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New technologies have a significant influence on operations in logistics. These advancements can bring numerous improvements in tactical areas like shipment tracking and route planning. In this article, we look at concepts in optimization in logistics management.
What is logistics management?
We can define logistics management as the set of actions required to provide, establish, and manage the resources necessary to carry out an activity effectively.
The goal of logistics management is to be more efficient, improving time and lowering costs while maintaining quality.
What is logistics management for?
Actively managing operations is essential for any company. Good logistics management brings companies many benefits, including:
- Reduced costs
- Access to larger markets
- Access to a more diverse market
- Increased competitiveness of the company
- Improved customer satisfaction
- Reduced delays due to compliance issues (i.e correct HS classification)
Logistics management functions in the company
The ultimate purpose or objective of logistics is to improve consumer service. Within a company, the main function of logistics is to deal with managing physical flows of materials and goods. Good logistics management helps the company’s operation by improving the internal functioning and the service given to the customer by improving the collection, transport, distribution, and delivery phase while also reducing the cost involved.
Areas of concern in logistics management:
- Transport. Transport is always a fundamental factor. With a good transport network, you can move the prepared products and distribute, sell or consume them.
- Inventory control. Inventory control helps control and valuate the stocks of companies’ warehouses, knowing the stock available in the company and the companies’ sourcing needs.
- Raw materials. It is necessary to ensure that all raw materials are available at the right time in the right quantity.
Successful management of these areas can reduce transport and storage costs, improving the performance of the company.
To obtain maximum profitability the company’s products must be available at the right time and in the right place.
Another objective of logistics is to meet demand by meeting the best service conditions, cost, and quality. Logistics is responsible for managing to find the means needed to achieve this goal. To do this, it mobilizes the necessary human and financial resources.
Among the objectives that logistics optimization seeks are:
- Cost reduction by taking into account all process costs. For proper logistics management, the logistics managers’ main objective will be to reduce the costs of each process.
- The highest quality in production and distribution.
- Supply of the necessary products, at the right time, in the quantities required, with the quality demanded and at the lowest cost.
- The flexibility to meet market needs at all times.
Optimization of logistics with new technologies
The strong competition in the logistics industry has forced companies specializing in logistics and transport services to introduce new technological tools that allow them to improve to achieve the objectives set and provide excellent service to customers.
We need to bet on technology in all areas of society and much more when it moves a lot of data, manual execution processes, and the need for the best and most complete information in record time to be able to make decisions and not waste time with the outcome of incorrect decisions.
In this transport and logistics sector, the importance of IT integration systems where the customer and supplier data is handled needs to be very clear. Such systems provide traceability, incident management capability, and ease of execution of reverse logistics.
Logistics optimization provides solutions that provide quality in the chain, from the product’s purchase to the receipt of the product.
Constant variables force companies to invest in elements that make them more competitive in line with the market and customer demands.
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