Monthly Archives: January 2017

A Rundown On Logistics

Two of the most important sectors that help move a country’s economy are logistics and transportation. Both are important cogs in the wheels of economy since they help bring in and distribute goods and materials. For example, if there is shortage of wheat and rice in Malaysia or Vietnam, other South Asian nations can help in providing supplies to satisfy the need.

Logistics and transportation are two words closely related to each other. As a matter of fact, with the example given previously, both processes are done hand in hand. But the question is can one really survive without the other? Or is there no absolute difference between the two and that both logistics and transportation are referring to the same entity?

Transportation refers to the means of distributing goods, supplies, resources, information, people, and energy from the original point to the destination point using any of the five modes of transport: animal-drive, air, road, rail, and water, or a combination thereof. Since transportation is concerned only with moving the supplies, someone has to take care of handing, packaging, managing the time the goods are fetched and delivered, and maintaining coordination, especially when inter-modal or a combination of two or more transport modes is used. That’s when logistics comes in.

Logistics is defined as the process of managing goods, supplies, resources, information, people, and even energy from the source to the user. Any country can testify how important logistics is for its health. Logistics is not just a company that gets your airmails delivered promptly. Logistics is found in every department of a government, from the military to health agency, from education to infrastructure agency, and of course, the time-conscious world of commerce. This application of logistics is more popularly known as business logistics.

Business logistics, unlike military logistics where the concern is focused more on speed and quantity, is more concentrated on delivering the exact item, at the ideal time and place, at an ideal price, using an efficient amount of energy, man power, and financial resource. It is the business of most couriers in the world.

While most couriers have their own vehicles, such as air planes, ocean jets, trucks, and ferries, it is not really necessary for business logisticians to have their own means of transportation. In cases like this, trucking or shipping service providers are hired to distribute the commodities.

For example, in sending goods to a country where air travel is not available, the courier gets the services of a shipping company, and additionally, a trucker to help in delivering the goods once the ship has arrived. The courier has the responsibility to choose which ship and truck provides the fastest yet efficient handling of the supplies. A courier might also need a place of storage or a warehouse company, especially when there is a need to stock the goods while waiting for the trucker. Most shipping companies, however, do have their own warehouses.

Between Logistics And Modern Business

A lot of different associations throughout the world have put up logistics measures. These companies found these indicators may actually guarantee efficient and timelier assistance. Relating to recognize the reason why logistics are really essential to businesses, they happen to be significantly crucial in a retail suppliers. Producing and also purchasing of products almost all be based upon well timed delivery of the elements of the complete program.

The reason why logistics are only much important for an industry? Logistics relates to several programs linked to each supply chain and supply chain may be public or private. For supply chain, logistics specifically checks strategizing, execution associated with services and supplies on the point of basis to the point of end point. Business logistics work to offer either the inbound logistics and / or outbound logistics. A qualified logistician might control various products administration procedures, travelling, shopping, warehouse, and so on.

You need to understand the fact that logistics of one line of enterprise is going to be different via various styles of organizations. Certainly no logistics department is really the exact. It is true perhaps for organizations of common quality.

To find the consequence with global logistics, it is helpful to think about below list:

• Logistics is critical for any firm’s option and also emergency.
• Logistics is absolutely extremely well defined by end users as well as as via analysts.
• Logistics has not been regarded as a job choice.
• Logistics works to a universal position. For so many international companies, the logistics unit has grown just like an armed excavation subject having barriers in all places you might move.

Logistics isn’t only in regard to organizing organization as well as resource organization, but it is equally about precisely how firms go about their period and what change it has on the rest of us.

Significance of logistics has risen because of the following trends:

• Manufacturing output has reached the best stage
• Improving IT trends
• Increased travelling costs
• Great improvements on inventory attitude
• Greater utilization of pcs
• Enhancing capacity of suppliers
• Declination with industrial regulations
• Globalization
• Spreading from manufacturer product line
• Common adaptations around commodity philosophy
• Highly innovative logistics functions

