The supply chain department of a company looks at the entire journey and flow of goods. From the storage of raw materials to transportation of the finished goods, supply chain management looks at it all.
Supply chain management was not given much importance a few decades back. But now supply chain management is a very important part of a company. It the supply chain is modified, it can become a competitive advantage for a company. If supply chain management is done correctly, then losses of raw materials or destruction of finished goods can be reduced. Looking after the supply chain basically lowers the cost of wastage and errors.
A supply chain has a lot of components attached to it including proper planning, logistics, data management and much more. Logistics is one of the most vital parts of the supply chain and includes suppliers, managing transition points, delivery, pick-up, etc. This is the reason why a company should hire a good logistics company to ensure minimal risk of losses during the transition of goods and inventory.
In this post, we’ll discuss how logistics play an important role in Supply Chain Management.
The role of logistics in supply chain management
Warehouse management and design
A logistics company plays an important role in managing the storage of all kinds of inventory. Whether it is raw materials or finished goods, a logistics company needs to provide ample storage options for the kind of products they are moving and storing. For example, if the raw materials or the finished goods are sensitive to temperature, then the logistics company needs to offer a cold storage warehouse to store the items. Therefore, depending on the kind of products, the warehouse has to be designed accordingly.
Proper tracking process
A logistics company is also responsible for ensuring that the correct goods are picked up and then delivered to the correct destination. There might be instances where there is multiple pick up and drop off points. Hence, an advanced tracking system should be in place to ensure that the correct goods are picked up and delivered at their respective drop off points. Every year, companies face huge losses due to the wrong shipment of product. Proper packaging, code numbers etc. should be done to ensure that every shipment is made correctly and no confusion is created due to the bulk movement of goods.
The expertise of a logistics company is correctly managing the transportation of the goods. Pointing out the most cost-effective transportation for every product category at the minimum costs helps a company to improve its revenue figures. For example, in the case of perishable goods, the logistics company needs to organize fast and cold storage transportation facilities to ensure that the goods reach their destination without getting damaged. During such scenarios, the company can send goods by air for long-distance and for short distances can send them in refrigerated units of trucks or trains. Otherwise, in the case of goods like toys or any non-perishable goods, transporting by ship can prove to be a cost-effective method.
For these reasons, the proper handling by a logistics company is important for supply chain management and ultimately, affects the bottom line.
- Posted by admin
- On September 22, 2020