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Many are unaware of the great impact that logistics management can have on the outcome of a company. In businesses that work with merchandise, logistics accounts for almost a third of the total expenses of the company.
If SMEs were to pay more attention to logistics, they would be able to improve their processes by up to 15%. Therefore, in order to be competitive and obtain the maximum benefits, we will have to control such important aspects as storage, transport and shipments. Logistics thus becomes an essential pillar of the proper development of any business.
In this article we want to unveil some important tips for an effective Logistics Management and how it will help you achieve cost reduction, increased productivity or more efficient processes. Keep reading…
Logistic Management: Definition
When we think of logistics as such, we must bear in mind that it involves numerous aspects in the company and in the supply chain.
Some of them are:
- Management and communication with suppliers
- Stock, Inventory and Delivery management with software like OnTime360
- Transport (both internal and external)
- Storage and handling of the material
- Network design or logistical networks of the company
- Planning and organization of supply and demand
And, indirectly, it also has a very important influence on other areas such as:
- Customer Support
- production planning
- assembly or packaging of the products
Taking into account the great importance of logistics processes within a company, it is vital to have a good logistics management system. Thus, we could say that logistics management is that task that integrates the planning, organization and control of everything related to the production, distribution and supply departments.
5 Basic Key Points
Thus, we can say that logistics management works on 5 basic key points:
- Customer Service
- Inventory and stocks
- Distribution and transport
Organization and Communication
it is very important that you know and describe the whole operation of the logistic process in an exact way. For this you must relate to all the links on the company, which will help you to better understand the strengths and weaknesses of the logistics chain and you can establish a logistic scheme for all the processes that require it. This is especially relevant when we work with products that need traceability of the cold chain (medicines or food products) or the safety of certain hazardous products.
Describe your logistics process and make sure that the entire organization knows its involvement in it. This will help you better plan your work and improve the efficiency of all processes.
New Technologies and Stock
“How much” should be the most frequent question.
Keeping an exhaustive control of the inventory is essential to know the stock and manage the stocks well, which will allow you to anticipate the problems and detect possible crisis situations. In addition, if you have the possibility, introduce new technologies throughout the supply chain that allows the management of warehouses and transport, to make decisions much more accurate and effective and often in real time.
We must try to make a gradual growth to avoid that the demand exceeds the offer and we are able to serve the product. But reality often exceeds fiction. Therefore, you need data to control growth. Especially those that allow you to feed back the system and improve processes, allowing you to respond more efficiently to the needs of your customers.
The rotation of inventories and the cost of goods sold are some of the indicators that you should hold responsible for logistics of your company.
Create a chart of indicators to facilitate management and decision-making.
Transport and Shipping Management
knowing on which days the distribution of goods is more economical can help reduce costs. You must study what possibilities your transport company offers you as well as your competition: groupage (the same load for several companies) or crossdocking (daily distribution of merchandise) can be a value that makes the difference to your customers compared to your competitors.
These tips will allow you to make logistics processes easier, saving costs and optimizing resources for your company.
Objectives of Logistics Management
Good logistic management directly impacts the performance and benefits of the company.
Good logistics management takes into account all costs. If this management is carried out correctly, those in charge of it will have as main objective to reduce costs, always without losing the desire to maintain or increase the quality of the product, of course.
Search for the highest quality in production
As we said, the reduction of costs should not influence at all in the quality of the product or service. In fact, the logistics management seeks to perfect the production processes to achieve a higher quality in the result.
Use effective processes
This quality will also be achieved through the effectiveness of the processes. Tasks that are duplicated, an excess of bureaucracy, errors or lack of internal communication … All these aspects make the processes get stuck: the logistics management seeks to improve these processes.
Get a competitive company
Thanks to costs reduction, the search for quality and a series of efficient processes, your company will be more competitive and has a reputation in its market.
Now you know the key points of logistics management. Will you invest more resources to achieve better logistics management in your company? Tell us!