Efficiency in Life Science Logistics

Transportation is key in determining the efficiency of life science logistics, which involves the movement of products, goods and materials. There has been much progress in terms of the management principles and techniques that serve as the foundation of logistics systems. The proper use of management principles facilitates improvements in delivery speed, load movement, operation costs, service quality, facilities usage and saving energy.
The Role of Logistics
Logistics incorporates processes which move and handle materials and goods, starting at production, through the sales process through to customer satisfaction. The Life Science process also includes the point of waste disposal. The most effective logistics systems aid in adding business and facilitating competitiveness.
Transportation and Logistics
Logistics systems require well developed transportation processes to function properly. Without transportation, logistics cannot perform adequately. Great transport systems for Life Science logistics provide a higher degree of efficiency through reduced operational costs, and by promoting service quality. Both private and public sectors need to contribute for improved transportation systems. Well operated logistics processes can increase the competitiveness of any form of enterprise.
Increased Logistics Efficiency
Increased logistics efficiency involves anticipating how customer requirements evolve and then acquiring the funding, information, materials, technologies and staff necessary to meet the needs of customers. An improved transportation system is essential to customer fulfillment, through optimized goods and services production processes.
Transportation Costs and Logistics
The most important economic factor in business logistics processes is the transport system. This is because it is estimated that approximately one to two thirds of logistics enterprise expenses are spent in connection with transportation. At times, objective market restrictions may need to be addressed with regard to transportation costs. When life science logistics adjusts transportation costs, the system becomes more efficient, thereby also increasing production delivery.
Influence of Transport on Logistics
Transportation is a key component of all logistics activities. Therefore, transport methods greatly influence production processes and sales systems. The value of transportation will vary according to each industry. For example, small volume products that are high value and yet low weight, will have lessened transportation costs. Larger, heavier, lower valued products will incur a much larger part of the production budget, with increased transportation costs. These are factors that need to be considered when evaluating sales and profits. When transportation is more efficient, it generally costs less, increasing the bottom line for any enterprise.

The Benefit of Using a Procurement Company With Logistics

Procurement is the process of identifying and obtaining goods and services. It includes sourcing, purchasing and covers all activities from identifying potential suppliers through to delivery from supplier to the users or beneficiary. Procurement is a key activity in the supply chain management.

Logistics staff participation in assessments provides logistics information and data that supports program/response implementation. All major enterprise resource planning (ERP) software vendors like Oracle and SAP provide products around logistics and transport management. Configuration and deployment of these products requires in-depth knowledge of the industry, local and international freight policies, and foundational knowledge of the company strategy. The overall cost of logistics plays an important part in product pricing. The organization is then able to plan ahead for the provision of the goods and services. Hence, logistics is the cornerstone of companies which produce physical goods. Logistics also plays a vital role in military operations. Logistics deficiencies can cause severe problems to the company’s bottom line.

Many companies have been touted to lose their market position owing to competitors having better logistics management. Ecommerce vendors like Amazon and eBay rely on state of art logistics to keep ahead of the marketplace. Success of companies is not only a factor of how well they do their core-business (like produce a certain product) but also how well they outsource non-core parts of their business to third parties.

Given the complexity of logistics and transportation, this is a key area for outsourcing. Experienced companies know to work with one-stop shops to define key service level agreements around supply chain and then leave it to the experts to work through the complexity as a black box. This allows the company to focus on where it matters, their core business. Logistics companies provide myriad benefits (over attempting an in-house model):

  • Logistics automation
  • Procurement services
  • International network
  • Shipping and freight services
  • Industry experience and Volume discounts

Logistics Automation deals with reducing labor overhead by incorporating smart machinery, advanced software and progressive tools and technologies. As added benefits, automation also reduces energy and material wastage, improves quality and accuracy. By using warehousing advancements like RFID, automated placement and storage, software based inventory tracking, companies provide peace of mind with significant cost advantage (that comes with co-location of your products).

Procurement services can range from advisory on raw material procurement to rate management. Companies with both direct (raw material) procurement and indirect procurement (repair and maintenance materials). They help arrive at a sweet spot between quantity and frequency while providing industry specific value. It is commonplace knowledge that seemingly disparate industries use similar material and machinery. For instance, a manufacturing plant requires safety and medical supplies, whereas, a hospital requires general maintenance products. Using one stop shops allow one to take advantage of the wide range of materials in their purview.

Shakespeare’s ‘all the world is a stage’ very well applies for the current business models with free trade acts between countries being commonplace. The ability to supply to remote countries, while not needing to deal with disambiguation of policy, currency and language nuances is key to international success. One stop shops have all the international network and connections to advise and execute your international shipping endeavors.

