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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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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.

Monday, December 6, 2010

Transportation and Logistics Software - What Are Its Advantages?

If you are a small to midsize company that tries to ship your goods without the aid of transportation logistics, you'll likely end paying significantly more for shipping than you would if your hired a third party logistics (3PL) provider or implemented online transportation and logistics software. Without the aid of freight logistics, the cost of the shipping process can prohibitive for small to midsize companies for two main reasons: they either pay full truckload FTL shipping (full truck load) rates to ship partial loads or, realizing the economic disadvantage of FTL shipping for partial loads, they use parcel shipping, which is also a disadvantage when shipping multiple parcels on a regular basis. In response to these situations, 3PL and transportation and logistics software can revolutionize a company's sipping costs by providing them with options such as LTL shipping (less than truckload), integrated transportation methods based on competitive pricing and shorter shipping routes based on route analytics.

But while 3PL and logistics software function in the same capacity, the latter has two basic advantages over the former, beginning with price differential.

Price Differential

Although 3PL and logistics software companies serve the same purpose, they are principally different in their corporate make up. Third party logistics providers are freight logistics experts that act as middlemen between manufacturers and shipping companies, while logistics-software providers are freight logistics experts that specialize in creating freight logistics software, which they offer as an online software application for an affordable monthly fee. In other words, when you opt for 3PL, you end up paying more because you pay for an expert to manage your account, whereas logistics software lets you manage your own freight logistics through an easy to use interface. Essentially, 3PL providers make their money by charging you for a logistics service that you could easily perform on your own with the aid of logistics software. It's as simple as that.

Level of Control

When you outsource a service that isn't one of your company's core competencies, you're naturally at the mercy of the company that you outsource to. This is not to say to that 3PL providers are out to profit on their clients' lack of logistics expertise in an ulterior way. But it does mean that 3PL providers are always looking for LTL shipping rates and other shipping options that offer the greatest price differential between what the options actually cost and what they charge their clients to secure those options. In some cases, the greatest price differential might result from shipping your goods with a company that doesn't have the best reputation; a situation that you could easily avoid if you opt for logistics software. In addition to allowing more control over what companies you ship with, logistics software also allows each of your company departments to participate in the shipping decision process by accessing the software online, which can prove extremely valuable from an accounting and management perspective.

Thursday, November 25, 2010

Logistic Straps Secure Cargo for Transport

A logistic strap is a must have for any person or company that ships, transports or delivers cargo, whether across town or across the globe. These devices are must-haves to ensure safety and minimize damages. They are vastly superior and easier to use than lashing cargo with ropes or chains and are much less likely to harm valuable items.

There are a few differences in design to consider when choosing the right logistic strap. One of the main differences is the mechanism for actually tightening the strap around the item that's being secured. There are two tightening systems available, the cam system and the ratchet system. The cam system operates by running the strap through the cam to tighten the strap. The clasp on the cam will grip the strap and will remain taught until released by the user.

The ratchet system comes in two separate pieces. This works by feeding the longer strap through the ratchet on the other piece. Once the two ends are connected to the anchor points, the strap is tightened using the ratchet lever. This system results in a very tight and secure lashing. The ratchet is released by simply pulling the release tab and opening the ratchet. It takes a little longer to get used to the ratchet system, but once mastered, it is quicker and more secure system than the cam design.

The other main variable in logistic strap construction is the method by which the strap connects to the anchor points on whatever the cargo is being secured to. These end fittings come in several different formats. Many end fittings are hooks such as j-hooks, flat hooks or snap hooks. The most versatile logistic strap is one with end fittings designed for use with what is referred to as airline track. These tracks allow the logistics strap to be anchored anywhere along the length of the track as opposed to a fixed anchor point.

Thursday, November 11, 2010

Logistics Companies

Logistics companies provide logistical solutions for organizations. In the manufacturing industry, this usually includes warehousing, transportation, and distribution. Manufacturers need to concentrate on their core business and therefore outsource other functions to logistical companies. These companies work on a contractual basis and are called third party logistics provider.

Logistics companies are generally asset-based and operate a large fleet of delivery vans, trucks, ships, and cargo planes. Many third party logistics companies operate in the United States today. Their basic function is to transfer goods from point A to point B in the most efficient way. These companies specialize in providing logistical support to clients and regularly upgrade their equipment based on available technology. Some of these companies operate a large fleet of aircraft, in some cases, even more than commercial airlines. These companies also operate large automated warehouses to store goods during transportation and distribution.

There are also fourth party logistics providers who only use computer systems and intellectual capital. These companies design and implement all the logistics needed by an organization.

Logistical companies improve the operational efficiency of organizations by allowing fast movement of goods and services. Both, third and fourth party logistics providers work closely and share critical information, in order to constantly improve the existing system of logistics. Data is collected from every component in the supply chain. This data is then analyzed and changes are made, if necessary, to ensure the smooth flow of goods.

