Some associate the term „logistics“ with trucks on a highway, goods carried by rail, delivered by air freight or on a cargo vessel. Others think of the fascination to walk through a production area where cars are built based on optimized logistical processes. Again others connect “logistics” with the construction of a wind park or with the production of shale gas.
The terms logistics and supply chain management play an important role in many areas and industries. In the following, logistics is divided into the phases provisioning, production, distribution and disposal. A special focus is quite often on the inbound logistics that refers to the provisioning and the production phases. The term “supply chain management” is more comprehensive, taking a look at the processes of the supply chain within a company and including the processes of the suppliers up to the customer.
Logistics and supply chain management areas have to find solutions regarding the trends of a rising globalization of suppliers and production networks and consumer markets, the permanent reduction of the life cycle of the products, the requirement of customer-specific products (s. news 1/2014) and a rising complexity. Further challenges are the increased volatility in the global markets in some regions, a partially more aggressive competition that needs adequate strategies besides cost efficiency and improved services, the digitization and more and more also the growing awareness for energy efficiency and the consideration of climate aspects.
Time, cost and quality are the main priorities of logistical activities. In addition flexibility and sustainability are required. In the past years a lot of concepts have been developed mainly to optimize processes regarding cost and time aspects, e.g. lean production and KANBAN. Following the pull principle and not the push principle any longer has lead to high cost and time savings based on reduced lead times, minimized inventories and an optimized working capital. The use of automated technologies and robots as well as a variety of delivery concepts such as just-in-time (JIT) and just-in-sequence (JIS) in combination with further quality management systems have lead not only to cost and time savings but also to a higher quality of the working results. Also in non production areas robust processes and common standards lead to an improvement of key performance indicators regarding time, cost and quality.
Meanwhile there are many concepts and improvements that focus on a higher flexibility, especially in the production areas. And with the digitization not only the communication between human beings or human beings and machines, but also between machines and robots shall be improved. Big data is used by collecting existing information along the supply chain and by analyzing this data. In this way planning, managing and optimizing the logistical processes are supported. The results are an improved planning and managing of orders, an improved planning and managing of required materials, reduced stocks and less express deliveries due to a run out of required material.
Also regarding sustainability meanwhile there is a variety of concepts. In some industries since years the later disposal of the components is considered already in the phase of product development. There are concepts for a reuse of used parts that lead to savings regarding raw materials and energy. Increasingly the companies use renewable energies and try to improve energy efficiency in the facilities but also within the logistical processes.
Another aspect is that logistics and supply chain management are characterized by a collaboration of different market participants. In some cases logistics service providers even take over tasks that producers don’t see as their core competencies, e.g. the assembling of components. Digitization and the use of new technologies enhance the blurring of branch borders. Industry companies develop and offer digital solutions. Providers of digital products are interested in autonomous driving. In addition new market players arise.
In summary, it can be stated that in all sectors logistics and supply chain management play an important role. Logistics and supply chain management are characterized by a variety of aspects, concepts and methods for planning, managing and optimizing logistical processes and networks. Some aspects have been discussed above. Based on a continuous improvement process and by the use and combination of well-known and innovative methods and technologies existing processes and networks can be optimized regarding time, cost, quality, flexibility and sustainability aspects. Increasingly also energy efficiency and climate aspects are considered. Digitization, the internet of things and big data offer further interesting options and solutions to improve planning, managing and optimizing logistical processes and networks based on information transparency as well as on the development of new forms of work by an increased automation of processes. The whole supply chain and not only the production areas are affected by these changes. Therefore an integrated approach is necessary including applicable organizational structures, adequate human resources development and various forms of collaboration. Working constantly on these topics, making continuous improvements and creating innovations in accordance with the company’s strategy not only strengthen the market position of the single company but also the competitiveness of Europe in comparison with Asia and the United States.
What are your experiences regarding these topics? Are you currently working on these topics ? Do you need any support to improve your processes or do you want to discuss any of the issues raised in greater detail? Please send an email toThis email address is being protected from spambots. You need JavaScript enabled to view it. This email address is being protected from spambots. You need JavaScript enabled to view it. This email address is being protected from spambots. You need JavaScript enabled to view it. This email address is being protected from spambots. You need JavaScript enabled to view it. .