To understand what are logistics goals just read on!
What are logistics and what do we mean when we speak of logistics and how do the aims of logistics impact today's modern businesses? Logistics to many is quite a confusing concept and that is because it is a process rather than a tangible thing we can hold in our hands.
In this article, we will discuss the concept of logistics but more importantly, try to shine some light on what our aim with logistics should be. Ideas are not much use unless you can effectively put them into practice otherwise you could be wasting your time.
As with any concept, an example is probably the best place to start in bringing some clarity to a subject. When people think of logistics they usually imagine a heavy goods vehicle loaded with goods travelling down the motorway and arriving at a loading dock of a warehouse and that's it. This is definitely part of it but it involves so much more than transportation.
Logistics refers to the process of managing the many cycles resources go through from being obtained at source, transported and stored until they reach their destination. Logistics can refer to the complete journey or just a part of it. It includes movement through the network connections between organisations but also the path from goods-in to goods-out that happen underneath one roof.
Let's briefly look at the logistics needed to be able to enjoy a slice of fresh-baked bread. The first thing to point out is that the distribution of bread is one of the biggest challenges logistics professionals can face. Dispatching hundreds of thousands of loaves to many thousands of sales outlets is an absolutely huge undertaking.
Also, consider the fact that peak sales of bread occur twice in a single day. The distribution of bread also involves a massive reverse logistics effort. Many supermarkets buy bread on a sale or return basis and there is also the issue of the returns required for the stacks of crates being sent back to the bakery.
From the farmer ploughing her field through to milling, baking and the packaging phases all the ingredients need to be acquired, transported and stored over several cycles. While many supply chains have to think in terms of weeks or months, the bread supply chain and therefore the logistics involved have to be planned as granularly as days or even hours.
In a nutshell, logistics includes the planning, administration and movement of anything travelling from A to B. Grocery shopping online, click and collect, transportation home and then unloading into the fridge can be classed as logistics just on a tiny scale. But that doesn’t involve everything that took place in order to stock the shelves in the supermarket. Things are collected at point A and end up at point B because of logistics.
What do we need logistics to accomplish?
What are logistics functions meant to accomplish other than the basic movement and handling of goods? For logistics to be effective it needs to be measurable through a system of performance analysis but also be subject to continual improvements. What works today may not be workable next week or next month. Issues could slip through the net making the process less efficient, more expensive and harder to manage.
Take a situation where you change a single supplier. The new supplier may have different lead times, be located in another part of the country or rely on a different form of communication. All these things would require a review of the current logistics operation and undoubtedly require changes to the system.
To outline what are logistics functions and what they are meant to achieve we should highlight the emphasis is on timing, accuracy and reliability. The aim of a logistics strategy is to have the correct resources in the appropriate location and critically at the right time. Reliability ensures that once the plan is in place it will operate efficiently where all stakeholders are on the same page.
Imagine a Mexican wave flowing through a crowd in a stadium, if any section misses their queue the whole thing comes to an abrupt ending and the fun quickly trickles away. Logistics is much like this with everybody in the chain having a part to play if the effect is going to be executed well.
To use another sporting analogy, logistics is like a process of passing a ball from one person to another. Whatever goods or resources are being handled, it's very important that they reach their destination in perfect condition which isn’t going to happen if the ball is dropped. This also plays into the concept of reliability where precise timings are pointless if the delivery is damaged or not fit for use.
Modes of transport and systems of storage must be tailored to the task at hand. This is where much of the complexity is generated. The systems of transportation and storage are so unique and varied that the systems along the supply chain have to adapt to the changing characteristics of any typical resource.
Fresh fish at the docks for example have to be transported and stored in a very different way to a birdseye frozen fish pie. All logistics processors have to account for the many different routes any given resource could take and this is where logistics management is vital.
What are logistics strategic plans in the real world.
The key to maximising what are logistics high priority tasks is being able to match volume and variety to the demand. The success of this objective depends largely on distribution efforts however there are many other factors to consider. Other elements which can affect the distribution could be the weather and also marketing activities.
One effective way of starting the planning process is to hold group workshops which are great to identify problems and issues. Using the group's experiences and anecdotes you are able to focus on real-world problems but also ways in which they were handled. It is then possible to categories the different challenges in order to produce a strategy that mitigates past mistakes.
The first thing to assess throughout these areas is the impact of distribution costs on the company's profitability. You can then create subcategories from the different activities within the distribution function where particular attention can be focused.
The key indicators to look out for are either cost against something or the profitability of something else. Costs could include analysis of providing a service to particular customers or comparing different sales channels. It could also include what costs are related to consolidating orders from different locations but also include general fleet maintenance costs would also be considered.
Profitability could relate to certain customer types but also which distribution channels perform the best. There is also the profitability of your inventory and different stock items to identify which are better value than others.
When planning the aim of logistics along with the logistics strategy being developed, open channels of communication are vital between you and both your customers and suppliers. A clear understanding of their requirements and expectations will help facilitate a smooth operation. Encourage them to tell you what are logistics requirements from their perspective.
So too is leveraging any technology available that exists within this field of activity. Warehouse management systems, Enterprise Resource planning and transport management systems are all tools to be used. Now that cloud services are the mainstream, communication and sharing of data has never been easier. This is especially important with the increased size and complexity of the businesses operating today.
Conclusion
What are logistics professionals focusing on today is a question which has a different answer on whichever day it's asked? Logistics in the future will only become more complex with the growing trend in eCommerce. Warehouse space is getting bigger, the storage systems are now equipped with AI and it's not unusual to have shuttles and satellites performing most of the storage and retrieval from within the pallet racking systems.
Sustainability has also become a major concern as the environmental impact of our consumerism continues to affect the planet. By focusing on efficiency, businesses can have healthier bottom lines while also reducing their carbon footprint.