The number of companies providing logistical support has grown over the years. Due to stiff competition, companies are turning to logistics companies for help. Automated systems used in supply chain management have helped in saving time and reduces the danger of damage to goods. Today almost all organizations big or small depend on these logistics providers for their operational needs.

Wednesday, November 10, 2010

Integrated Logistics Solutions - Experience Makes Things Better

If the company manages the logistic services by themselves, things would be very difficult and extra expenses would occur.

Integrated logistics services include transportation, handling of over-dimensional and heavy lift cargo, equipment leasing and rental, port operations, customs clearance and international freight forwarding.

All these various services are provided by one service provider, rather than outsourcing it to different companies.

If it is outsourced to different service providers the coordination and effectiveness of the work would reduce. It will become really difficult to manage and many problems could occur. There are many logistic firms that provide integrated logistics services so that the outsourcing company is at its ease.

The common facilities that usually an integrated logistic firm provides are as follows:

• Logistics network design
• Order fulfillment and distribution
• Consolidation and deconsolidation
• Transportation outsourcing
• Reverse logistics

Basically integrated logistics service provider will help you to organize and manage every area associated to transportation of goods. Selecting the mode of transportation is always very important and essential.

The service rates normally differ on two aspects:

• The area where the goods need to be transported.
• It also depends on the weight of the consignments to be shipped.

Integrated logistics service provider would take every possible effort to deliver the consignment to the desired destination within the time promised.

An experienced service provider will have the required tools and machines to take care of your shipments, so that they are easily moved and carefully handled as this helps to avoid damage to the goods. Specialized tools are present to pack the goods effectively, workers are given material handling training to avoid mistakes and deliver the goods safely.

If goods were to be transported by the company itself surely there would occur some or the other problem because of which the goods would get stuck at the customs. Thus Logistic firm will have all the required documents ready on time to avoid the possible error or stoppage at the custom office. Thus goods get cleared easily at customs.

Therefore, Integrated Logistics Solutions provider will help to let you have everything at one roof and in much more systematic manner. So always choose to have an integrated logistic service provider for better service and better satisfaction.

Monday, October 25, 2010

A Rundown On Logistics Vs Transportation

Two of the most important sectors that help move a country's economy are logistics and transportation. Both are important cogs in the wheels of economy since they help bring in and distribute goods and materials. For example, if there is shortage of wheat and rice in Malaysia or Vietnam, other South Asian nations can help in providing supplies to satisfy the need.

Logistics and transportation are two words closely related to each other. As a matter of fact, with the example given previously, both processes are done hand in hand. But the question is can one really survive without the other? Or is there no absolute difference between the two and that both logistics and transportation are referring to the same entity?

Transportation refers to the means of distributing goods, supplies, resources, information, people, and energy from the original point to the destination point using any of the five modes of transport: animal-drive, air, road, rail, and water, or a combination thereof. Since transportation is concerned only with moving the supplies, someone has to take care of handing, packaging, managing the time the goods are fetched and delivered, and maintaining coordination, especially when inter-modal or a combination of two or more transport modes is used. That's when logistics comes in.

Logistics is defined as the process of managing goods, supplies, resources, information, people, and even energy from the source to the user. Any country can testify how important logistics is for its health. Logistics is not just a company that gets your airmails delivered promptly. Logistics is found in every department of a government, from the military to health agency, from education to infrastructure agency, and of course, the time-conscious world of commerce. This application of logistics is more popularly known as business logistics.

Business logistics, unlike military logistics where the concern is focused more on speed and quantity, is more concentrated on delivering the exact item, at the ideal time and place, at an ideal price, using an efficient amount of energy, man power, and financial resource. It is the business of most couriers in the world.

While most couriers have their own vehicles, such as air planes, ocean jets, trucks, and ferries, it is not really necessary for business logisticians to have their own means of transportation. In cases like this, trucking or shipping service providers are hired to distribute the commodities.

For example, in sending goods to a country where air travel is not available, the courier gets the services of a shipping company, and additionally, a trucker to help in delivering the goods once the ship has arrived. The courier has the responsibility to choose which ship and truck provides the fastest yet efficient handling of the supplies. A courier might also need a place of storage or a warehouse company, especially when there is a need to stock the goods while waiting for the trucker. Most shipping companies, however, do have their own warehouses.

Just lately, truckers and shipping companies have begun adapting logistics as part of their business operation. This raises the question then as to which service to avail of when sending goods. Should one go for logistics or transportation companies?

Whether one chooses logistics over transportation, the answer will have no difference. See, even transport companies employ logistics to their business operations. Both indeed must go hand in hand in order to achieve secure and efficient delivery goo

Logistics and Transportation