Logistics can be many different things, but its core is the support function of a business. It involves assuring the ‘three rights’ – making sure that the right items are in the right places at the right times, but goes beyond them. It is managing the flow of materials, goods and products through your organisation, and along your supply chains.
Every product starts as one or more raw materials, and is worked, reworked, altered or assembled at different stages before it is finally delivered to the consumer. Each of these stages is a link in the supply chain. Logistics includes any function that integrates information, materials, or products from link to link in the chain. It includes inventory control, transportation, materials handling, warehouse management, order fulfilment, packaging, customer care and even security. Logistics is adding time and place utility value to goods as the move through the chain.
Logistic planning is gathering information and putting structures in place to make sure your logistics function can achieve the three rights in the future, in an ongoing fashion. More importantly, it seeks to make certain you have plans in place to deal with disruptions to your supply and transport resources. As ‘leaner’ logistics practices become the norm, fluctuations and disruptions are becoming commonplace. A proper logistics plan will be responsive to disruptions in order to keep production moving even in adverse conditions.
What is the goal of logistics planning?
The goal of logistics planning is to ensure logistics services are extended to your company or clients at sufficient service levels at the lowest or most efficient cost. By extension, logistic planning service is a particular type of logistics management often offered by third party logistics companies (3PLs) and consultants. It involves ensuring that your business plan remains viable by arranging an intersection of all of your logistical needs, as well as creating a comprehensive plan that the logistics manager can follow in practice.
These logistical needs involve making sure all of your resources are:
- Of acceptable quality to produce the final products you intend,
- In the correct quantities, neither too much nor too little, to avoid both supply price fluctuation and excessive storage costs,
- Sourced appropriately, both in terms of reliability, transparency, and risk to public opinion,
- At the right place, where they can be used by your business,
- At the right time, allowing a leaner, low-storage model while avoiding delays and shortages,
- And at the right price, in terms of the most effective and efficient pricing, which is not always the lowest.
Logistics planning services are engaged to make sure that your processes and facilities are appropriate, and sufficient in all ways to meet foreseeable future needs of organisation, management, coordination supply and control. It is an attempt to ‘future proof’ the logistics function of your business in unsteady and volatile times.
Older logistical planning methodologies separated external logistics – that is, the physical distribution of finished products, and internal logistics – the goods, materials, labour and other resources needed to produce our products. Modern planning methodologies prefer to combine these artificial distinctions into ‘total supply chain’ logistics. In the end, your supply chain passes through your business, linking all of your suppliers (and all of their suppliers) to your customers. Only by appreciating and mapping the whole of this massively interconnected ‘supply web’ can a logistics planning service ensure steady, predictable flow through for your logistics functions, and produce a logistic plan that will see you through shifts in supply, demand and public opinion smoothly.
But why do I need logistics planning services?
Every business has some logistics function. No matter what you are doing, you need to supply goods, services and/or information to your customers, and receive payment in return. You will be sourcing raw materials, parts, or finished products, transporting people, units and material, and keeping everything moving smoothly. To stay competitive, you struggle every day to minimise costs, maintain and improve customer service levels, avoid or mitigate disruptions of all kinds, and improve the quality of all of your deliverables. Every day your logistics performance is not improving, you are falling behind.
The challenge here, is that logistics – supply, transportation, and delivery, isn’t the core of your business. It isn’t what sets your products apart, and it isn’t the strength that you bring to the business. Production is. Innovation, design and creation are your strengths and where you can make the biggest contribution to the business’ success. That is why you need a logistics planning and management partner. A good logistic planning service is operated by experts in supply chain management and organisation. Specialists whose strength lies in planning and organising logistical processes, and can therefore contribute as much to your logistical process as you contribute to management and production.
A specialist, dedicated logistic planning service can help you define your logistics needs both now and in the foreseeable future, and put policies and processes in place that will keep you productive and profitable, come what may. A properly planned logistics function will ensure higher levels of customer satisfaction, reduce the number of disruptions you experience and mitigate the impact of those that cannot be avoided, all while reducing your actual costs.
Better still, this level of specialist logistic planning service is nowhere near as costly as it sounds. A properly planned and managed logistics function, operated wholly or in part by a 3PL, is generally less expensive than an wholly on-site, in-house operation despite having what it takes to outperform in-house logistics planning and management in just about every measurable way.
This is the reason why businesses of all kinds are moving to the use of a logistics planning service or other services provided by 3PLs. Competition is stiffening in just about every market. Efficiency, reliability and performance are more important than ever. An expert third party logistics service can bring you the efficiency, reliability and improved profitability you need.