Logistics and Transportation

Friday, March 11, 2011

The Use of Logistics in Goods Transportation

Companies that provide logistic services can significantly reduce your company's spending on goods transportation. While this reduction margin may be negligible in short-distance transportation, it plays a tremendously important role in long-distance transportation.

For companies that perform services in logistics Ukraine is no exception. Like in any other country, these logistic companies plan the most efficient route from intra-city to international scale. In most cases motor transportation of goods is used. When combined delivery by several different transportation methods is used, like, for instance, railway and sea transportation, it is necessary to transport the goods to the place of loading and to the warehouse. Motor delivery is best suited for this purpose, irrespective of what transport will be used afterwards.

In motor transportation of goods the first and foremost stage is the layout of the route. In short-distance transportation routes are usually optimized for the shortest distance possible. When distances are longer, the route is planned with more consideration, and it top priority is convenience, and not the actual distance.

The aforementioned convenience is characterized, mostly, by the abundance of refueling and service stations, places where the driver can rest and get a meal, etc. It is very important to consider the probability of traffic jams along the route, as traversing such traffic-intensive streets may greatly increase the delivery time. Another important element of route evaluation is the scan for potential dangers, including sharp turns and steep slopes.

In long-distance transportation which is most often done internationally, the safety of the goods in transit is an important consideration. For that reason, freight forwarding in Ukraine is an ever-popular service. Transportation companies either accompany goods themselves or employ the services of other specialized companies. Either way, this forwarding agent, who is practically the person that accompanies the goods, can at any time report to the owner of the goods about their whereabouts and current status.

Friday, January 21, 2011

How a Logistics Audit Can Identify Bottlenecks and Improvements for Organizations

An audit is an evaluation of an organization, a specific process or a system. The crucial aspect of an audit is that it is based on an unbiased examination which will provide an objective point of view. In an organization, an audit can be carried out directly either by the concerned department or by an internal audit group or by an external specialized company.

Whether performed in-house or outsourced, there are numerous benefits for companies conducting audits such as establishing sustainable quality standards and providing constant access to reliable information. Audits will support strategic and managerial decision making and help identify areas for improvement and eliminate inefficiencies.

A professionally carried out audit and subsequent implementations will improve efficiency, drive sustainability and help the corporate image of an organization in the eyes of internal or external customers and shareholders.

For the purpose of this article, we will focus on a specific field among the wide scope of audits, which is the Freight Logistics Audit. The goal of a Logistics Audit is to objectively examine a company's existing logistics and transportation operations and flows, assess the efficiency of the systems and processes in place and to provide the organization with recommendations and guidelines on its Supply Chain and freight management.

A Logistics audit will invariably start with gathering quantitative and qualitative data from key stakeholders and with analyzing and interpreting this information. The main departments collaborating in data collection and interviews will typically be Logistics and Transportation as well as Warehousing, Purchasing, Production, Trade Compliance, Customer service and IT departments. All these departments are involved directly or indirectly in the supply chain and can provide a valuable insight on the situation as well as benefit from the outcomes of the audit.

The gathered and analyzed information will be transferred to as-is process, documentary and physical flows maps to provide a clear understanding and help evaluate the entire process in order to identify any inefficiencies, bottlenecks, and waste(1). The audit team will then provide suggestions for improvements and modifications summarized on "to-be" maps and adequately prioritized. Specific recommendations, action items and risk assessments will accompany these suggestions and solutions to help with their implementation. The gathered data will be used to back-up findings, quantify logistics costs and potential savings through data analysis and benchmarking.

A freight logistics audit will generally cover both inbound and outbound transportation as well as other logistics related activities such as stock management, warehousing or trade compliance. Typical findings will generally relate to the (without being limited to) logistics sourcing strategy, customs compliance performance, HTS management, freight optimization and consolidation, order and stock management, ERP and logistics systems interaction, process streamlining and unification, premium transportation limitation and regulation, logistics provider portfolio strategy and contract management.

Logistics & Transportation Industry is under pressure to meet greater customer expectations, improving return on assets, minimizing costs, optimizing capacity and promoting operational excellence. The industry is at the forefront to adopt new technologies to facilitate time specific delivery and electronic tracking. In this rapidly changing environment, it is imperative to ensure that investments help to rationalize costs and provide the intelligence to optimize inter-modal flows.

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Tuesday, January 4, 2011

Logistics Engineering

Logistics engineering mainly deals with the application of engineering methods to solve logistics problems. Logistics is the science of planning, organizing, and executing activities for delivering the required goods or services to the right location at the right time. Logistics engineering supports every stage of an activity to satisfy customer requirements.

