logistics and supply chain management

logistics and supply chain management

It is impossible to run a successful business without providing a proper organization of every process. Whether you own a small, medium, or a large business, you need to control a great number of different operations. Any business is similar to a mechanism, which consists of a large number of details, and each of them is irreplaceable and interconnected with others. Therefore, to streamline and regulate all business components, it is necessary to provide a logistics system and apply supply chain management software.

Nowadays, the use of logistics solutions assures convenient and secure business running. More often, it takes a lot of time and effort to organize a quality logistics system and supply chain management. That is why the majority of business owners prefer to use special services. It is possible to get a supply chain consulting and order a full package of logistics services. Furthermore, there is an opportunity to receive track and trace solutions, brand protection activities, serialization of products and goods, digitalization and automation of all business procedures, etc.

Professional companies, which carry a supply chain consulting, offer:

  • Business support (compliance advice, serialization, automation, etc.)
  • Functional consulting (system validation, software implementation, design, analysis, etc.)
  • Technical maintenance (ABAP and JAVA developments)

Why Everyone Needs Logistics

Logistics management is a complex system of solutions, which are aimed at solving business regulation problems. Logistics solutions are provided to assure quality and detailed organization of all business procedures at every stage. In the modern world, logistics is a pledge of prosperous commercial activity.

The key benefit of a logistics system is its multifunctionality as it covers the management of commodity, financial, and information flows. The main principle of the logistics solutions implementation is to maintain the communication and interconnection between all elements of the business.

When you carry a logistics system, you can use the following logistics methods:

  • MRP (materials requirements planning)
  • MRP II (manufacturing resource planning)
  • DRP (distribution requirements planning)
  • ERP (enterprise resource planning)
  • Lean production
  • CSRP (customer synchronized resource planning)
  • EOQ model
  • System of two levels
  • Double hopper system
  • A model with a constant frequency of order
  • ABC analysis
  • Stock management
  • Business distribution

Logistics solutions can be implemented into different spheres, including:

  • Multimodal transportation
  • Transport and forwarding services
  • Regulation and management of a warehouse activity
  • Control of the material and technical base
  • Paperwork (customs documents)
  • Operational and strategic planning of corporate logistics system management
  • Organization of products sale
  • Management of system of information and reference services

Any logistics system includes 5 main components, which are known as a logistics mix:

  • Storage activities (building of storage facilities, distribution centers, etc.)
  • Stocks (regulation of the conditions of goods storage and control of the volume of the stock)
  • Transportation (types of transport, types of containers, timing, availability of drivers, etc.)
  • Equipment and packaging (convenient, reliable, and safe packaging)
  • Connection (stable communication of all departments during the whole work process)

What Is Supply Chain Management

Proper organization of a supply chain functioning is a recipe of success for any business. Quality and detailed regulation of a supply chain ensures stability, constant development, customer satisfaction, high income, etc.

A supply chain is determined as the system of all business processes, from goods production to their distribution and selling. In fact, a supply chain is a network of business procedures, which includes different levels of certain processes and phases. Therefore, a proper administration of the supply chain is essential to achieve success.

Supply chain management (SCM) is a mandatory business procedure. It consists of a management concept and organizational strategy, which are aimed to regulate the flows of services, products, finances, information, etc.

There are 7 principles of successful supply chain management:

  • Providing consumer segmentation based on current customer’s needs
  • Targeting the logistics network to the client
  • Monitoring market competition
  • Studying consumer requirements
  • Strategically planning deliveries
  • Outsourcing strategically
  • Finding new methods of attracting more distribution channels

Usually, supply chain management systems are divided into two main blocks:

  • SCP (supply chain planning). SCP includes the elaboration of work schedules, analysis, forecasting, simulation of diverse situations, supply chain design, etc.
  • SCE (supply chain execution). SCE includes regulation of all logistics operations execution.

However, there is a more detailed division of the main directions of supply chain management:

  • Strategy elaboration. It is necessary to plan your work process in accordance with all your needs and your business features. Consider every stage of a supply chain and define strong and weak points.
  • Goods production. Implement digital innovations into your workflow to make it more convenient and accelerated. Focus on the quality of produced goods.
  • Warehousing. Pay attention to the storage of your products. Proper conditions in your storage places influence product safety.
  • Packaging service. Select high-quality materials not only for your products but for packages as well. Packaging should be alluring and convenient for customers and quick and cheap for you.
  • Inventory. Provide your business with everything necessary, including needed tools, automation systems, etc.
  • Transportation. A proper transportation regulation allows you to expand your business. In addition, the protection of your products depends on this aspect.
  • Communication with customers. Determine your target audience and follow their requirements and preferences.

Components of Supply Chain Management

There is a great number of typical components of supply chain management. There are some of them:

  • Demand forecasting (short-term forecasts – up to 4 weeks, long-term forecasts – up to 6 months)
  • Sales planning (daily, weekly, monthly sales of goods)
  • Inventory administration (planning of a warranty stock, current stock, etc.)
  • ABC-XYZ analysis
  • Cross-ABC analysis
  • Elaboration of a procurement report
  • Visualization of sales data, prices, leftover goods, etc.
  • Grouping of products
  • Serialization of goods

The use of supply chain management covers a large number of work procedures. It guarantees the execution of all processes and provision of all flows (financial, informational, etc.) on the highest level. The main principle, which should be considered while providing logistics system and supply chain management, is the interconnection of all business elements. It is important to keep all business components at the same level to provide stable workflow and quality products.

About the Author: Mike

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