Precise and Effective Logistics Execution
The importance and strategic role of the logistics function, is a source of constant concern for world class organizations.
This forces companies to constantly re-evaluate their productivity level, their use of assets and their level of understanding regarding their overall operations. The optimization of logistics operations combined with performance re-evaluation allows logisticians to remain competitive. Visionary company directors have realized that keeping their logistics activities on the cutting edge of technology enables them to remain highly reactive and integrated, guides them in their strategic decision-making process and helps them to identify problems and respond to customer needs. Logistics efficiency gives companies a leading edge and position from which they can better meet increasing customer demands. It consists of a combination of activities that revolve around the distribution centre including inventory management, labour efficiency, financial performance and operational flexibility.
All these activities must be integrated and organized in order to offer a reactive, secure, complete service while minimizing operational expenses. Good practices equal proper balance and management of compromises. Cost reduction in one sector can cause an increase in another. Inventory level reduction, for example, can ultimately lead to deterioration in cus- tomer service, if not managed adequately. In the same way, an inefficient operation can have a negative impact on a company’s commercial efforts.
The following principles govern the optimization of logistics operations:
- Organizational Analysis: Assessment of organizational structure and interrelation of departments. Review of organizational issues (power struggles, irritants and communication problems). Brainstorming with employees to establish cause-effect diagrams.
- Operational diagnosis: Conduct short initial study to provide clients with an outside evaluation of their operation. Implementation of the logistics function in the company. Audit established working methods. Recommend and document new processes.
- Inventory Diagnosis and Strategy: Diagnosis of inventory practices, systems and control mechanisms. Analysis of inventory levels, rotation, excess and obsolete stock. Analysis of storage strategies and product positioning related to overall inventory velocity. Analysis of inventory control practices. Recommendation on control systems to reduce discrepancies, variations and inventory losses. Development of procedures to ensure proper inventory control. Audit of operations to ensure application of inventory control procedures.
- Facility Design and Optimization: Analysis of current operations, capacity, stock levels, transactions, working procedures and productivity. Definition of design parameters. Development of applicable technologies and operational constraints scenarios. Recommendation of an optimal solution based on cost/benefits analysis. Optimization of operations based on available locations, storage and material handling equipment. Utilization of state-of-the-art .technologies to support industry trends. Optimization of product positioning to reduce travelling and increase productivity.
- Development of operational standards: Detailed analysis of working methods and processes. Development of time standards for each specific activity based on engineering methods. Benchmarking of standards with world class industries.
- Support and Concept Implementation: Establishment of proposed concepts following an operational analysis. Supplier and project manager selection, contingency plan and product removal.
- Reverse logistics: Introduction to reverse logistics flows. Implementation of returnable containers throughoutthe supply chain. Managementof cores and returns.