Guest Post: Why Logistics and Supply Chain Management Is Important

Jul 26, 2022

Understanding supply chain metrics and processes are the first steps to improving efficiency and customer satisfaction. Supply chain logistics helps companies determine long-term goals and understand how to maximize their bottom line. However, there are many misconceptions about the role of logistics.

Discover the importance of logistics in supply chain optimization, as well as the benefits of logistics, be it reefer trailers, using dry van trailers, or anything in between. And remember, you’re not alone. Hundreds of companies are experiencing the same challenges.

Join thousands of e-commerce logistics leaders
Sign up for free to access unlimited data insights!

Impact of COVID-19 on global supply chains

Why Logistics and Supply Chain Management is Important - Image 1

There is no denying that COVID-19 is a major disruption to the global supply chain and logistics sector. The changes will have a broad impact on companies of all sizes, regardless of the industry sector. While it is not the only disruption that COVID-19 has caused, companies with a stronger supply chain will find new opportunities. This is largely due to the fact that globalization and the growth of the supply chain have created many systemic challenges that can impact supply chains.

The COVID-19 outbreak has also exacerbated the importance of communication and the need to coordinate customer orders and physical part flows. Companies started holding daily global operational calls to align global operations. Some companies reported delays due to a lack of transportation capacity. Some employees could not travel, creating delays in the supply chain. This caused a labor shortage that disrupted production in some parts of the world. Some companies even cited difficulties sourcing labor in some countries due to COVID.

COVID-19 has caused many challenges in global supply chains, including disruption of shipping lanes, human migration, and fluctuating demand. The pandemic has affected every sector of the economy, but the impact has been greatest in the tech, medical supply, and automotive industries when it comes to car hauling from one location to the other. Businesses that supply these industries are seeking guidance in preparing for the impacts of COVID-19. If you’re a supply chain manager, you should learn about the challenges this new challenge can create.

Ways to improve supply chain efficiency

The first step in improving supply chain efficiency is optimizing company-owned inventory. This can be done by examining each company’s function and its processes. Another step is to examine how all the parts of the supply chain work together. The key to improving supply chain efficiency is to have a clear strategy and plan. Incorporating a yearly objective and business plan will help to keep everyone focused and on track. By aligning the supply chain strategy with core goals, it will become easier to identify how to improve supply chain efficiency.

Statistical optimization tools and analytics can help you standardize your processes and improve supply chain efficiency. Statistical optimization helps you run leaner by minimizing delays and rework. With the help of analytics tools, you can identify wasteful activities, streamline processes, and optimize resource usage. Statistical optimization techniques can also help your business improve productivity by reducing costs and scrap. These are just a few ways to improve supply chain efficiency.

To improve supply chain efficiency, evaluate the performance of the entire chain at least quarterly. Identifying problems early on will allow you to pinpoint where to make improvements. Some ways to improve the efficiency of the entire supply chain include switching to a new supplier, testing different shipping services, or updating warehouse personnel training. In addition, regular analysis of the performance of every department in the supply chain will provide you with data to guide your process improvements.

Using world-class tools to improve supply chain management

Why Logistics and Supply Chain Management is Important - Image 2

A real-time supply chain can increase efficiency and control costs by tracking customer demand, maintaining finished goods inventory, and coordinating supply with multiple distribution channels. This system also integrates with the procurement process to ensure that information flows in real-time. 

Ultimately, this system allows for better, more accurate coordination of supply, even with a large number of suppliers and multiple distribution channels. 

  • Lean manufacturing principles

When it comes to a successful supply chain, it is crucial to identify and maximize the third-party relationships and the resources available to meet these relationships. Lean inventory planning can be a very effective tool to improve supply chain management. It can help a company increase its return on investment and reduce costs associated with warehousing. This technique can also streamline the labor force. It can help a company cut down on the number of warehouses it needs to keep products in stock. 

