Supply Chain Logistics management is used to meet customer needs by planning, controlling, and making use of the sustainable growth and capacity of related data, products, and businesses from the starting point to the last mile. It helps the organisation cut costs and improve the services delivered to end customer.
The logistics management process starts with gathering the raw materials and ends with getting the goods to their final destination. It encourages process technique, organisation, and use by sticking to what the client wants and what the industry standards are.
Before understanding Logistics Management, it’s advisable to understand What is Logistics, What It Means and How Businesses Use It: Read Here
Logistics Management: What it is?
Logistics & Supply Chain management focuses on moving goods to different places to meet customer needs. It is very important for logisticians to decide how many different kinds of goods they need to store. He can make a guess based on what people wanted in previous seasons.
Types of Logistics Management:
The logistics management process starts when raw materials are collected and ends when goods are delivered to their final destination. There are many different kinds of logistics that go along with different steps in the supply chain. Following are the main types of logistics management:
- Procurement Logistics: The logistics of getting the raw materials and tools needed for production is called “procurement logistics.” It is one which makes plans, buys materials, and coordinates various materials that are needed at the right time and place so that goods can be produced. It includes storing materials and moving them to where they are needed. It also looks at the level of supply at different points in the production process to make sure that the needs of consumers are met on time.
- Production Logistics: Production logistics is the process of putting together the different supplies from different places to make a product. It makes sure that everything is working together to make what is needed. This means taking care of a lot of different tasks, like getting parts, distributing them within the company, and taking care of the product, its packaging, and sending it to the warehouse. Its goal is to make the whole process of production better by making sure that all of the steps work well together.
- Sales Logistics: Sales logistics is the process of moving goods from the warehouse to wholesalers, retailers, and customers. It includes all the things that are done to make sure that goods get to the right people at the right time and in the right place. Customer satisfaction is important, and care is taken to make sure that goods are delivered in the right way at low costs.
- Recycling Logistics: Recycling statistics are about getting recyclable items back from customers so they can be used again. It collects things like empty cans, containers, used papers, empty plastic bottles, old computers, packing, and ink cartridges. Recycling logistics are becoming more important as people try to save the environment by reusing materials instead of throwing them away.
- Recovery Logistics: Recovery logistics is the process of moving goods backwards, from the end consumer to the producer. It takes care of everything that has to do with moving unused products that customers don’t want or don’t meet their needs. Recovery logistics focuses on getting goods from where they are used to where they came from as cheaply as possible in order to get their value back and get rid of them in the right way. Value is brought back by reusing, recycling scrap, reworking, and fixing up.
Logistics & Supply Chain management is a vital process that ensures everything runs smoothly and successfully every day.
Logistics Efficiency Metrics: Efficiency is a big part of any service, whether it’s logistics or something else. Some of the most important efficiency metrics in logistics & supply chain management are:
- Warehouse Capacity: It is an important factor to keep track of stock levels and plan logistics effectively.
- Delivery Time: If a consumer placed an order with you, you must promptly fulfil it and acknowledge the customer. Your responsiveness leaves a positive impression on the customer and demonstrates the flexibility of your service.
- Order Accuracy: Stocks in the warehouse are easy to count and keep track of. But it takes extra work and focus to make sure that the products are accurate. If the wrong products are sent to a customer, they will send them back and ask you to send the right ones. So, in the end, it will cost the logistician loss.
- On-Time Delivery: When taking an order from a customer, it’s crucial to stick to the promised delivery date and time. The customer’s experience is ruined because of the order’s late arrival. On-time delivery is crucial for continuing to build and maintain customer relationships.
- Transportation Cost: When figuring out the right cost of transportation, main logistics make a mistake. To make your logistics service more efficient, you should choose the shortest route possible that will save you the fuel cost.
- Damaged Products: Sometimes, products get to the customer damaged for a variety of reasons. So, you should always tell the customer what your terms and conditions are.
- Inventory Turnover Ratio: The inventory turnover ratio shows how many times the inventory was sold in a certain amount of time. It is also called ” stock turnover.”
