Revolutionizing the Industry: Discover the Top 3 Logistics Trends for 2023! | Image source: Pixabay

Everyone who is familiar with the transportation industry understands that things do not always go as planned. Yet, by 2024, it will be evident that any sense of stability is a delusion. Transportation systems around the world are under severe strain as a result of a scarcity of diesel and drivers, as well as a shortage of raw materials, growing inflation, and the conflict in Ukraine.

Many of these external factors have contributed to supply chain resiliency reaching new heights in the public perception. Delays in supply chains have dominated the news internationally, and the problem has increasingly made its way onto the agendas of major corporations.

Read also: What is Lean Logistics? 5 Ways to Manage Lean Logistics Effectively

With this quarter of the year closing, logistics experts will be asking themselves one question above all others: what will the rest of 2023 bring? Notwithstanding the challenges, three themes are developing that will impact supply chain planning for the coming months. We’ve created this list of the top 3 logistics trends for 2023 to help you on your way to supply chain sustainability.

1. From resilient supply chains to optionality

The transportation industry recognizes the need to strengthen supply chain resilience. Increasing the resilience of supply chains is a top objective for shippers, carriers, and logistics companies. This is accomplished by implementing new business tactics or digital equipment. Nevertheless, with in following quarter, this strategy will need to be carried a step beyond. The emphasis will center around making more space for maneuvering. Companies will only be capable of exploring different methods if they have the requisite freedom and flexibility. The aim for all businesses ought to be to become ready for action before they have to adjust and consolidate. The multi-shoring method, for example, is an effective way to accomplish this.

Many traditionally “low-cost” locations, such as Asia, are becoming increasingly hostile for many Western enterprises due to the ongoing geopolitical instability and growing pricing. As a result, rather than following a single procurement strategy, several businesses will increasingly aim to create markets and capacity in Europe and North America in an effort to safeguard their business strategy in the long run. Yet, in order to acquire additional flexibility and freedom in this manner, businesses must also have extensive, real-time information into many markets and operations. Compatibility with key stakeholders’ digital systems must also be ensured.

The latter is concerned with implementing industry-proven technologies. As an instance, consider transport management systems. According to statistics, the most of freight forwarders are currently using this technology to locate extra capacity when their own network exceeds capacity.

Supply chain participants have more control over their own performance by exploiting digital platforms and industry-specific networks. This is especially crucial considering the possibility of additional external forces causing greater disturbance.

2. Cooperation must be a priority

More coordination among enterprises has frequently been advocated in the transportation industry over the past few years, but has seldom been implemented. Collaboration must become second nature in the following year.

Because this is critical for successfully addressing the obstacles that businesses face. According to a survey, 71 percent of those involved in the supply chain agree fully with this observation. But nonetheless, there is still much room for growth. Hardly 17% of the supply chain’s stakeholders consider their partnership with third-party logistics providers (3PL) and freight forwarders to be “extremely high.” The most significant barriers to enhanced coordination include poorly integrated IT systems, misaligned KPIs, and insufficient data exchange.

Only via enhanced collaboration will all firms throughout the supply chain be capable of filling the capacity gaps that exist currently among shippers, freight forwarders, and logistical service providers. At the exact same time, here is where some of the industry’s most significant difficulties and potential exist. Data exchange improves teamwork, allowing supply chain players to eliminate empty miles, operate more effectively, and make more strategic decisions. Neutral platforms can connect organizations at all phases of the supply chain together, ensuring that everybody is on the same page.

Rather than relying solely on digitization, a balanced approach combining technology and humans will be essential. Some research claim that introducing the “human factor” into digitization can help businesses create trust, increase communication, and overall strengthen their operations. Increased collaboration through increased trust is an underutilized possibility for modern supply chain efficiency. As a result, transportation businesses will prioritize the expansion of their collaboration in the next year.

3. Continued focus on sustainability

A positive conclusion can be formed for 2024 in terms of supply chain sustainability. According to the Decarbonisation of Freight Transport 2022 report, 59 percent of freight forwarders and 54 percent of shippers can compute their transit CO2 emissions this year (up from 45 percent and 37 percent, respectively, in 2021). Yet, given current media attention and new investments, there are obstacles. The current economic crisis is an illustration of this, which cannot be disregarded.

Inflation has reached its peak point in decades, and we are on the verge of entering a recession. As a result, certain sustainability programs are likely to slow down.

Yet, economic growth and sustainability must not be pitted against one another. Forward-thinking businesses will continue to pursue sustainability practices, though with a little different emphasis. In the future, you’ll wonder, “How can we best combine our sustainable strategies with our economic goals?”

The answer is simple: data is critical. The best way for firms to make sensible and data-driven decisions is to gather data from across organization and correlate it using data analytics from cross-industry networks. This enables them to focus on the essentials and perform more effectively altogether. Intellectual elites in the business have already realized this and will begin to prioritize long-term sustainability initiatives. They can ensure that today’s trial programs become tomorrow’s norms in this way.

Finally, 2022 demonstrated the underlying inefficiencies that persist in global supply systems today. Fluctuating prices, cost pressure, or the understanding that digitization alone is not a cure-all: 2022 was a tough year for the overall industry. However, we can look forward with confidence: in the upcoming months, corporate leaders and those in charge of transportation must guarantee that the right networks and tools are established and expanded. Then you’ll be ready to take on new tasks.

3PL Links is always available to assist you in staying on top of your logistics game; please feel free to contact us if you have any concerns.

What is Lean Logistics? 5 Ways to Manage Lean Logistics Effectively | Image source: Unsplash

The application of lean management ideas to supply chain performance is known as lean logistics. Lean Logistics analyzes and removes non-value-added operations in order to enhance the flow of commodities and save expenses.