When it comes to managing risks related to your supply chain, some companies choose to diversify their sources. By doing this, they are able to minimize the reliance on high-risk sources. For example, companies in China have begun to spread their production to Southeast Asia while other firms are turning to broader geographic diversification. Global trade wars and supply chain issues have made regionwide risks even more real. By using this tool, companies can manage their supply chains more effectively. 

  • Advanced planning and scheduling software

The use of advanced planning and scheduling software improves supply chain management by maximizing resource capacity and optimizing raw materials. It utilizes mathematical algorithms to efficiently plan and manage complicated manufacturing activities, such as manufacturing new products, manufacturing batches, and ensuring inventory availability. Advanced Planning and Scheduling software offer many features to help businesses increase their efficiency. The software allows users to define rules for schedule optimization and minimize changeover times and preferred sequencing.

APS and production scheduling software are similar in that they can upload a variety of orders and then allocate different processes and resources for those orders. Both can generate schedules, which are usually displayed in Gantt charts to show the production of each order. Advanced planning and scheduling improve supply chain management and enable organizations to anticipate and react to changing market conditions. With these benefits, many companies have begun to implement APS software into their supply chains. 

  • Adaptive framework

The evolution of supply chains is characterized by increased complexity and reliance on new technologies. These technologies include digital business processes, which enable companies to share information, collaborate with customers, and trade electronically. These benefits are only possible in supply chains that are fully digital. 

However, the globalization of economies has resulted in changes in supply chains. Companies must periodically check whether they can outsource more stages of the operation. They must also ensure that the infrastructure to link them with customers and vendors is in place. Global electronics vendors have become highly adept at gathering and adjusting supply networks. This requires companies to rethink their supply chain management practices and embrace new technologies 

  • Real-time alerts

Real-time alerts allow businesses to keep track of every aspect of their supply chains, from shipment to receiving. Large companies typically operate high-volume supply chains that ship products to customers worldwide. Because of these complex logistics, real-time alerts are crucial to keeping everyone up-to-date and in the know. Some of these systems even send notifications to mobile devices. With real-time alerts, businesses can receive instant notifications about critical events as they happen, and they can also communicate with their stakeholders in real-time. 

Security is another key factor to consider when selecting a supply chain tool. Not only can data theft cause severe damage to a company’s reputation, but it can also lead to damaged relationships with suppliers. For example, if a competitor steals a company’s demand forecast, they may be able to sell their products more effectively. Financial data theft can have a negative impact on a company’s credibility. That’s why it’s crucial to choose a supply chain too with security built into its design. 

  • Supplier capacity

Supply chain management requires effective tools to run efficiently and effectively. From a single-point view, these tools allow companies to see their entire operations and the connections between the different parts. Likewise, they can help improve other techniques related to supply chain management, such as procurement, logistics, and manufacturing. 

Impact of technology on supply chain

Why Logistics and Supply Chain Management is Important - Image 3

Several technologies are making a significant impact on the supply chain and logistics industry. IoT (Internet of Things) and blockchain, which are associated with distributed ledger technology, make supply chains more visible. With these technologies, warehouses can be automated. These technologies can also use IoT, GPS, geolocation, temperature, and smart contracts to optimize warehouse activity and meet customer demand. The following are just a few of the technologies that are changing the way logistics professionals do business.

Automation - While many have feared automation as a job killer, automation has actually optimized existing workflows, freeing up human labor for more important tasks. Autonomous Mobile Robots (AMRs) - These robotics devices will eliminate manual labor for heavy-lifting tasks, so the human workforce will shift to overseeing these AMRs. In other words, we can expect automation to make the supply chain more flexible and efficient, while also cutting costs.

Automated systems - Using automated software, robots, or automated warehouses will make the process of handling orders easier and more efficient. For instance, warehouse robotics will prioritize orders based on accurate data, preventing mistakes that are costly and time-consuming. Robots also provide valuable information about order accuracy. A fulfillment company, such as ShipBob, can give merchants access to a variety of distribution metrics. This data can be used to calculate the perfect order metric and monitor performance.

Interested to have your work featured? Share your knowledge with our community by submitting an original article here!

Share this with your network

Also worth your time

Track your parcel here