Logistics is an essential aspect of the supply chain industry. It allows products to be moved to the end customer, satisfactorily and efficiently. It also requires effective logistics services for productive management on the freight side of logistics.
To be able to provide the right product at the right time, quality and quantity in a cost-effective manner highly depends on reliable logistics management coupled with careful planning, monitoring, controlling and sharing of appropriate information. As the requirement for punctual delivery increases, managing the transportation operations for logistics becomes increasingly difficult to manage. Adding value to transportation service vehicles will allow smart and effective infrastructure. This will enable logistics service providers to meet performance criteria such as prompt delivery and reliable services.
In the early 1990s, providing transportation services with respect, low cost and high services was considered to be a great service, compared to today’s customers. They are more demanding in the service that they receive and even require customised logistics options. This courses transportation services to lower their cost while still providing a high standard service.
When functions of the logistics industry are intertwined and then connected with each participant and process, the industry can provide better services and smoother information flow. This will reduce the risk of delays and dissatisfied customers. Decisions regarding logistics are critical and identifying problems can ensure that information is communicated and managed properly. Allowing the logistics industry to survive challenges and vulnerability.
These improvements can be implemented by introducing top level Logisticians to the sector. They are focused on long term planning and can understand and analyse transportation more clearly. This is the most suitable and cost-effective for the movement of shipment inbound and outbound. Logisticians have to keep in mind not only the nature and characteristics of products but also the other aspects such as volume, frequency, seasonality before making long term decisions. This may also include special considerations.
Logistics managers will also need to consider compromising when making decisions in networking and lane design, for example, manufacturers can save transportation cost by using a courier service in between their two sites and utilise cross-docking facilities.
To manage lane operations effectively on a regular basis, logisticians should have real-time information from operational freight transactions, for example, when logisticians have proper up to date information on freight like quantity, volume or size. This will make it possible to achieve feasible opportunities more proactively. Opportunities can produce a profit in terms of consolidation, for example, inbound and outbound consolidation and also profit economies of great opportunity which can minimise transportation cost and increase efficiency.
LTL (Less than Truckload) can also be consolidated to reduce inventory costs. This technique will build trust between the shipper and the carrier because only a select few carriers offer bulk quantity shipping capability. All of these opportunities depend on one thing, sharing information between all participants. The isolation of information among participants and related departments can course many shipment and logistics issues. The logistics industry are working on integrated supply chain mechanisms that can attain good profit and happy customers.
Traditional freight management was based on a sequential decision making which does not require critical strategic management. Now, shippers are using a complete integrated model for successful freight management. The freight industry can be managed efficiently by evolving and trending information technology mechanism which makes decision making easier for logistics companies. Modern logistics industries are using an RFID (Radio Frequency Identification) mechanism that is considered advanced technology. This application increase accuracy and supply chain visibility.
Contract Management Logisticians need to be aware and concerned about the context of cost and service levels so that it would be easier for negotiating and managing contracts with carrier service providers. Contracts should be based on a clear understanding of services required and what their standard operating procedures are. Assumptions in providing services will not be beneficial for shippers. Legal contract requirement and standard operating procedure should be clear and understandable; responsibility should be clearly defined when a supply chain faces any risk in transit.
Management of ports is based on planning loads, scheduling and routing shipments with the help of an information system. Individuals can better utilise the space in vehicles and increase efficiency by scheduling the most suitable equipment. Port managers can take advantage of the opportunities of efficient routing when a vehicle is fully loaded with multiple customers order and can identify which planned route is most suitable. This leads to a reduction in transportation costs. Logisticians should be making such port management decision’s that can reduce chances of damaged goods, for example, poor handling and poor bracing of loads in transit can damage the product and shipper may charge the carrier to return the damaged product. Therefore at an operational level, a decision should be taken properly to avoid excess costs at the port.
Information technology is evolving along with deregulation and globalisation, making customer’s more demanding. Logistics company’s objectives should be clear for a logistics manager and whatever the decision is made regarding freight management. This information should be shared with every supply chain participants. The whole supply chain needs to be integrated at each level to ease supply chain related risk that will lead to better services and satisfied customers.
Author Bio:
Sehrish Huma is a supply chain researcher and explorer. She has acquired her degree in Specialised Supply Chain Management from University of Karachi, Pakistan. She has writen many articles on various aspects of supply chain management and loves to share her knowledge with others.