Necessary Steps for Smarter Logistics Planning Optimization. Increase Efficiency and Profits
Editor's Note: Today's is blog is from Nicole Lewis who shows us the steps for smarter logistics planning optimization.
Ironically, the main problem of today's domestic logistics planning optimization is not in a lack of information about ‘advanced’ tools, lack of appropriate equipment and information technologies, and not even that not all managers are in principle aware of the existence of any management mechanism. However, contemporary business affairs feel an increasing need not only in logistics planning optimization but also in it as a whole procedure mechanism. Moreover, the smartness of the latter increases literally daily. When the main problem reveals itself in the catastrophic shortage of qualified personnel, a fast and unproblematic way up is the efficient logistics that would improve the planning, delivering, loading, storing, packaging etc. So, what are the predominant option in implementing that? Process of learning and continuous improvement in planning and delivering high standards.
Apparently, there are numerous insights that pop up in mind when facing the notion of modern logistics; as well as how to write an annotated bibliography apa style, and what to learn about it.
At this stage, that is, the stage of initial acquaintance with logistics as such, familiar training programs are very relevant. In other words, programs that answer questions of what is logistics, what are its main functions, how and why should it be implemented in the enterprise, and who should do this will be populated more and more in the ways of delivering logistics efficiently. Very effective programs show themselves in which a large number of situational models are included. That is, business games and examples, similar to the real problematic situations, solutions of which are involved in logistics. As practice shows, familiarization training in logistics is very effective in the corporate mode. Firstly, for effective implementation and operation of planning, there is a clear interaction of all parties involved in the process. Secondly, the quality of functions in the company directly affects material flows; therefore, even when employees are not involved in the logistics chain, it is important to understand the essence, plan and tasks of any unit.
If the familiarization course has passed, the internal essence of logistics planning optimization is clear, its functions are involved and work, the next stage of training can become in programs that are more specific. Apart from newly emerging cloud based logistics, further, several examples of effective and useful topics for the development of logistics skills and planning would be highlighted.
Logistics planning optimization, evaluation of results and monitoring
To ensure a real match of the anticipated plan of logistics operations, planned performance and profitability, the company needs a flexible system of monitoring and evaluation of results. In addition to direct analysis of the quality and effectiveness, such systems also contribute to increasing the efficiency of operations, support management efforts aimed at compliance with service standards, fulfilment of profit, work logistics plans and asset management.
Logistic systems of planning, monitoring, and evaluation of results perform three functions: (1) by measuring, auditing and observing they measure performance; (2) compare the results with the planned results; (3) analyse the results of the comparison, and identify problem areas that require correction. At the output, everything listed in the form of the report is provided to management and helps it to solve organizational problems. The more specific and clearly formalized the system of logistics planning optimization, evaluation and control is, the more effectively it works. Under the clarity is to understand the setting of target standards for each type of logistics activities at each stage of the supply chain.
To implement the control system in work, special tools are needed to provide information managers. For ‘advanced’ Western companies, who are called data warehouses, considerable resources are invested in creating and maintaining them at the proper level. The purpose of creating such storage facilities is free access for managers, employees and even consumers to suppliers to the necessary data.
Another point is that in order for the logistics planning optimization, evaluation and control systems to be most useful, they should be combined with the systems for servicing transactions and planning, receiving and processing orders, inventory management and scheduling. Practical use of systems for assessing results and controlling the activities of the supply chain can greatly increase the logistics efficiency of the enterprise.
Evaluation of the organization plan
In order for the functional introduction of logistics to really prove being efficient, it would make sense for the authorities and other person responsible to planning and delivering high standards to be grouped in a single organizational system. It should be understood that the creation of a mature, maximally integrated and large-scale organizational structure is possible only under the condition of a certain level of development of the enterprise itself, and the logistical part of its work. The functions of logistics at this stage should already be grouped into a single instrument, physical distribution, material and technical support of production and procurement; in the outcome, it is supposed to be consolidated into unified management, which, in turn, brings out efficient ways of planning, setting, evaluating, measuring, delivering and improving if indeed needed. Thus, a qualitative assessment of the organizational aspects of the logistic function at the enterprise provides a significant amount of information for a qualitative analysis of the state of the enterprise as a whole, and vice versa.
Information technology makes any process smarter
The speed of the evolution of information technology requires constant updating of the skills of working with them. Logistics is impossible without technology - this is an undeniable fact. Moreover, the flows of goods and services are already beginning to be replaced by information flows. Therefore, it is better for logisticians to match time, so as not to stay away. In particular, it makes sense to pay attention to skills of simple programming of automation systems for some logistical processes, logistical planning, and opportunities for independent training of company employees to work with software of logistics products, etc.
The other important point is the practical implementation of all of the above technologies in the ideally modelled and wholly integrated system that is possible only if the appropriate software is introduced into the work of the enterprise. In the whole world, logisticians use systems like ERP. By and large, the simplest program of this format is a data bank of all the information necessary for conducting operations: suppliers, goods, warehouses, stocks, etc. ERP programs can independently perform some operations as, for example, order necessary goods from suppliers if there is a shortage of certain products in the warehouse at the time of receipt of the relevant request. Therefore, considering the newest possible information technology development, people involved in the sphere of logistics planning optimization, would increase its efficiency in terms of planning and delivering high standards thereof.
External logistics services
As has already been said, there is a serious shortage of qualified personnel in logistics. From this point of view, the idea of developing a new business profile - providing external logistics services for companies that do not yet have their own logistics division - may be interesting. This also needs to be learned.
Ideally, the list of services of a company claiming to be a serious supplier of service logistic services should include the inventory management, transportation, warehouse operations, information support, order processing, cargo consolidation and much more. The company of such a profile is significantly influenced by the external environment and, in particular, the economic situation in the country. Legislative changes in the transport sector and tariff policy are also very important for the enterprises described to plan their agendas. The demand for external logistic services guarantees, first of all, the universal desire to accelerate the turnover of assets. Firms try to increase the productivity of their assets; therefore, they focus on finding ways to reduce capital investments in logistics operations. External companies give them such an opportunity. There is an opinion that a firm that purchases extraneous logistics services expose itself to a significant risk. If the company, which is the service provider, cannot ensure the proper quality of the order, the company-consumer can really suffer considerable damage. This, once again, confirms the fact that it is necessary to learn literate work in the logistics field.
To sum it up and give a piece of comparison that allows you to assess its landed status-quo, only contract warehouses and transport infrastructure are developing less from external logistics services in former CIS states. At large airports and seaports there are warehouses that can be used if necessary. A significant achievement of the development of the external transport infrastructure can be matched via entering the market of piggyback services. In the West, in turn, logistic outsourcing is more than popular in a business environment: it is very expensive to keep warehouses and transport parks, however, working with external suppliers guarantees the quality of operations, less mistakable planning and more efficient delivering of high standards, which is a top-up priority for contemporary customer.