Logistics has been known to make or break a company. When people think of a company’s logistics division they should not think only of the shipping and receiving elements. Instead it should be thought of as a process involving the entire company, external companies, vendors, carriers and end users. It is a process that revolves around the movement of products from your suppliers through to the end user.
In order for a company to have a successful logistics division, working successfully for the client and the company there are several key elements involved to ensure that the company is efficient and effective while keeping customers satisfied with the end result.
The first issue and one most widely accepted as a company’s logistics program is the movement of goods. In order to effectively ship products to end users the shipping strategy used should be one in which is in complete line with the philosophy and strategy. Yes, many times emphasis is on speed but to be honest that component will come if everything else is in line. It is important that the pieces work together. Goods must literally float through the supply chain. Goods should maneuver to vendors, manufacturers, warehouses and end users flawlessly. In order to be successful hiccups should be minimized throughout the process.
Sharing information is an understated component of logistics management. It is actually one of the most important pieces of the puzzle. Communication is an element that needs to be included in every step of business and freight management is not secluded from this. It is important to know where products are, what levels inventory is kept and exactly when an error has occurred so that immediate action is taken to solve problems. Getting the information in a time effective manner will alleviate small issues from growing into irreversible problems. It helps to ensure proper decisions are made in a timely fashion.
Communication throughout the process includes personal on all levels to be working in conjunction with one another to create a flawless system of product movement. Order takers, production managers, suppliers of materials, distribution, financial means and sales forecasters need to have flawless communication representing the exact need/want for the right number of products to be manufactures and sold without excess which results in a loss.
Time verse service is another area of logistic services. Freight can only be shipped if the product is available and better yet if it is a desirable product. This means that you need to be a top producer of fad items before they become fads. Forecasting is used to see what trends are developing and need to be addressed in order to get shipments where they are wanted in a timely fashion. We see this often in the industry. If a company cannot keep up with the demands placed on them and backorders exist customers will simply find new suppliers. If a company needs a certain wood from you to create a product they are selling and the wood is delayed which in turn delays them they will seek alternatives. It is a simple formula that supply must meet demand and now not days from now.
Financials are involved in every aspect of a firm. Costs drive businesses all around the world. Profits high and cost low are a priority of all businesses. Although costs are important it is worth recognizing that often times low costs relate to subpar service. However, higher costs don’t always equate to better service. It is all a matter of balance. It is important to keep an eye on costs associated with every aspect of the logistics process, eliminating costs that are irrelevant and keeping costs within control of the company.
Many companies find it impossible to manage freight shipping logistic services and in turn look to outsourcing to companies who are capable of handling this aspect of the business with lower costs than the company can manage internally. Logistics, in order to be done properly, needs to be an integral part of all aspects of the company. Each individual piece lends to the success and competitive nature of the market place today.