics related to different operations such as cycle metrics, service metrics, and cost metrics.
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