The entire production chain has been touched by the technological revolution that has been observed in several economic areas during the past ten years. The necessity of promptly adjusting to new market requirements also fostered this shift.
The logistics processes sector experienced significant modifications in its formulation. Within this framework, creative concepts have surfaced that have completely transformed this field. Integrated logistics is one of them; it has changed the way logistics collaborates with other areas (both inside and outside the organization) to a considerable extent.
Understanding Integrated Logistics
The logistics sector primarily dealt with transportation and storage for a very long period. But as technology has advanced and consumer demands have changed, this idea has broadened to include a wider range of activities.
Therefore, from the product’s point of origin to the delivery of the final product to the customer, integrated logistics anticipates the connection of all the processes involved. Apart from enhancing communication among various stakeholders such as suppliers, consumers, and employees, this field also introduces multidisciplinarity in the process of establishing and optimizing its activities.
This leads to a greater scope of management, enabling more control over all logistics-related processes, including stock, transportation, and supplier conditions. This enables every business to make more accurate plans in order to guarantee a seamless logistical procedure.
The multidisciplinary management of logistics is known as integrated logistics. It incorporates every step of the production process, from the product’s development to delivery to the end user. It extends beyond conventional management of transportation and storage.
How to apply integrated logistics in your company?
How can I use integrated logistics in my business, one may wonder? In order to properly respond to this issue, one must acknowledge that communication is the cornerstone of this process because precise information exchange is necessary in order to make appropriate decisions.
Three elements must be ensured by effective integrated logistics:
- Service availability;
- Delivery agility and punctuality;
- Customer satisfaction.
This can be seen in the following scenario, for instance: First, the purchasing department of a business uses precise data from the inventory division to determine what needs to be bought. This sector provides this information to suppliers, who notify them about anticipated product availability and delivery times. Thus, prompt and precise communication is the first step in the production chain’s integration.
The organization has to make investments in all three components of integrated logistics—materials management, material circulation, and physical distribution—after reorganizing all of the team’s internal communications.
Materials management: This first step includes obtaining raw materials and processing them via manufacture. It is handled by the departments of purchasing, acquisition, quality control, transportation, and storage.
Circulation of materials: The transport of inputs that ensure the efficient supply of the production line and the transportation of materials during processing is referred to as the “circulation of materials.”
Physical distribution: Lastly, physical distribution is the process of promptly delivering the finished product, in good condition, at a reasonable price, to its distribution or sale locations.
Benefits of integrated logistics
Effective management of the complete logistics flow leads to the simultaneous and optimized organization of all the company’s sectors’ activities. That’s exactly what integrated logistics aims to achieve.
The following are some advantages of integrating this area in a business: improved process organization and systematization; enhanced production speed; decreased logistical process expenses; less production waste; improved team collaboration and integration, and increased profitability.
New logistical solutions need to be incorporated with planning, research, and investment. More coordination for all teams within your organization is made possible by technological innovation and the hiring of qualified specialists to plan and oversee this process. This raises the caliber of services provided and strengthens your company’s reputation in the marketplace.
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