The goals of lean logistics include waste elimination and quality enhancement. Lean logistics allows for the streamlining of logistical procedures across all industries, not simply those of manufacturing firms.

For all supply chain managers looking to simplify their logistics, this article offers a tried-and-true method. It is possible to embed lean management in the organization more easily, promptly, and sustainably by implementing the right adjustments at the right time and putting them into place in an organized, standardized manner. A workshop on lean management can assist with application.

The following section presents five effective ways to adopt lean logistics.

What is Lean Logistics?

Lean manufacturing refers to eliminating waste in the production process, such as by speeding up deliveries and throughput. Engineer Taiichi Ohno of Toyota Motor Corporation created the idea in the 1970s.

Lean management is now universally recognized as the norm for industrial businesses. Lean IT can use lean management as well. What does this signify for supply chain management and logistics?

Like other businesses, logistics is experiencing a rapid change in client demands. Companies can respond to these demands more quickly and flexibly thanks to lean procedures. The logistics procedures must guarantee a constant flow of customers and production: just in time. Value-added processes are optimally connected and coordinated by lean logistics.

The foundation of lean logistics is the notion that any process can be made better by cutting out steps that aren’t necessary and repurposing strengths.

To become a lean organization, the logistical procedures must be improved. While logistics costs in industry range from 5 to 15% of turnover, they can potentially approach 15 to even 25% of turnover in retail.

To adopt lean logistics in any supply chain, a variety of lean methodologies and technologies can be used. This article details the essential transformation process and a workable technique for implementing lean logistics.

1. Focus on the lean principles of a lean organization

The principles of lean manufacturing, administration, and logistics management:

• Customer-centricity: Understanding the logistics value stream
• Process Orientation: Identifying and enhancing the steps in the process that increase the value stream.
• Flow orientation: Pull methods to decrease lead and waiting buffers, discover and continually eliminate waste, minimize inventory, and utilization of technology are all examples of flow orientation.
• Striving for supply chain improvement: Creating a continuous improvement process and monitoring performance through shop floor management are two ways that supply chain management can be improved.

2. Identify customer benefits: value stream analysis for supply chain management

What exactly is a value stream? It can be summed up as the things that the customer values because they get something out of them. Only actions that the client would be willing to pay for are useful. A method for assessing processes by taking into account the movement of materials and information through them is called value stream mapping (VSM).

A tour of the business is used to actually record the value stream there, where it is actually occurring. When the procedures are evaluated from the perspective of the client, the problem is analyzed upstream and begins with the customer (line back planning principle). The representation, though, is downstream. The material flows are represented by straightforward symbols along with the analysis-relevant properties, such as processing time and setup time. In actuality, the value chain is used to identify waste.

Based on this, a target value stream is developed. In order to obtain a waste-free process, it is important to systematically work through the areas of rhythm, flow and control in the first phase. Once the development of a value stream is complete, it is implemented with the help of an action plan.

3. Eliminate waste through lean logistics

Waste must be found in the current logistical operations in order to be eliminated. The core of lean manufacturing and the shift to lean management is eliminating needless activity in all areas.

For instance, there are various ways that resources might be wasted in logistics, such as:

• Longer wait times due to excess inventory (inventory/overstock)
• Poor planning and unnecessary transportation
• Rejects or defects
• Overproduction (e.g. packaging: packaging that does not effectively protect against damage or too much packing material)
• Long lead times and wait times
• Movement and travel times

What is Lean Logistics? 5 Ways to Manage Lean Logistics Effectively | Image source: Pexels

4. Reduce inventory: pull principle of lean management

Inventory reduction throughout the supply chain is one of the most prominent lean logistics approaches. Getting rid of unused inventory boosts efficiency. First, supply chain management should be utilized to determine which products a company has in stock and where they are located. The item’s necessity for storage in your own logistics is then established. If an item does not need to be stored, it is removed from the warehouse.

Barcodes for inventory tracking should also be taken into consideration. Companies can readily know what products are available and where they are courtesy to barcodes (material flows in logistics). Some businesses manage their inventories using software. These tools can enhance storage and retrieval as well as automatically update inventory. According to the lean philosophy, pull methods for inventory minimization have proven their worth.

The pull strategy, which focuses mainly on customers who intend to purchase the product, is effective for both online and offline retail sales of goods. As a result, it is demand-oriented. Only when a consumer places an order do the production and logistics procedures start. This reduces the consumption of resources.

Another method of implementing lean logistics is through the use of technology. Tasks can be automated and the workflow as a whole improved with the appropriate tools. Storage is enhanced by the material flow conveyor technology. Between various parts of warehouses, products are moved using conveyor belts. This reduces the amount of manpower required to move goods within the warehouse, such as when loading cars with boxed packages.

5. Shop floor management of the logistics chain

The measurement of an activity’s results is known as performance measurement. The goal of the Lean Logistics Manager is to continuously enhance the efficiency of the company’s supply chain and logistics such that they become second nature.

Shop floor can also be translated as “hall floor,” “workshop,” or “workshop” in German. It is where value is created. Shop floor management is the practice of having managers oversee the logistical quality process while they are physically present at the site of the action (i.e. the shop floor). Direct process improvement at the site of work is the aim of lean management.

Conclusion: The customer in focus with Lean Logistics

All logistics-related business processes should be developed with the objective of adding value for the client, according to the foundational principle of lean logistics. The lean management strategy places an emphasis on waste reduction and continuous improvement. Lean management enhances quality and adaptability, lowers expenses, boosts production, and ultimately generates greater value for clients.