Modern technologies, communication links, and control systems are essential to manage materials, services, and financial goals. Logistics engineering help to improvise new materials to suit the situation for a cost effective performance. Strategy management, research methodology, industrial engineering, supply chain management, quality assurance, and systems simulation and modelling are integrated in the logistics engineering field. This linking supports the functional area of logistics such as procurement, maintenance, transportation, disposition, and distribution.

Asset tracking and e-logistics used in the field of logistics management increase the efficiency and reliability of the distribution process. The method to trace the status of ordered products increases confidence among the customers. Analytical models and computer simulations help to improve overall performances. The proper implementation of logistic engineering processes ensures operational reliability, less maintenance cost, personal safety, and customer confidence. Designing of new products with high quality and less cost is recommended in logistics engineering. Maintenance planning using modern technologies of troubleshooting and built-in test equipments aid in providing speedy and accurate maintenance services.

Automation of system helps to upgrade the production process. Implementation of industrial engineering in the logistics management increase quality and quantity of production. Manpower requirements are reduced due to logistics engineering and help to lower the cost of production too. This helps to assure business objectives globally. Logistics engineering help to rationalize the process of logistics services, improve customer satisfaction, and save budgets of business dealings.

Monday, January 3, 2011

Transportation and Logistics - That Shipping Software Totally Sucks

One day as I started checking my emails, I briefly skimmed through the subject lines of over 100 of them. They all seemed to be typical emails, I mean people looking to set up appointments, asking questions about their supply chain, and trying to ensure their product is safe.

As I neared the bottom of the emails one subject line caught my attention. It read, "Logistic Software Sucks...!" Naturally I was quite curious, as I am a definite proponent of Freight Software. As I started reading the email I could tell the tone on the other end was very bitter, and angry. The writer went on to say that he felt cheated, because the company that he was going through was charging him for the software system that he was using, and he didn't feel as if there was any real value. He went on to say that when he met with the Sales Person he explained to him that he wanted something state of the art, that wouldn't become obsolete within the next couple of years. The sales rep assured him that he had just the thing for his company.

As it turned out, the customer had spent in the neighborhood of $2500.00 for this software system, and he really didn't use any of the features. The software was definitely top of the line, and had all the "bells and whistles" that any large company would had loved to have in their possession. This customer was very upset with his purchase. It was to the point wherein I felt that I needed to pick up the phone to call him back. We chatted for awhile, and I think he vented and felt better, but he did feel that his purchase was a waste. I helped him by showing him the best way to hide many of the features that he had no need for, and take advantage of the features that he did need.

The customer swore to never use this company again, and that he would tell all of his business colleagues how cheated he felt.

For companies who are of small to medium size($75k - $5 million), typically a standard software system will be robust enough for their supply chain needs. It is easy to see how a customer can get caught up in the "cool" sizzle of a product, especially during this age wherein you can get software to perform many different tasks. However, there are some basic features/values that a shipper needs to focus their attention on when it comes to Logistic Software.

1) Ease of Use- The system needs to be easy enough for anyone in the warehouse to use without hesitation. The strongest software systems these days are basically point and click. The sizzle, is put into the information and reports, that can be generated, and not how "cool" the site looks.

2) Time Savings- This shouldn't surprise anyone, because these days "time is money" and the warehouse personnel typically has multiple job dulties to get done before they punch out. Being able to navigate and process shipments with quickness and efficiency is a top priority.

3) Cost Savings- Nowadays, just getting a great software system is not enough. If your system doesn't come equipped with stellar rates then you need to seek out another provider. Seeking the services of a strong 3PL can help in both these areas.

4) Creating and Quoting All Types of Loads- Your software has to be able to allow you to create a Bill Of Lading on the site quickly. Gone are the days of filling out manual bills to give to the carriers. With top software, it should allow for you to create and send via online, or at the worst case scenario, send it through a fax.

5) Tracking and Tracing- When I think of this feature I think of my first company that I worked for, Fedex. They took this concept and reinvented it several times over. The idea of tracking and tracing is not just an extra, nowadays, but a must. Freight carriers, small package carriers, Freight Forwarders all have to be on top of their game when it comes to having tools to locate a customer's package, or they will not keep the business. Along with this, is also being able to get a POD (proof of delivery) online as well.

6) Claims- Although this is a sore subject for many customers in the shipping world, the reality is that bad things happen to shipments. A good software system will allow the customer to file a claim online, as well as getting feedback from that very same portal, regarding the progress of the claim.

Saturday, January 1, 2011

Logistics - Using Motor Transportation

Companies that provide logistic services in Ukraine can significantly reduce your expenditure in goods transportation.

And even though in case of short distances this reduction is negligible, in case of long-distance transportation its significance becomes obvious.

Logistics companies usually provide services in both actual transportation from source to destination and additional support.

