What is the difference between delivering a pallet or a package and managing a supply chain? While some companies still have a limited view of their logistics, without a true holistic approach, others are aware of how important their supply chain is to them, of all the elements it encompasses and how it can help them make a difference. These latter companies are the ones that can aspire to achieve what is known as comprehensive logistics.
What is Integral Logistics
Integral logistics encompasses and coordinates all the processes necessary for the flow of materials in a company. And it does so from a global vision. In other words, they know how the different parts (departments, people, processes…) that compose it must be harmoniously directed towards a common goal and they understand the importance that all this has for the progress of the organization.
Integral logistics knows that it goes far beyond the mere movement of a material from point A to point B. It takes a step back to better understand what it does, why it does it and why it does it; with the aim of finding the best way to do it. But, what are the elements that have to be integrated to achieve this joint operation?
functional integration
Logistics is an interdepartmental task. In other words, it requires the active collaboration of various company departments. The logistics process does not begin with the preparation of the order, much less with its shipment. The supply tasks for production must be coordinated with the commercial departments and with their sales forecasts. And these, in turn, with those of marketing, since the production needs of the company will also depend on their activity (including knowing which dates may have more or less volume based on historical data, new launches, new promotions, etc. .).
When all of them work in unison, communicating with each other and are aware of the importance of their work to facilitate the work of the rest, it will be much easier to achieve a good final result. When each department lowers its sights and only focuses on its own, the conflict is assured.
Authentic Integral Logistics goes beyond installing an ERP
business integration
Making the departments of our company work in unison and coordination will not be enough. Authentic business logistics does not consist of installing an ERP that can be accessed by the different departments of a company. If you want your logistics to be comprehensive, you will have to further expand your vision and go further.
If other protagonists are present in your supply chain -be they suppliers of materials, logistics operators, distributors, customers, etc.- you will have to include them in your planning and action plans. Issues such as controlling how long it takes us to provide a certain recipient with a certain product, the punctuality of our deliveries, knowledge of demand in real time and a host of other variables require your collaboration with these actors.
spatial integration
The geographic location of our partners, suppliers and customers is also a critical strategic decision. When we talk about taking a broad view of our logistics, these are the kinds of decisions that are made when looking at our supply chain more globally. How close we want to be to them or how far we can allow ourselves to locate ourselves are fundamental points to define our logistics.
strategic integration
Being able to integrate facilities, companies, departments and workers is vital. However, we will not be able to achieve it if we do not have a guide on how to do it, a strategy for all of our actions. That is, we need to know what supply chain we want to be. How we want our logistics to contribute to the type of company we are.
We will not set up the same infrastructure or have the same providers if, for example, we want to compete for the speed of our service than if we want to do it for its cost. It is even possible that we do not use the same types of pallets. The way in which logistics helps define the products of companies has become increasingly evident, in such a way that several of the world’s business giants base part of their value proposition on their logistics qualities.
Situating ourselves at this level of business planning helps us understand how far away the idea that logistics consists of simply moving merchandise from one point to another is. And this is not something that only affects multinationals. Businesses of any size should make sure they have a logistics plan in place so they can define how they want to serve their customers, and then make sure they can deliver on that commitment.
Integral Logistics seeks to improve the service given to the client
Objectives of business logistics
These are some of the objectives and benefits pursued by the implementation of comprehensive logistics:
Implement in our company an overall vision of the operation and importance of logistics. For this, it is key that management is aware of and participates in the need to achieve authentic integral logistics.
Being able to react more quickly to the new needs of customers
customers by having greater control and knowledge of what happens in our supply chain. This also makes it possible to improve the response to possible incidents and problems.
Refine and rationalize processes thanks to an overall vision. Eliminate duplications.
Improve the relationship with customers and suppliers. Both for the effect of closer work and for the improvement in the service offered.
Reduce costs. Knowing our needs better, the times of our chain and having better forecasts should allow us to eliminate unnecessary stock and improve our transport costs without worsening the service.
Improve traceability, visibility and communication between the various players in the supply chain.
Being able to obtain and interpret, in a simple way, reliable and relevant data about our processes to help in making strategic decisions.
Integral logistics is both a philosophy that affects the way we understand our supply chain and a series of concrete actions that put that idea into action. Therefore, to make this comprehensive logistics a reality, it is first necessary to raise awareness among all the parties involved. Secondly, the definition of a strategy that specifies the type of logistics that we want to have. And, finally, define the way in which we are going to guide our processes to make this strategy come true.
The companies that are capable of achieving comprehensive logistics are those that can use it as a competitive weapon against the rest of the market.
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