As freight volume grows and transportation becomes more complicated, the need for robust logistics management increases. Logistics management is a primary factor in the success of any company’s operations and has a direct impact on its bottom line. Additionally, meeting customer demand and providing superior service is one of the goals of good logistics management.
According to the definition of The Council of Supply Chain Management, “logistics management is a part of supply chain management that plans, implements, and controls the efficient flow and storage of goods, services, and related information in order to meet customers’ requirements”.
Fundamentally, logistics management is the control and supervision of the movement of goods. However, the scope of managed processes reaches far more than that. It involves a multitude of different factors including transportation management, freight and inventory management, materials handling, and order fulfillment.
Consumers demand better service, and this mandate creates a need for shippers to provide fast, accurate and quality service. Good management strategy is aimed to constantly optimize transportation processes and eliminate disruptions. Therefore, it has a direct impact on your customers’ satisfaction. Improved customer service can bring a good reputation to a company’s brand and help generate more business. The smoother the freight moving processes are within and beyond your company means that you will provide more value to your clients. Ultimately, well-handled logistics contributes to the overall positive customer’s experience.
It is important to create visibility into a company’s supply chain. Advanced transportation management systems (TMS) analyze historical data and track the real-time movement of goods in and out of a business. Logistics managers can use this information for process optimization and avoiding potential disruptions. TMS data analysis keeps a company’s supply chain moving more efficiently, all while gaining operational insight.
Managing logistics on a proper level will give a company control over inbound freight, keep inventory at optimal levels, organize the reverse flow of goods, and utilize freight moves on the proper transportation modes – all of which can cut costs significantly.
Essentially, before turning to external help and investing in management technology, you want to make sure it will bring beneficial results. That’s why it is important to know how to measure the effectiveness of any new practices.
Many companies look to third-party logistics providers (3PL’s) for help as this simple concept can often become very complex and not so easy to execute. 3PL’s have the expertise and advanced technology to cut costs and improve processes much more efficiently than companies can in-house.