If our goal on the flexis AG blog to educate our readers about the pressing issues in global manufacturing and supply chain management, then today’s entry is right on par with that mission. Transport logistics, though a critical element to a manufacturing supply chain management strategy, is perhaps one of the least discussed aspects of SCM. While an underutilized element of administering a successful value chain, transport logistics (or the manner in which companies move finished products from the production room floor to the customer’s door) is the last crucial link in fulfilling customer expectations and ensuring production programs are executed to their fullest extent.
It’s somewhat difficult to understand why transport logistics often gets lost in the fray of global supply chain management. Perhaps it’s because more emphasis is placed on operations at earlier stages in the value chain such as planning and procurement. Or perhaps it’s because the facilitating of effective production programs is often at the forefront of the minds of planners and managers. Either way, transport logistics, though often neglected, can either be a significant boon or detriment to how effective a manufacturing company conducts itself.
While there are a number of factors that account for this fact, the truth is manufacturing companies must realize the value and importance of transport logistics, especially in variant-rich industries with diverse partner networks and disparate production facilities across the globe. With this in mind, let’s examine a FAQs (frequently asked questions) about transport logistics and their corresponding answers to better understand how companies can leverage such a strategy into a competitive advantage.
FAQ #1: Can transport logistics actually help reduce costs and optimize transport processes?
Yes. Because transportation is not a fixed cost, coordinating a transport logistics platform where planners and managers have increased visibility and transparency into the constantly shifting variables is key to reducing overall transportation costs and optimizing the output of resources to ensure the best return in both efficiency and revenue. History is instructive, and manufacturing companies who can gather, sort, analyze, and review previous transportation data are better equipped to explore areas where costs can be reduced and optimized for more effective future transport planning. A transport logistics solution gives planners and managers the power to uncover areas of waste in their transportation strategy (container levels, fuel consumption, inaccurate routing processes, ineffective distribution and warehousing networks, and long lead times between warehousing and delivery) to deploy more lean methods of transportation and avoid bottlenecks or breakdowns in the transit stage of their value chain.
FAQ #2: Transport logistics doesn’t integrate with Industry 4.0, does it?
Actually, yes, transport logistics is part and parcel of an integrated Industry 4.0 platform. Because Industry 4.0 relies heavily on intelligent solutions communicating data, reporting, and notifications in real-time, Industry 4.0 is perhaps a perfect fit for transport logistics in terms of identifying changing variables in transportation constraints and addressing these variables before they result in breakdowns or bottlenecks. In addition, because transport logistics is often reliant on a large network of partners, stages, or processes, integrating Industry 4.0 into a transport strategy is a seamless way of connecting these disparate points into a cohesive system or architecture whereby all the important players can communicate, collaborate, and respond to transport logistics events with little or no lead time. No longer are manufacturing companies operating their transport logistics strategy on outdated data or irrelevant communication threads. Today, Industry 4.0 allows these functions to take place in the moment between as many players as necessary.
FAQ #3: How do transport logistics allow for adaptations in operational shifts?
Imagine a certain production program is scheduled to produce X amounts of units that need to be transported to a certain distribution facility by a certain date. However, unforeseen changes to said production program means a significant reduction in the number of units, which directly impacts transport capacity. Where before a manufacturing company had budgeted enough space to move X amount of units, this reduction either means a longer lead time to when a full truck/container can be shipped, or an inefficient use of capacity whereby a half or less than half truck or container is utilized. However, a transport logistics strategy and solution gives planners and managers the power to adapt to these operational shifts by identifying the best routes, transport modes, and delivery windows to avoid incurring losses in resources and time in addressing these changing variables. In addition, a transport logistics solution allows manufacturing companies to engage in simulations and what-if scenarios to plan accordingly for such events.
FAQ #4: At the end of the day, do transport logistics actually result in better customer relations?
Without doubt. The value of a transport logistics solution in enhancing customer satisfaction and service cannot be overstated. While the value proposition internally for manufacturing companies should now be quite apparent, the value externally or in a customer-facing avenue should be easily visible from the start. A company’s ability to provide the right product at the right time in the right place is paramount in driving a positive customer relations platform and increasing a company’s client base and footprint. Because a transport logistics solution provides planners and managers the power to ensure the right products arrive in the right condition at the right moment, customers will not only be more apt to work with a given manufacturing company in the future, but said manufacturing company will also create more stable and productive business relationships with partners in their supply networks.