It is common to have logistics and supply chain be compared and treated like they are interchangeable. They are not the same, but logistics is a component of the overall supply chain. Logistics is the element of supply chain that moves goods from one place (point A) to another (point B). Logistics has 2 main functions that it takes care of, transportation and warehousing. The overall supply chain is a group of businesses and organizations all working on different processes, including logistics, to create and send products.
Logistics Management
Now that you know a little more about logistics, lets talk about how best to manage your logistics. When managing logistics, you are managing a collection of process that you need to do in order to move goods either internally or from seller to buyer.
Having a good management process can make a stark difference in your business. Having a good system to pick shipping providers and packaging options carefully and thoughtfully will save you so much time and money. Also having a good understanding of warehousing and what best suits your business will help you save money as well as keep your inventory under control. This will make sure your customers are happy and satisfied with they product and shipping time.
Having software for your logistics management can help you know and understand the data that can make your logistics process smooth and seamless. The best practices for all the logistics of your company really depends on the nature of your business and products. But no matter what your business is, the logistics of it all will always be complex. Automating as much as possible is key to having the best efficiency possible.
One viable way to automate everything is by hiring a third-party logistics (3PL) service provider. The 3PL can take care of the entire logistics process if you want it to. They will provide you with the same data but will also help you decipher what the data means and what needs to be done in order to have your logistics process run as smoothly as possible. They will also provide warehouse space to keep your inventory safe and accounted for.
Business and Management Logistics
Business Logistics is a set of processes involving the movement of goods both from the supplier to the business and from the business to the customers. It does all of this by managing those processes as a unified system.
Logistics management systems are put into place to help those efforts be productive and do what they need to. Logistics management includes many different management processes to ensure the best system to create the best results. It covers inbound and outbound transportation management, fleet management, warehouse management, order processing, inventory control, supply and demand forecasting, and managing (if applicable) the 3PL service providers.
Importance of Logistics
The logistics process is necessary to any product-based business. Yes, it centers around the movement of goods, but it effects much more than just that. Having successful logistics is shown in lower costs, higher production rates, better inventory control, higher efficiency, smarter use of warehouse space, higher increase in customer and supplier satisfaction, and an all-around better experience for your customers.
The Role of Logistics
The reason we have businesses is to exchange goods or services for money or trade. The role of logistics is to be the path that those services or goods can take to complete the transaction. Some of the most important aspects to consider having the most effective logistics possible are simple but necessary.
Material Sourcing
This is not only finding the right materials for the cheapest cost. This is making sure that the movement of these materials are done as quickly and cheap as possible, keeping an eye on backorder delays, competitor priority rankings and lockouts, add-on services costs, extraneous fees, increasing shipment costs due to distance or regulatory environments, and warehousing costs. Making sure to find the right materials to create the best products as well as the best customer experience while keeping it at the lowest cost possible can make or break your business.
Transportation
The very reason for logistics is to transport goods from Point A to Point B. You will need to find the best most of shipment for your business. Things like air or land, and which carrier you would want to work with based off their shipping rates. Sometimes its better to know and compare the rates of each carrier to ensure the better price every time verses always using the same carrier. If you are shipping globally you need to make sure the shipper is up to speed on customs, tariffs, compliance, and any relevant regulations. The person in charge of transportation needs to document and track shipments, manage billing and report how everything is going using dashboards and analytics.
Order Fulfillment
To complete orders, items need to be picked, packed, and labeled properly to then be shipped to the customers. There are five steps to order fulfillment. Sources of incoming goods, receiving, storage, processing, and shipping are all a part of the order fulfillment process. These processes all are a part of order fulfillment and are the main part of the logistics sequence to distribute goods to customers.
Warehousing
When working on planning your logistics, noticing what you would need your storage to consist of is very important to plan the warehousing for your products. Short- or long-term storage are very common but its not just about how long they will be stored. Warehouse management systems can help make sure you have everything you need for your logistics. Things like if there is cold storage, docking facilities and is close to modes of transportation like rail lines or shipyards.
Making sure your warehouse is organized is very important as well. Making sure that the items that are needing to go out first are closer to the front of the warehouse, while other products can be closer to the back. And for perishables, make sure to follow FIFO (first in, first out).
Inventory Management and Demand Forecasting
When you utilize your inventory management to predict what your sales will look like and be prepared with the right inventory numbers. As you look back on your sales at curtain times, you will be able to understand, at least a little bit, the inventory numbers and what you will need for the future. Being about to understand and interpret that data will help you be able to be prepared for what is to come without over stocking or under stocking.
Logistics vs Supply Chain Management
Logistics are all about the movement of goods from the perspective of one company. This includes all the materials and goods one company receives and manages in the company as well as when those goods are moved to the customer.
Supply Chain is a group of companies involved sequentially in the process of producing and distributing goods or services. Technically logistics is a part of supply chain. They are not the same, but they are very much connected. Logistics is usually done by one company while supply chain is executed by multiple companies. The logistics company is one of the multiple companies within the supply chain.
Getting Started with Business Logistics
When getting started with your business logistics, there are a few things you want to keep in mind. You want to make sure your spatial management is taken care of. You need to know how much space you need and what all that entails for the space to run effectively. Along with that you want to make sure you have management and staffing figured out. If you don’t need any employees right away, that’s fine. Just try to prep for the time that it will be coming. You also want to make sure you have all the equipment you need in order to create a space of efficiency and speed. And last making sure your IT infrastructure is optimized to accommodate functions from online ordering to warehouse automation.
One last thing to keep in mind is that you don’t always have to do things on your own. Lets say you run out of space and hand to help the logistics process. You can always hire a 3PL to assist you with the fulfillment of your orders and do it effectively. That’s where Launch Fulfillment comes in. If you have any questions about logistics, fulfillment, or hiring us to be your 3PL, be sure to contact us and we can set up a meeting to go over details.