From the procurement of raw materials to the distribution of customer orders, supply chain success hinges on efficient, well-managed logistics. For this reason and others, businesses big and small can benefit from a formalised approach to logistics management – but what exactly does this entail? And how can it benefit the broader supply chain?
Here, we’re exploring the world of logistics management, outlining what it is, how it works and the benefits and challenges it presents to businesses. Use the links below to navigate or read on below for the complete guide.
- What is Logistics Management and Why Is It Important?
- What Are the Benefits of Logistics Management?
- What Are the Challenges of Logistics Management?
- What Technology Can Help with Managing Logistics?
Logistics management is a component of supply chain management that is designed to control the flow of goods from business to end user. It encompasses the strategy and techniques a business uses to move goods from point A to point B, with an emphasis on driving efficiency throughout the inventory chain.
Effective logistics management is essential for businesses that move large quantities of stock and rely on a complex, multi-faceted supply chain. In planning, controlling, and facilitating the movement of goods, firms can ensure efficient order fulfilment while maintaining cost-effectiveness across key warehousing and logistics functions.
As an umbrella term, logistics encompasses warehousing, supply, and delivery; essentially, the basic infrastructure associated with supply chain management. Logistics management seeks to improve and enhance both inbound and outbound logistics, with streamlined internal processes and technological innovations to ensure inventory management best practice.
Of course, logistics management looks different depending on the size of a business and the industry it operates in. Multinational corporations may need to oversee a complex logistics chain encompassing air, road, and sea freight, while smaller firms may only need to manage a fleet of local or regional delivery vehicles, including vans and lorries.
Regardless of size or sector, however, effective logistics management offers a range of benefits, which we’ll cover in more detail below.
Logistics management comes down to improvement and enhancement. What can be done to streamline delivery and order fulfilment cycles? How can technology help drive efficiency? And what cost savings can businesses make to boost bottom line profitability?
Let’s take a look at the key benefits effective logistics management can bring to an organisation.
- Faster order fulfilment times – customers, whether B2C or B2B, demand more from suppliers than ever before, including rapid transit times and efficient order fulfilment. Logistics management helps businesses enhance their delivery cycle, ensuring they remain agile and efficient in an increasingly competitive market space.
- Transparent inventory chain – transparency is key to efficient inventory management, with managers across the business able to see exactly where stock is and when. Formalising logistics management helps to bring clarity to the full inventory chain, from the procurement of raw materials to delivery to the end user.
- Efficient and affordable delivery scheduling – while customers demand rapid delivery times, businesses still need to ensure profitability in this area of their supply ecosystem. Logistics management allows for cost-effective delivery scheduling, helping fleet managers to meet both customer and business requirements.
- Accurate stock management and warehousing – the accuracy of stock management is critical to timely order fulfilment and cost-effective workflows. By investing in technology to support logistics management, businesses can benefit from accurate stock control that guarantees profitability and efficiency.
- Simpler importation and export – importing and exporting goods is a complex undertaking and getting it wrong risks delayed delivery times and unhappy customers. A logistics management strategy sets out an import/export process, helping a business sidestep regulatory and compliance issues and convey goods more efficiently.
- Environmental and ecological control – increasingly, customers want to buy from businesses with an ethical approach and perceivable green credentials. Logistics management can help to boost an operation’s environmental standing, with greener deliveries and less chance of wastage across the supply chain.
- Faster and more effective employee onboarding – from delivery drivers to warehousing staff, a clear and well-defined logistics management strategy can ease the onboarding process, helping employees get up to speed with internal processes more quickly – for greater value and control.
Like any business management strategy, logistics management isn’t without its challenges, and businesses will need to account for these if they’re to make a success of managing their logistics chain.
Here, we list the top-line, non-industry-specific challenges businesses face when it comes to logistics management.
- Evolving customer requirements and demands – as touched on previously, customer demands are growing, placing significant strain on businesses to speed up delivery times while maintaining their bottom line.
- New competition to the market – no industry is immune to disruption from new players in the market. Rival firms pose a risk to logistics and supply, so it’s important to factor this into contingency planning and business continuity.
- Changing regulations and compliance needs – the logistics arena is open to evolving legislation and compliance requirements, so businesses must stay abreast of changing regs and best practice.
- Fuel and fleet maintenance costs – managing a fleet of vehicles is an expensive undertaking, with fuel and maintenance costs to consider as rolling overheads. If possible, price up third-party couriers, as this may work out cheaper than assembling your own distribution fleet.
- Personnel shortage, training and retention – warehouse jobs and delivery driver roles typically have short retention rates, so training and onboarding new staff can become a significant drain on resources. Effective HR can ease such pressure, but this alone requires significant investment in the right personnel and management technology.
Effective logistics management requires consistent investment in the latest inventory management technology. But which platforms and tools are recommended for managing logistics and supply?
Here, we list the recommended technology that can support logistics management.
- ERP software – a modern ERP system is the ultimate platform for logistics management. Unifying business functions, it provides a do-all system for multiple logistics processes, including accurate stock tracking and warehousing, and intuitive delivery and shipping functionality. Such systems can also integrate with the below technology, with modular enhancements for a bespoke logistics interface.
- Batch tracking – supported by ERP, batch tracking is a powerful means of grouping inventory throughout the supply chain. Aiding order fulfilment and efficient warehousing, it’s an essential tool for businesses looking for strong control over their stored and in-transit assets.
- Multi-site warehousing platform – many businesses hoping to leverage logistics management have multiple warehouses and distribution centres, so a multi-site solution is critical for control and visibility. Bespoke ERP systems offer such capabilities, allowing for total transparency across multiple warehousing operations.
- Blockchain – blockchain has emerged as a powerful means of ensuring complete transparency throughout a complex supply chain. The technology simplifies the process of overseeing multiple transactions and order flows, so it’s great for businesses juggling complex distribution, ordering and shipping activity.
- AI – artificial intelligence has a significant part to play in the future of logistics management, so adopting the technology now could prove a wise long-term investment. AI can be leveraged for a range of logistics-related tasks, from simplifying order picking to planning routes for the most efficient and cost-effective delivery cycles.
So, there you have it, our in-depth guide to effective logistics management. Whatever the industry, if your business needs help managing its distribution and supply chain, our expert ERP consultants can recommend the appropriate platforms and solutions for the job. For more information or to speak to a member of our team, visit the homepage or call us today on 0161 503 0866.