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Logistics management, which involves, among others, the transport of goods, is a very important part of the business to be taken into account by any company.
What is logistics management?
Logistics management consists of integrating the planning, organization, and control of everything related to the production, distribution, compliance and sourcing functions of a company or business. It is the management of all operations that seek to ensure the availability of a certain element (product, service, information) in optimal time and form.
Proper logistics management can give companies the following advantages:
- Cost reduction
- Access capacity to geographically larger markets
- Increased competitiveness of the organization
- Improved customer satisfaction
Logistics management objectives
The work of logistics management is reflected in the performance and benefits of the company. Logistics management has four main objectives:
Logistics management takes into account all costs. When this process is done correctly, the main objective of the process will be to reduce costs while maintaining the quality of the product.
Search for the highest quality in production
Logistics management seeks to refine production processes to achieve higher quality in the result.
Employ effective processes
Quality is achieved thanks to the efficiency of the processes. Logistics management improves processes such as duplicate tasks, excessive bureaucracy, errors, or lack of internal communication.
Create a competitive company
A competitive company is achieved through reduced costs, the pursuit of quality, and a series of continuously improved efficient processes.
The needs and requirements of transportation systems can vary significantly depending on the type of industry, orders, and type of transport you want to make. There are different logistics modalities in relation to the product to be transported, the cost of transport, geographical location or marketing and the type of transport to be used, among other aspects.
It is necessary to differentiate in transport logistics the different means to be used between road, air, sea, railway, or river. Rail is one of the most widely used transports for long distances and although the fixed costs are high (electrical laying, stations, wagon machinery) the companies that use this medium are mainly the companies that extractor raw materials and cars since they need a lot of cargo.
Road transport has several advantages, as it facilitates delivery at the desired destination point. Its cost is somewhat lower, but in some countries, atmospheric pollution is so high that it requires the approval of measures to reduce the use of road transport and the pollution it generates.
Air transport on the other hand is the fastest for long-distance shipping but is the least used for the high costs involved. However, many companies working with perishable products use this route of transport. Finally, we can talk about shipping, often used for chemicals. For all this, it is important to choose the most suitable transport for each case.
Logistics objectives and functions in the transport
The logistics, applied to the transport of any type of good or merchandise has as its last and main objective to achieve better conditions of service in transport reducing the costs of the same and guaranteeing the quality of the service and the products or materials transported or requested by the customer.
To achieve this goal, an attempt is made to apply the following 4 principles:
- Group different types of load and eliminate unnecessary stages of the route. This reduces costs in the logistics and transport chain.
- Avoid unnecessary handling of products such as unpacking or moving them from one box to another, thus keeping the products in the best condition.
- Coupled with the above by avoiding changes in merchandise from one place to another we manage to reduce the costs of handling
- Greater control of stocks, avoiding both accumulating too much product in stock and its lack.
Main functions of logistics and transport
The set of functions that are carried out in the logistics chain will also cover the process from its origin to the final consumer. Two are the main functions of any logistics chain: the planning and management of the flow of raw materials and products. Next to these and depending on each company these maybe some other functions of logistics and transport:
- Production: through the physical and human means of production that are in the process of trying to organize the activities of processing or processing products in the most appropriate possible way.
- Procurement: look for suppliers that, at the lowest possible cost and maintaining the necessary specifications are able to supply the raw materials that are necessary for production at all times.
- Commercial distribution: choose in a suitable way the type of warehouse and means of transport appropriate for each logistics operation; that has the best location, a distribution of the correct spaces, stock management, route optimization…
- After-sales service: this service must ensure customer satisfaction; ensuring receipt of the product by the customer and managing possible complaints and returns of products.
Tips for improving distribution logistics
Through good logistics management, we must optimize the times and resources available to us to reduce costs as well. Therefore we must try to perform in a correct and orderly manner the steps mentioned above. In addition to them, three important tips to keep in mind:
- Analysis. As in any other activity, the analysis of the whole process is paramount. The first thing to do is to analyze the demand. Review sales history to learn more about how they occur on which dates, etc… Through the analysis, we will be able to anticipate stock and supply needs. It should not be a one-off task but a constant thing that takes into account changes in the market and other fields related to the brand.
- Management. We must implement simple and effective management of inventories, orders, and everything related to the distribution of products. At this point, delivery times, means of transport, inventory, packing slips, procedures such as labeling and packaging should be taken into account.
- Control. A number of checkpoints, or otherwise indicators, must be established to know whether the work carried out is on the right track or, on the contrary, measures must be taken to approach the objectives set.
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