Logistics Management is critical to the success of manufactures, importers, and distributors.
Whatever the size of your business, you must understand the importance of organized logistics to meet customer demands. Excellence in Logistics Management gives companies a competitive advantage over their competitors. Logistics decisions can be the differentiator between success and failure of a company. When executed properly you can save money, time, improve business relationships and maintain budget-able profits. Poor Logistics Management may cost time, increase service failures and lost sales.
Supply chains are complex and diverse as they thrive within ever-changing customer demands. Effective Logistics Management streamlines a supply chain by decreasing redundancy, waste of materials and time. This helps supply chain professionals move goods accurately and deliver them to the right location, on time – which is a priority for any successful business.
Many companies look to third-party logistics providers (3PL’s) for support because managing logistics in house is not their core competency and can become very complex and difficult to execute. 3PL’s have the experience and advanced technology which are required to maintain a strong and organized supply chain. 3PLs can help cut costs, improve processes and be much more flexible than companies can in-house. If you look at effective Logistics Management, you might get the impression that it “seems simple”. It requires a lot of special knowledge, skills and professional management to make it look “effortless”. Team Interdependency is required to have a fluid supply chain. People, processes and technology working in concert to flow smoothly is the key to success.
What is Logistics Management?
Logistics management is a supply chain management component that is used to meet customer demands through the planning, implementing and controlling the efficient flow of raw-materials, work-in-progress and finished goods and related information-from point of origin to point of consumption; with a view to providing satisfaction to the customer.
The logistics management process begins with raw material accumulation to the final stage of delivering goods to the destination. By adhering to customer needs and industry standards, logistics management facilitates process strategy, planning and implementation.
Categories of logistics include:
- Third Party Logistics (3PL)
- Fourth Party Logistics (4PL)
- Inbound Logistics
- Outbound Logistics
- Reverse Logistics
- Green Logistics
- Manufacturing support
- Construction Logistics
- Digital Logistics
- Military Logistics
Some Key Functions of Logistics Management
The procurement and distribution of raw materials or smaller, individual components that eventually get fabricated into a finished product, thus triggering product flows into the rest of the business logistics cycle.
The actual distribution and movements of goods between locations, arranging both inbound and outbound transportation as well as shipping methods, timeframes and any assistance from transportation 3PLs.
Order fulfillment companies provide services ranging from a simple full pallet single SKU shipments to manufacturers and distributors to shipping multiple items to various destinations including pick pack, parcel orders, drop ship orders, e-commerce orders and retailer distribution center orders which require specific compliant requirements.
The storage of goods across the entire supply chain spectrum. Warehousing most often includes the physical infrastructure and operations involved in ready-to-order inventory storage and merchandise returns, streamlined in a comprehensive warehouse management system. Warehousing may require special fixtures such as racking, flow racking, shelving and open space for bulk storage requirements.
Demand forecasting is the result of a predictive analysis to determine what demand will be at a given point in the future. Forecasts are determined with complex algorithms that analyze past trends, historic sales data, and potential events or changes that could be factors in the future.
Inventory management refers to the process of ordering, storing, and organizing a company’s inventory. These include the management of raw materials, components, and finished products, as well as warehousing and processing such items. The main function of inventory management is to determine the proper amount of goods on hand in order to minimize excess stock and costs while at the same time, reduce out of stock items. It’s a balancing act.
Supply Chain Management
Supply Chain Management and Supply Chain Management Strategies involves the active streamlining of a business’s supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.
Benefits of Logistics Management
Logistics Management is within the supply chain. However, due to differing customer requirements, it needs to be continually evolving to deliver excellent results. Customers nowadays may be more likely to impulse shop using a smartphone, and be equally as impatient about receiving their order as quickly as possible.
Businesses with professionally organized logistics can perform within short-time requirements. By choosing an experienced team of professionals, business entrepreneurs can ensure excellent warehousing and delivery of their products to their customers. They can incorporate these services in a way that adds value to their offers, and ensure their products get to the right place on time at the right price.
Improved Customer Service
Consumers demand improved communications, and this mandate creates a need for shippers to provide fast, accurate and quality information. Technology plays a major role in this communication process. Auto emails are becoming common place for customers to see the progress of their order. Tracking numbers may be texted to customers as soon as an order is placed and may be tracked until it is delivered. Good management strategy is aimed to constantly optimize logistics flow processes and eliminate disruptions and redundancy. It has a direct impact on your customers’ satisfaction. Improved customer service can bring a good reputation to a company’s brand and help generate more business and sales. The smoother the processes are within and beyond your company may translate into value for your clients. Ultimately, well-managed logistics contributes to a positive customer’s experience.
Having control over Logistics Management provides a competitive advantage over their competition and leads to increased sales. If you have a positive experience purchasing from a company or store, you will tend to repeat the behavior in the future. If you are operating lean and have reduced the costs within the supply chain, you will be in the position to be more competitive within the markets you serve.
Conversely, if you do not have the logistics management under control you may have late shipments which costs too much. Orders are late, prices are high and customers are not satisfied; This may lead down the road of lost sales and profits.
Managing logistics on a proper level will give a company control over inbound freight, keep inventory at optimal levels, organize the reverse flow of goods, and utilize freight moves on the proper transportation modes – all of which can cut costs significantly.
The FLEX Logistics Team is Here to Help!
Our team understands the importance of getting your products to the market. Therefore we aim to understand your business and build long lasting relationships with you and your team. We are an extension of our customers’ business. Whether you are looking to add a new warehouse to your existing operations, growing and need to increase your distribution efforts, or starting a new company, FLEX has the solutions to meet your supply chain needs.
Contact us today to discuss your current and future warehousing and logistics needs. We will work together with you to understand your requirements and develop a solution that will set you up for future success.