Logistic process find the best way to produce and distribute goods by taking into account how the market uses them. as a component of this cycle, an organization ought to continuously think about the area of an item and examine the different variables related with these areas. according to Project Manager, this includes personnel costs, production costs, the time and money required for deconsolidation, and storage options, including cost and space. A business ought to also take into consideration the elements that have an impact on the level of production quality as well as the effectiveness of transportation between hubs as part of this procedure.
Processes of logistics operations
Following are general processes in Logistic operations/ Logistic cycle:
- Serving Customers
- Product Selection
- Quantification of demands
- Inventory Management
- Logistics Management Information System (LMIS)
The primary objective of logistics is to serve customers by providing them with the products they require. The demand for various products at various locations is constantly monitored by logisticians.
It is essential to choose the right products for any logistics system. It straightforwardly affects the production network framework. As a logistician, you can select which product category you want to move from one location to another. This must be defined in order to appropriately plan your transportation, warehouse, and business location.
Quantification of demands
Quantification is the process of acquiring material from a manufacturer or supplier. It focuses on the estimation of the quantities. You are aware that from time to time, you may receive an unexpected demand for material or large orders. You must either import it or procure it to meet future demands.
Inventory management is responsible for the storage and distribution of goods in a logistics management system. When sufficient quantities of goods are obtained, they are stored until a customer places a purchase order.
Supply chain management (SCM)
The supply chain logistics management system is based on communication between the sender, the supplier, and the receiver. They must work together to ensure that the process is smooth and error-free.
Logistics management information system (LMIS)
The Logistics Management Information System (LMIS) is a process that plays an important role in delivering the right products, in the right quantity, at the right place, and at the right time.
Importance of logistic processes
Whether you're a manufacturer or a reseller, you'll reach your customers by promoting techniques or by word of mouth. But your product will reach them through a correct distribution network. It depends on the vendor whether or not they wish to manage the delivery system by themselves or source the provision to a reliable company to handle their offer chain management. Many distributors, dealers and retailers rely upon provision for the delivery of merchandise they need . The main responsibility of any provision is to deliver the correct product within the right amount to the correct client at the correct time. logistics management is such an important activity that focuses on the efficiency and effectiveness of daily operations.
Key logistic process efficiency factors
The following are some of the key logistic process efficiency factors:-
- The warehouse capacity is an important factor in inventory management and logistics operations.
- Shipping time When a customer places an order, you must ship the order as soon as possible and acknowledge the customer. The speed of your response has a positive impact on the customer and demonstrates the agility of your service.
- Order accuracy is simple to calculate and maintain warehouse stocks. However, it takes extra effort and focuses to keep the products accurate. Any incorrect products delivered to a customer will be returned, and please send the correct ones. As a result, the logistician will suffer a loss.
- On-time final delivery sometimes referred to as on-time delivery (OTD), is the proportion of goods delivered to clients on time relative to the total amount of goods dispatched. The KPI gauges the effectiveness of the supply chain and delivery activities. The units shipped on time cover the entire order and are not piecemeal.
- Transportation cost Mainly logistics makes an error in calculating the correct transportation cost. To improve the efficiency of your logistic service, take the shortest route possible to save money on fuel.
- Damaged products are the products that may occasionally arrive at the customer in a damaged state. As a result, you should always define your terms and conditions for customers. Always specify who will bear the loss if a product is damaged in some way and the customer receives it in that condition.
- Inventory turnover ratio shows how often inventory was sold over a certain time period.
- Lambert, D. M., Stock, J. R., & Ellram, L. M. (1998), Fundamentals of Logistics Management, McGraw-Hill/Irwin
- Rushton, A., Croucher, P., & Baker, P. (2022), The Handbook of Logistics and Distribution Management: Understanding The Supply Chain, The Chartered Institute of Logistics and Transport (UK), Kogan Page publishers, 5th ed.
- Scholz-Reiter, B., Windt, K., & Freitag, M., (2004), "Autonomous logistic processes: New demands and first approaches Proceedings of the 37th CIRP international seminar on manufacturing systems, Budapest.
Author: Billa Nalini