The aim of transport is to physically move supplies in a reliable and safe manner, on time, cost effectively and efficiently to its destination. Even if an organization owns its vehicles, there may well be occasions when a need arises for additional capacity, to meet peak activity or other short term needs. This can be met by the use of vehicles supplied by a commercial transport provider (third party). Also tapping into the third party shipping and freight service is advantageous to the company because:

  • of the variable loads and journeys can be catered for
  • the hauler may be able to offer a more cost-effective and a more efficient service
  • the responsibility for administration of vehicles and drivers is no longer the responsibility of the organization (thus allowing staff to concentrate on more productive areas)
  • there is no requirement for capital to be invested in transport

Many online logistics companies provide consulting services whereby the clients can overcome their challenges that they face while trading goods. Industry experts well versed with policies and regulations, audit (like SAS70) and compliance requirements (for example dangerous and inflammable materials), dynamic factors (like weather, socio-political events) and supplier strengths (like volume discounts and geographical coverage) are consulted and the business organizations can formulate their own time and cost efficient logistical time table while optimizing their budget at the same time.

Reap The Benefits Of Logistics

It is important to know the processes that a company is involved in and master them for a more efficient production output. Logistics management, on the other hand, is a critical component to achieve business goals. This is defined as the organized movement of materials, and sometimes, people. The term logistics was originally associated with the military. Eventually, the term has gradually spread to cover business activities and processes. In terms of transportation, for example, this is a vital cost-containment key that one should consider. If a company is working with carriers and couriers, the products should be transported in a timely, safe and efficient manner, thereby managing company costs. There are certain companies and establishments who offer logistics management services. If you want your company to run in a timely and efficient manner, you have to choose a company who provides logistics management services and make sure that they can meet your business’ transportation needs. You must coordinate and tie together your firm’s logistics system. It is good to consider the five elements or functions of logistics and how important they are to your company.

Business logistics is a series of separate activities or functions which all fall under a business firm’s logistics umbrella.

– customer service

– demand forecasting

– documentation flow

– inter-plant movements

– inventory management

– order processing

– packaging

– parts and service support

– plant and warehouse site selection

– production scheduling purchasing returned products

1. Supply

Consider the supply of materials that you have as this would help meet your self-imposed quota for the company to profit.

2. Transportation

This is where logistics management applies. A company should have the transportation services needed to move the products and deliver them in a timely and efficient manner to the customers.

3. Facilities

Different companies employ different services according to their needs. Each of them has a different facility which helps produce the products and services which they eventually offer to customers. These facilities should be tailor-made and fit the client’s and customer’s specifications.

4. Services

From customer service, to delivering an order on time, to resolving order-related problems, a company should employ a logistics management service provider which will provide all of these services.

5. Management and Administration

This is an aspect of logistics management which is common to all organizations. A well-balanced and knowledgeable staff and leaders make for a better, service-oriented company. In relation to this, here are the important factors that you should consider when employing a logistics management service provider that will best benefit your company:

6. Inbound Transportation

– You should choose a logistics management service provider who will give out quotes for the inbound transportation costs of components

– This might include the delivery of individual components to your production line

– For a better price comparison, you may also ask if they can deal with clients who buy some or all of their components from a particular supplier

– You can look for cost and time frame quotations that you can use to consider the service provider that is most cost-effective

7. Outbound Transportation

Outbound transportation refers to the carriers who meet the customer’s needs. Different clients need various freight and carrier services, and a logistics management service provider should be able to provide these individual needs. The deal can either be on an over-all operational basis, or on a per-shipment basis. This provides a comprehensive solution for a company’s primary need for logistics. Choose a logistics management service provider who will provide rate comparisons from different couriers to meet and handle the customer’s goals. The main point here is that you need to have somebody to handle and ship out your main products in a safe and timely manner.

8. Troubleshooting Capabilities

A logistics management service provider should know how to handle unusual and day-to-day complications and problems. If a customer has a specific shipping need, would they be able to deliver and solve the problem? Should a serious delivery or shipping problem arise, they should be able to troubleshoot and come up with the perfect solution and at the same time soothe a customer’s ruffled feathers.

9. Keeping Customers Informed

The customers have the right to know the details about a particular order shipment. They should be informed of when the products were shipped, how it was shipped and who shipped it. Some logistics management service provider give out their contact numbers directly to their client’s customers. This would avoid a pointing of fingers should problems arise. Also, there is online tracking information available for most couriers and carriers. All in all, you have to choose a logistics management service provider that would fit your company’s needs to a tee so that both of you will reap the benefits in the end.