Table of Contents
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 refers to the handling 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
Generally speaking, logistics management can be said to have four main objectives:
Cost reduction: Logistics management must take into account all operating costs. Logistics managers should always try to reduce costs.
Quality: Logistics managers should seek to refine production processes to achieve higher quality.
Process efficiency: 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.
A competitive company is achieved through reduced costs, the pursuit of quality, and a series of continuously improved efficient processes.
The required transportation mode can vary significantly depending on the type of industry.
- Rail is widely used for transport across long distances over land.
- Air transport on the other hand is the fastest for long-distance shipping but there are high costs involved. Many companies dealing with perishable products use this route of transport.
- Ocean transport is good for companies shipping on fixed or non-urgent schedules.
Many companies use a mix of different modes.
Logistics objectives and functions in the transport
The objective of transportation management is to ensure that products are delivered in good quality, at the lowest possible cost, and on time.
Being on-time does not equate to being delivered as fast as possible.
To achieve this goal, logistics managers can consider the following:
- Group different types of load and eliminate unnecessary stages along a route. This will reduce 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.
Main functions of logistics and transport
The set of functions that are carried out in the logistics chain will also cover all the processes from its origin to the final consumer.
There are 2 main functions of any logistics chain:
- The planning and management of the flow of raw materials and
- The planning and management of the flow of products.
Additional tips for improving logistics management
Good logistics management practices include optimizing the opportunities to reduce costs and improve efficiency. In conclusion,
- Analysis: The first thing that needs to be analyzed, is the demand for the finished goods. Using this data, managers will be able to anticipate product flow requirements in the future. This should not be a one-off task but a continuous activity.
- Management: Simple and effective management of inventories, orders, and everything related to the distribution of products must be the underlying objective in any logistics management program. Delivery times, means of transport, inventory, packing slips, procedures such as labeling and packaging should be taken into account when designing the program.
- Controls & Measures: A number of checkpoints, or otherwise indicators, must be established to know whether the work carried out is on the right track and happening within tolerances.
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