Logistics Optimization and Three Important Tips for Optimization
In almost all industries, the most important activity to improve efficiency and increase profit is process optimization. Logistics is no exception. In this article, we explored logistics optimization solutions and examined optimizing logistics processes with a report from JDA Software Company titled "Three Principles of Transportation Optimization".
Logistics Optimization According to JDA:
The main activity of the JDA software group is in the development of supply chain management software, and they are a global leader in this field. The report presented by this company begins with the following statement:
We have taken steps to help invest in this field and use transportation management systems by highlighting logistics mistakes.
The three fundamental principles of logistics optimization according to JDA are points that logistics management systems must adhere to. These points are:
- One size does not fit all
- Details matter
- Most importantly, correlation and synchronization
Nowadays, with companies, especially online stores, striving to reduce order delivery times and turn this into a competitive advantage, the demand for logistics management systems has significantly increased. On the other hand, with pressure on logistics industries to reduce costs, expand coverage, reduce carbon production, and optimize logistics processes, agile and flexible fleet management systems with acceptable performance are in high demand. However, despite this urgent need, many companies struggle to find the right solution. We recommend referring to the article "Choosing Fleet Management Software" for making the right choice. Next, we will examine the 3 points mentioned in the JDA report.
1. One size does not fit all!
With numerous variables and constraints in the field of transportation and logistics, problems are not only not fully resolved but may become larger! To solve these problems in the short term, companies must employ both empirical and scientific methods and make logical decisions. Logistics management systems must have flexible settings that can be customized to meet the needs of each business. However, in doing so, various constraints and variables should not be forgotten!
2. Details matter
[caption id="attachment_103" align="aligncenter" width="800"]
Details - Transportation[/caption] The complexity of planning and execution processes in logistics has made logistics software that pays more attention to details very popular. Of course, an easy user interface becomes particularly important in this regard. Another important point is the difficulty of planning processes. The furthest timeline in logistics usually does not exceed a few weeks, and precise planning can typically only be done for the upcoming days or hours. For this reason, planning and execution are often carried out in parallel. Keep in mind that:
The more accurate your choice, the more accurate future planning will be, and there will be no second chance!
Logistics managers must make the best decision from the start to achieve maximum value and real impact. In many cases, you can achieve a satisfactory result with several different solutions. In such cases, you should choose the cheapest possible solution. However, to ensure this, you must be confident in the accuracy and precision of the information provided by logistics management systems.
3. Most importantly, correlation and synchronization
Distribution factors can only rely on systems for logistics optimization that consider all elements of a problem.
- Various strategies
- Small and large details
- Levels of accuracy in the system
- And more...
These are factors that must be applied instantly and simultaneously to achieve the best result. Systems that cannot control various problems or prerequisites may incur high costs and serious issues. For example, excellent dispatch management systems must have the ability to simultaneously control all aspects of a problem. Aspects such as:
- Order rates and quantities
- Optimal routing
- Dispatch planning and scheduling
- Considering fleet capacity constraints
- And more...
Ambev, a Successful Example of Optimized Logistics
Ambev, a partner of Pepsi factories, exports its products to 14 different countries. Eric Noaous, the logistics manager of this company, talks about the performance of the optimization system implemented in this company:
The logistics optimization system guarantees the best performance of our company!
He recounts the benefits of logistics optimization systems as follows:
- 100% return on investment within 12 months
- Improved brand penetration and expansion
- Increased employee and fleet productivity
- Better scheduling and planning
- Reduced time costs
- Reduced costs and improved customer service
- Better logistics and transportation efficiency and effectiveness
- And more...
Conclusion
In an era where cost flows are under strict control and supervision, companies only invest if they are sure of profitability. Logistics optimization systems are no exception! By choosing the right transportation management solution, a business can easily achieve a suitable and significant competitive position. Transportation and logistics optimization systems must be highly flexible, adaptable, and changeable, and they must provide the capability for managers to access all details and solve problems simultaneously and integrally while executing processes.
