The distinction between Logistics and Distribution can sometimes be blurry. Both cover a broad scope of activities like planning, material handling, transportation and inventory management.
Implement sensible granularity into your cost requests with logistics providers. Request that they provide you with rates by individual product, container load and other factors.
Supply Chain Management
Supply chain management is an expansive field that encompasses everything from a company's initial product development Process Improvement to its end customer. A role in supply chain management can include a variety of managerial duties, as well as an analytical and technical focus.
Depending on the company, a role in this area can involve collaborating with a wide array of other departments, including planning, marketing, finance, production and quality assurance. Supply chain managers also oversee a complex network of suppliers, logistics partners, distributors, wholesalers, manufacturers and end customers.
The supply chain process begins with a sales order from a customer to the company. From there, the planning department creates a production schedule to manufacture the requested goods. The materials then arrive at a distribution center or warehouse where they are stored until they're needed for production or shipping. Some logistics businesses specialize in warehousing and storage. Other companies work exclusively in transportation management, focusing solely on getting the products to their final destination.
Inventory Management
Inventory management involves determining which stock to order and how much to buy. It also tracks stock from purchase to sale, and identifies trends to ensure that there is enough inventory to meet customer orders and provide proper warning when a shortage will occur. It focuses on cost-effectiveness and maximizing customer service.
Companies use different methods to manage their inventory, depending on their business model and product type. For example, a company using just-in-time manufacturing may only produce enough goods to match demand, which reduces storage costs and waste. Others may employ last-in, first-out (LIFO) methodology, which considers that older stock is less expensive and moves the oldest goods into sales first.
Many companies also use economic order quantity (EOQ), which is a formula that calculates the optimal quantity to reorder to minimize inventory holding and setup costs. Other inventory control models include minimum order quantity (MOQ) methodology and periodic inventory system. The latter is a simple system that performs a physical inventory count only once per accounting period, while the former uses automated software solutions to update balances as soon as stock enters or leaves a warehouse or is sold.
Transportation Management
Transportation management is the process of sourcing transportation and managing freight movement. It is a crucial part of logistics, as it ensures that your company can deliver products to customers as quickly and efficiently as possible.
Today's economy has raised customer expectations for faster product delivery. This puts pressure on distribution service levels and warehousing to keep up. Having the right transportation management system helps you strengthen performance trade-offs to meet your customers' needs.
Using the best transportation management software, you can streamline and automate your supply chain processes and improve performance. For example, a transportation management system (TMS) like GoComet allows you to get real-time visibility and optimize shipment flow. It also provides you with a network of 50,000 shippers, carriers, suppliers, and brokers to amplify your own TMS with EDI integration. Similarly, Freightview is an AI-powered TMS that provides you with the ability to procure freight rates, manage documents and quotes, and automate workflows.
Warehouse Management
Warehouse management involves daily oversight of all warehouse operations, including inventory tracking, shipping and receiving, employee motivation, safety processes and procedures, business support services, and more. Effective warehouse operations are essential to the overall success of logistics and distribution strategies.
Order fulfillment speed is key to satisfying online customers, who easily click away to competitors when they're dissatisfied with the time it takes for their orders to arrive. Warehouse managers can accelerate this process through a number of tactics, including streamlining picking and packing, improving efficiency with storage solutions like zone picking and wave picking, and incentivizing staff for their efforts.
Warehouses also need to be organized to accommodate varying demand for goods and materials, with high-demand items stored near the front of the facility and lower-demand products stored toward the back. This requires sophisticated inventory planning, backed by data-driven analytics, so that a business never runs short of core or high-demand goods or materials and doesn't tie up capital unnecessarily in warehoused inventory with sluggish sales.
