Logistics Operations: How to Optimize Your Supply Chain Management

IMPORTANCE OF LOGISTICS

You buy a Chinese watch that is made in China, and it is delivered to your doorstep in a few days. Perishable items, including seafood, travel from one country to another within a day. All this is possible because of supply chain logistics.

Hello, I am Rashid and in this blog, I will tell you about the importance of logistics.

Definition of Logistics:

The entire process of moving materials and products into, within, and out of the company is called logistics. From the point of view of the supply chain, the meaning of logistics is very broad. Logistics control and handle the forward and well as reverse movement of goods and materials. Logistics provides the service of storage for products and materials from their origin to their final destination. Matching supply and demand is the goal of every company. No matter how big the company is and how big the name is.

Logistics is an important aspect of the supply chain process that plans and controls the efficient flow and storage of goods and services and related information from origin to destination.

Logistics Operations

Objectives of Logistics:

The objective of logistics incorporates efforts to manage the physical distribution of goods and materials and the management of resources to improve customer satisfaction at minimum cost. The customer always wants the product to be delivered to him as per his expectations. Therefore, a large part of the customer's satisfaction depends on logistics. Hence, logistics is a function throughout the supply chain that works seamlessly all the time. Supply chain partners can gain a competitive advantage over their competitors by modernizing and improving their logistics operations.

Supply Chain Logistics

The following are the other objectives of logistics.

·      Respond quickly to changes in the market or customer orders.

·      Minimizing the variances in logistics services.

·      Minimizing inventory to save cost.

·      Supporting the product life cycle as well as handling reverse logistics.

·      To maintain high quality.

Functions of Logistics: Roles of Logistics in the Supply Chain

S#.	Function of Logistics
1	Transportation
2	Warehousing
3	Inventory Management
4	Packaging
5	Import / Export
6	Materials Handling
7	Logistics Information System

Logistics Tactics:

Coordinating Functions:

Before the advent of modern logistics, each department worked independently. Each department had its own strategy. Unless the policies are coordinated, the performance of one department may have a negative effect on other departments. For example, locating warehouses in rural areas saves money, but on the other hand, it makes the delivery of goods difficult. That is why departments are interdependent on logistics.

Logistics Tactics

Integrating the Supply chain:

When designing a logistics network, the following considerations are taken into account.

·      Find the country where your forward and reverse logistics can work effectively (infrastructure, regulations, taxes, and labor).

·      Develop an effective import-export strategy.

·      Define the optimal number of warehouses.

·      In order to connect supply chain partners efficiently, define the mixed transportation modes.

·      Select the right number of supply chain partners, a few companies, and a freight forwarder.

·      Reduce inventory costs by developing a good information system.

Having information instead of inventory:

·        Physical inventory can be converted into information in the following ways:

·        By improving communication between supply chain partners.

·        Tracking inventory in accurate ways with the help of technology, i.e. bar codes / RFID.

·        Keeping inventory in transit saves inventory storage costs.

·        Delaying the assembly of the product until the final order is received will be possible with a postponement center.

·        Customs process should be made faster.

·        Mix shipments to meet customer needs.

Minimizing supply chain partners: 

·        Working with fewer partners increases efficiency. The more partners the supply chain has, the more difficult and expensive it will be to manage.

·        Reducing partners also reduces cycle time and operating costs.

Risks Pooling:

·        The technique of managing inventory risk is called risk pooling.

·        Reducing the risk of stock outs by consolidating stock in a central warehouse, increasing lead-time and transportation costs.

Conclusion:

In conclusion, supply chain logistics plays a vital role in the accomplishment and effectiveness of industries. Effective logistics management contributes to increased customer satisfaction, reduced costs, and improved overall operating performance. It includes a complex linkage of actions that enable the continuous movement of goods and information from the point of source to the end consumer. The main purposes of logistics, comprising transportation, warehousing, inventory management, and information coordination, are vital for safeguarding that goods deliver their destination in a well-timed and cost-effective manner. It includes strategic decision-making, risk management, and continuous improvement.

Frequently asked questions (FAQs) about Supply Chain Logistics:

Q.1. What are the main components of supply chain logistics?

Following are the key components of supply chain logistics and each factor play a significant part in guaranteeing the timely and effective movement of goods throughout the entire supply chain network.

·         Transportation,

·         Warehousing,

·         Inventory management,

·         Order fulfillment,

·         Information systems. 

Q.2. How technology affects Supply Chain Logistics.

Technology has a substantial effect on supply chain logistics by empowering automation, real-time tracking, and data analytics. Innovative technologies, such as RFID and GPS improve visibility, efficiency, and accuracy in logistics operations.

Q.3. What challenges do businesses face in Supply Chain Logistics?

Among the challenges are fluctuations in demand, supply chain disruptions, rising transportation costs and the need for sustainability. Adaptive management encompasses strategic planning and flexibility in operations to meet these challenges.

Q.4. How companies can improve their logistics performance.

Businesses can increase logistics performance by capitalizing in technology, fulfilling lean timelines, optimizing transportation routes, sustaining inventory levels, and encouragement collaboration with suppliers and supply chain partners.