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4 Ways to Boost Supply Chain Performance Through Better Logistics

Transporting goods quickly and efficiently is a complicated process that requires coordinating and managing different variables within a fast-paced and volatile environment. In a just-in-time environment, it's critical to carry just enough inventory, but to get there, OEMs require visibility throughout their supply chain.

Supply chain performance can be made substantially better by improving logistic systems. EBN recently spoke with a number of experts in the logistics field. Here are four tips to get your logistics systems revved up.

Ensure your distribution facility is up to date technologically
The explosive growth of the e-commerce industry has essentially increased demand for modern distribution facilities. The warehouse distribution sector is expanding rapidly, wishing to distribute goods closer to their customers. In addition to the e-commerce sector, traditional large users are specifying state-of-the-art DC facilities.

“With land prices increasing for the first time in several years, operators are insisting on higher, more efficient buildings from 24 to 32 feet clear. Some are even going to 36 feet clear,” Steven McCraney, CEO of McCraney Property Co., told us. “These buildings must accommodate modern high-speed conveyer and quick-pick systems, have better and more efficient T5 LED lighting, reflective roofing with more insulation, make better use of natural light, include advanced ESFR sprinkler systems, and some even insist on [green building] LEED certification.”

Other requirements include larger truck courts, more truck parking, higher ratios for employee vehicles, and custom bay sizing. The goal is to alleviate traditional bottlenecks and make sure the truck deliveries and outbound shipments keep moving.

Look to the cloud
Upgraded logistics systems using central task automation and cloud-based solutions allow organizations to integrate applications into a global infrastructure that gives manufacturers a comprehensive view of the supply chain. “Advanced analytics packages built into the logistics systems can look at different combinations of freight costs and duties to help find the vendors with the most efficient methods for distributing shipments,” said Elisha Herrmann, senior SAP application consultant at itelligence.

When decision makers across an organization see the same real-time snapshot of market activity, they can direct shipments accordingly and not worry about stockpiling contingency inventories. Burton White, director of supply chain and operations advisory services at KPMG, said that's one area in which cloud-based systems can help, but they also can highlight where profit centers are concentrated geographically.

Plan and manage the journey with partners
A well-structured roadmap is vital for demand-driven supply chains to succeed. “In demand-driven supply chain transformations, costs, investments, and benefits are balanced throughout,” said Kevin O'Laughlin, leader of KPMG's US supply chain operations service network. “A key factor is enticing customers and suppliers to join. It is important to convince them of the benefits they can achieve by collaborating. Successful programs establish a shared benefits model with partners, allowing both sides to provide input to the future state process and related metrics.”

Understand the processes associated with global trade
One of the stickier aspects of managing a global supply chain is dealing with different countries' trade laws and policies. Familiarity with the proper protocol will decrease the likelihood of delays and fines. “Regulations like the Dodd-Frank Act, which helps control the flow of conflict minerals, require nimble chain structures that can quickly adapt to new regulation to help avoid these penalties or, even worse, loss of licenses that are critical to foreign trade,” Herrmann said. “With modern systems, compliance checks can be easily conducted with mobile devices, empowering employees to keep a sharper eye on the status of products regularly and conveniently. Using updated logistics systems can help organizations centralize all automated, integrated activity and visualize end-to-end processes, associated costs, and an audit trail.”

Let us know in the comment section how you've used good logistics practices to increase supply chain efficiency.

5 comments on “4 Ways to Boost Supply Chain Performance Through Better Logistics

  1. t.alex
    November 26, 2014

    The key to a better supply chain performance thru logistics:

    1. Communication

    2. Communication

    3. Communication

     

  2. Daniel
    November 26, 2014

    “Transporting goods quickly and efficiently is a complicated process that requires coordinating and managing different variables within a fast-paced and volatile environment. In a just-in-time environment, it's critical to carry just enough inventory, but to get there, OEMs require visibility throughout their supply chain.”

    Jennifer, the best way is maintaining local warehouse near to the targeted customers/industrial areas; where they have a better business. This is the only way to reduce logistic & transportation expenses. I mean decentralizing the common warehouse concepts. The other feasible options are making or involving courier or logistic companies, who have a wide area of coverage, so that delivery can happen at low cost.

  3. Taimoor Zubar
    November 30, 2014

    @Jacob: While having warehouses near the production facilities may be one of the ways to keep the costs low and increase agility, that may not be the only solution I believe. It really depends on where you're saving the overall costs. Sometimes a centralized warehouse might cost a lot less and even with the transport costs, the overall cost savings may occur. I think a holistic picture has to be taken into account in this case.

  4. Daniel
    December 2, 2014

    “While having warehouses near the production facilities may be one of the ways to keep the costs low and increase agility, that may not be the only solution I believe. It really depends on where you're saving the overall costs. Sometimes a centralized warehouse might cost a lot less and even with the transport costs, the overall cost savings may occur. I think a holistic picture has to be taken into account in this case.”

    Taimoor, it can be of both ways. The best way is decentralizing the warehouse facility and good tie up with logistic peoples, who can deliver the items at nominal cost. 

  5. Daniel
    December 2, 2014

    “The key to a better supply chain performance thru logistics:
    1. Communication  2. Communication 3. Communication”

    Alex, am not getting what's the role of communication in supply chain thru logistics? Performance depends up on capability, deliverables and ofcource convincing others.

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