Role of Dedicated Vehicles in Logistics

The importance of effective logistics management does not need any justification in today’s times. Top management in each organization very well understands the changes a slight variation in logistics operations can bring to the top-line and the bottom-line. With such an important role to play in business, logistics team also owns the responsibility to deliver the deliverables as required. This, in turn leads to generation of innovative ideas and their implementation in logistics field to improve the business results.

One of the typical and lesser known applications is that of reverse logistics. It stands for the operations related to reuse of products and materials. In normal course, logistics brings materials towards the customer. However, reverse logistics picks up the material from the final destination for delivery at a place normally sending the consignment. Reverse logistics plays a pivotal role in the organizations dealing with remanufacturing or reconditioning operations.

The basic raw material for remanufacturing operations lies in form of old aggregates across the entire span of end customers, or channel partners appointed by the organization to transact with customers. These old aggregates are received during the sale process which exchanges old aggregate available with customers by reconditioned aggregates. The customer, in addition to the old aggregate has to pay an additional price for the exchange.

Reconditioning cycle begins with the pick up of old aggregates from sources specified by the organization in its business process. As mentioned earlier, these old aggregates serve as the vital raw material for initiating the reconditioning process. Moreover, usually product range reconditioned by organizations contains more than one model. Generally, the reconditioning process goes on an apple for an apple model; which implies that the model of reconditioned product shall be same as that of old product received. Thus, in order to meet production requirement, sufficient number of old aggregates of each model must be available for reconditioning in addition to normal new components being used in production.

The amount of effort and expertise required to pick up material from different locations (and that too where you are dependent to a very great extent on different agencies which may not be in your complete control) and bring back to plant is very different to the process of despatch of aggregates from plant or warehouse based on orders. More so when this single step serves as the trigger to start the production line, which in turn can initiate despatches, and ultimately, the sale. Everything, beginning from follow up with the channel partner where the old aggregate is located for availability and packing, to lining up with transporter for arrangement of vehicle, proper documentation and finally despatch has to be well in tune of time. And then you have also to accommodate for unpredictable but practical hurdles that come in way of this operation.

In order to streamline the logistics operations, especially for organizations involved in reconditioning business, deployment of dedicated vehicles is of great help. These vehicles are entirely at disposal of organization. The vehicles may be deployed through other transporters on agreed upon terms, or can be owned by the organization itself. As the movement of vehicles is entirely controlled by the organization, these can be used as and when required. The use of modern technologies like GPS may be further used for better vehicle tracking and enhance the effectiveness of operation.

Dedicated vehicle operation has multi-faceted benefits in a long run. Some of these are listed below:
1. Despatch of finished aggregates, picking up of old aggregates, and even picking up of raw materials from suppliers may all be planned en-route thus helping not only reduce the transit time but also transportation cost.
2. In case the consignee is located in a state which requires state road permit for in-warding material, use of such vehicles results in reduction in the number of road permits being used.
3. Delivery and pick up of materials involving locations where it is not easy to find a suitable transporter may be effectively done by dedicated vehicles.
4. The chosen vehicles may be custom made as per specific requirements.
5. Drivers of dedicated vehicles may be chosen and trained as required for enabling smooth operations.
6. There is definitely an improved level of reliability on self controlled vehicles, which helps in planning the operations in a better way.