When motor transportation of goods is used, the first and the most important stage is to choose a route. When distances are short, the most important issue is choosing the shortest route available. Yet at longer distances the route requires more consideration and the convenience of the route may be even more important than its actual length.

Route convenience is characterized by, first and foremost, the availability of refueling and repair stations, places to rest and have meals. It is very important to watch for traffic jams along the way as traversing such streets may result in a significant increase of delivery time. No less important a factor is the potential danger of the road - it has to do with abrupt turns and dangerous slopes.

Using logistics in Ukraine one can construct the most efficient route, both inside the city and between cities. In the majority of cases motor transportation is used. If combined delivery is used, for instance, in railway and sea transportation, it is necessary to deliver goods to a port and to a warehouse. Motor transportation is best for this, no matter what transport you plan on using further along the route.

A very important factor in goods transportation is the accompanying freight forwarding in Ukraine. This service is especially important for international shipping.

When goods are transported over long distances, especially when they are transported between countries, a temporary warehouse is imperative for smooth operation. Such warehouse should provide verification of transferred goods and accompanying documentation. This stage is very important as the future safety of goods depends on the correct choice of the temporary warehouse now.

These factors help to plan the route in the most efficient manner thus improving goods safety from possible damage and dramatically reduce the delivery time.

Tuesday, December 21, 2010

Business Logistic

The dictionary defines logistics as ?The time related positioning of resources.? Hence, logistics can be considered as an implement for getting resources such as products, people, and services as and when they are needed. It is not easy to manufacture any product or promote it without proper logistical support. Business Logistics entails the amalgamation of information, conveyance, inventory, storing, handling of material, and packaging. The functional responsibility of logistics is the geographical relocation of resources, work in progression, and finish inventories at the lowest charge achievable. Hence, logistics involves creation of ?people systems? rather than ?machine systems?.

Business logistics as a concept developed only in the 1950s. It was evolved because of the increased complication of supplying business ventures with materials and transportation of these finished products in a global chain of supply. This management is increasingly realized through experts in the field of business logistics. Logistics in business focuses on the flow either internally or externally of the business venture.

The main task of a logistics manager involves procurement, transport, storage, and organizing the execution of these proceedings. Logistics managers have to typically merge a general awareness of each of these operations so that there is a coordination of resources in an organization.

There are two essentially different forms of logistics. One optimizes a fixed flow of substance through a set of connections of transport links and storage space. The other form enables the synchronization of a series of the performing assets to carry out a specific venture.

Effective business logistics augments the competitive position of a business. It contemplates the tools of logistics management but concentrates on the relationships that are required to be built through the supply chain to release the latent potential.

The doctrine of business logistics can be practiced on any organization, regardless of size, in public or private sector, in domestic or international scenario as well as in service or manufacturing industry.

Tuesday, December 14, 2010

Score Card Improvement for Vendor Compliancy: Can Logistics Software Help?

There are two obstacles encountered by manufacturing companies as they aim for higher sales: improving their products, and achieving scorecard improvement for vendor compliancy. If your company does business with smaller retailers and smaller corporations, you may think that vendor compliancy isn't much of an issue. But, if you aspire to sell your goods through major retailers or to big corporations, meeting vendor compliancy could even require you to change some of your basic business practices, including how you handle your shipping process.

Scorecard Improvement for Vendor Compliancy and Shipping Logistics

The complexity of compliance standards among large businesses is reflective of the chaos that would occur were they not in place. When a business has relationships with hundreds or thousands of vendors, it needs to standardize its vending process to make the reception of and payment for products as efficient as possible. At smaller businesses, a lower volume of vending relationships means that vendor standards needn't be as stringent. For example, smaller businesses usually don't have as many rules about how goods are labeled, packaged, and delivered as large businesses do.

The biggest reason why manufacturers avoid vending with large businesses is the cost of implementing infrastructure necessary to meet complex compliance standards. But, considering the sales power of selling goods through major retailers and to large corporations, a better cost saving strategy is to look for less expensive ways to get the infrastructure you need, one of which could be the implementation of logistics software, also referred to as freight management software. Logistics software aids in the vendor compliance process in two ways: it can secure the labeling, packaging, and delivery arrangements required by tough compliance standards, and it can do so at a fraction of the cost of other shipping logistics methods.

In addition to using logistics software, companies also rely on in house logistical departments and third party logistics (3PL) to meet shipping related compliance issues, both of which are more expensive-and often less comprehensive-than freight management software. Freight management software achieves its economy by allowing companies to become their own logistic providers without hiring logistic experts, or hiring 3PL providers that essentially serve as middlemen. Freight transportation software is priced as software as a service (SAAS), making it the most affordable way to receive full-scale logistical services. One year after implementation, most companies reduce their annual shipping cost by 10 percent, savings that make additional compliance measures more affordable.