Supply Chain – Logistics

This is part three (3) of a five-part series of insights about Supply Chain. Part one was an overview of what supply chain means and the four pillars of an effective supply chain solution – sourcing, logistics, distribution, and customer fulfilment.

In the second part we took a closer look at the fundamentals of sourcing.

https://www.tsp-ukltd.com/post/supply-chain-sourcing

The next logical step in getting your supply chain to work smoothly is the logistics element; another subject that can have various meanings dependant on perspective, but as with all of the component parts it is a vital piece of any supply chain infrastructure.

Straight from Google…

Logistics is the process of planning and executing the efficient transportation and storage of goods. The goal of logistics is to meet customer requirements in a timely, cost-effective manner.

Straight from the dictionary…

The careful organization of a complicated activity so that it happens in a successful and effective way.

Simple enough and as a rule I much prefer simple! I really like the Google definition as it keeps the customer/client at its heart - which can get lost in all the planning and executing - the end goal should always be customer/client satisfaction.

The dictionary definition is also interesting as it refers to ‘complicated activity’. Whilst it is not always the case that what is required from logistics is complicated, it can be, and when it is then the planning and execution become critical.

An oldie but goodie.

“If you fail to plan, you are planning to fail” – Benjamin Franklin

Can’t really argue with this fella? Never been truer than when dealing with logistics: Dot every I and cross every T and stress test your plan, you won’t regret it!

I do like to advocate that simple is best, and whilst there are many planning models available. I generally advise using a CPA (Critical Path Analysis) when dealing with logistical issues; it allows for common sense, a much-undervalued commodity. Don’t over complicate the CPA but be sure that all critical elements are accounted for.

Make sure the person responsible for the logistics plan/action has fully understood the brief, including timelines, budgets and the (aforementioned) client satisfaction and what that practically means.

So, who in your business is best placed to undertake any logistic planning an execution, or do you need help? Any decision will be coloured by the extent of the requirements involved but some, if not all the below skills will be vital/ideal in the individual/individuals.

Technical skills

• Inventory Management – critical if stocking product

• Warehouse Operations – critical if stocking product

• Transportation and Distribution Planning

• Legal Documentation

• Freight Management

• Route Optimization – critical if you are doing your own deliveries

• Reverse Logistics (Returns)

Soft skills

• Problem-Solving

• Communication Skills

• Time Management

• Attention to Detail

• Teamwork and Collaboration

• Negotiation Skills

• Leadership and Supervision

If you are not exporting/importing then obviously some of the above can be ignored, but even in the most straight forward of logistic operations the majority of these skills will be required.

I have highlighted Inventory Management & Warehouse Operations as these will be critical factors if a decision is made to ‘stock’ product. I may be biased but I believe that these functions are often disparaged and undervalued. A well-run Warehouse Operation is the foundation of a good supply chain; the flow of goods and all that that entails, it can make or break a company’s ability to deliver what has been promised. Likewise good control of inventory will impact service and costs; no-one wants to go out of stock of critical product or have to write off unwanted stock!

I implore companies who want/need to stock product to invest in good quality people and systems where Warehousing is concerned, failure to do so will not end well.

I have also highlighted Teamwork and Collaboration specifically because in my experience the best logistics projects/solutions came from teams working together in a positive and trusting environment. Not always easy to create the perfect environment, as departments/people can get laser focused on delivering their part of a plan sometimes to the detriment of the other elements.

Dependant on the size of the project it is always worth considering having a project manager in charge. A good PM will keep the end goal in sight, while at the same time ensuring that all elements are pulling in the same direction. The bigger the project the more important the PM. If you don’t have the necessary person in house, consider a short term (Fractional) appointment?

On the face of it logistics are neither exciting or sexy, but I hope this article at least gets across how vital it is to establish a smooth well managed function and how important it is to get the right people and mechanics in place.

The logistics component of the supply chain, like all of the others, needs proper TLC if success is to be achieved.

Neglect it at your peril.

Steve is a proven and experienced business leader and senior manager. With a 35-year track record in leadership roles, Steve has managed and led teams from small, project teams to national teams of over 200 people.

A specialist in operations, logistics and supply chain management, Steve’s wider commercial experience includes business ownership and business mergers and includes personal leadership roles from single-site to multi-location businesses with sales in excess of £200m per annum.