Improving the overall supply chain operations by investing in logistics & supply chain management system is indispensable in maximizing profits, Here are the top 10 objectives of logistics management…
Role of Logistics & Supply Chain Management:
Logistics is like the oxygen that lets the supply network breathe and live, because without the right logistics, products wouldn’t move smoothly along a chain. Let’s look at how logistics becomes the solid foundation on which any production network rests :
- Order Fulfilment: In an inventory network, the purchase request is an important part of any exchange between buyer and seller. This request or purchase order has all the important details, like the item’s specifications and business terms. Appropriate logistics make sure that the order is taken care of on time to make sure that the execution cycle goes well and to remove any doubts about the availability of materials and payment terms.
- Inventory Management: The best inventory is one that has good capacity to make sure smooth stockpiling and can also cut down on costs. Logistics Management makes sure that there is a balance between demand generation and supply. A poorly managed stock can eat up a big chunk of the profit in an inventory network if there is a mismatch between demand and supply as fulfilment of order or not able to deliver the product demanded will not only incur additional cost but also is derogatory to the company’s goodwill.
- Warehouse Management: Company warehouse is equivalent to store network’s sensory system, and it’s also kind of like the control room for all things strategic. The goodwill of an organisation depends on how well it stores its inventory. How well the logistics of an inventory network work depends a lot on things like area, number, size, format, and configuration.
- Transport Management: Transport is what keeps the production network moving, both literally and figuratively. It is the most important part of supply chain management as it facilitates delivery of goods from origin to end point. The transportation system needs to be thought about to make sure that the delivery is quick and doesn’t cost too much.
- Material Handling: It is an important part of logistics that is often overlooked in supply chain management. Since no good steps are taken to deal with regular risks, delays, and unexpected costs. Material handling has become much more profitable as a result of the use of machines. To make sure the material handling process goes smoothly, you need to think about the amount, the speed, and the level of management.
- Data Framework: Logistics helps move data along a supply chain, so a data framework plays a big role in guaranteeing better assistance. Data Unification helps in breaking down decode important information, which can help a company improve the logistics of their inventory network.
In summary the issue of order fulfillment, inventory management, warehouse management, transport management, material handling and data unification, all can be resolved using logistics solutions and this clears the role of logistics management in supply chain.
Best Practices for Major Disruption in Logistics & Supply Chain Management:
As a result of the COVID-19, companies have had to rely more heavily on logistics management to meet consumers’ evolving needs and maintain normal operations. Logistics networks are vulnerable to disruption from a variety of sources, including the environment, geopolitics, and technology. It is important to follow best practises for logistics management in the event of disruptions so that scalability, delivery, and delays in services are minimised. Fortunately, digitization of the modern supply chain is well underway, with new technologies and solutions promising to add efficiency and enhance accuracy.
Here are some best practises that can aid in logistics & supply management disruption response:
- Utilize crowdsourcing skills to improve your staffing and vehicle capacity for agility and efficiency. This will assist to reduce costs, accommodate demand spikes, and optimise last-mile deliveries.
- Post pandemic – Adopt contactless delivery and payment solutions to protect the health and safety of your customers and employees. Adaptability to several payment methods, such as tap-and-go and digital wallets, can also increase customer happiness.
- Maintain a backup plan to deal with unforeseen situations. Establish a “crisis team” to guarantee readiness for any logistical disaster.
- Real-time and dynamic routing features can maximise delivery efficiency, emergency delivery, and multiple drop locations along a single route.
- Try introducing cost-effective methods and value-added services for customers to maintain price control and avoid unwarranted price increases.
- Create a “dark store” that can be used as a distribution centre to support a “click-and-collect” service, in which a customer receives their online orders, or as a platform for order fulfilment for online sales.
- Continue to invest in emerging technologies, such as artificial and augmented intelligence, advanced analytics, automation, warehouse robotics, and many more, to enhance the scalability and competitiveness of enterprises.
Overall, logistics management and supply chain management must improve and adapt to the most recent technological advancements in order to fulfil increasing customer demands, generate revenues, and accomplish growth. Companies must employ the most effective logistics & supply chain management strategies to improve operational performance by prioritising process coordination and information exchange.
