Logistics management is defined as the process of planning, implementing and controlling procedures to ensure that transportation runs effectively and smoothly. It is one of the main areas that needs to be managed efficiently in the supply chain.
Why? Because it looks at how and when a business needs to get material, products and goods from their origin to their final destination.
It is therefore important for businesses to manage the transportation area of the supply chain and have a comprehensive understanding of their logistics management process. Having a strong knowledge of this process will ensure efficiency and cost-effectiveness, ensuring a business’s ability to have a real competitive differentiation.
So, how can companies ensure an effective logistics process?
One of the most important areas a business needs to consider is how it has planned, structured and how it manages its logistics management. A robust foundation needs to be in place which considers how responsive and economical the transportation system is. With this type of process in place, a business is able to look strategically at the system to decrease costs and increase customer satisfaction with little disruption to the supply chain itself.
By having a responsive transportation system it is felt that a business will have a complete end-to-end visibility of its logistics. This visibility will help ensure effectiveness of the logistics process by allowing businesses to centralise operations – therefore lowering costs without having major impacts on customer service levels. And since the whole logistics supply chain can be seen completely, any uncertainty or changes in the system can be monitored and managed as required.
The next important area a business needs to consider is having an effective transportation system. Logistics is a very expensive business outlay, so it is important to drive cost savings while creating value within the supply chain. But how can this be achieved? Mainly through the use of technology. Businesses have more and more sophisticated management tools which can monitor, review and control transportation networks.
Therefore, it can be seen that by having a responsive transportation system coupled with an economic network makes for a unified and effective logistics process.
Supply chain managers need to realise that logistics and the impact of transportation on the supply chain needs to be taken seriously. Many managers view it as just a financial drain on the company with all the associated costs related with transport, pallets and warehouses. They need to remember that there are business tools and technology available to help them manage the complexity of the logistics network and ensure visibility. The whole area of logistics management provides a real opportunity to review, adjust and update the system to ensure continuous operational efficiency and reduce costs.