Logistics optimization: focus on all processes with potential for optimization
In many companies, behaviors and processes become established over time that are not optimal. However, when it comes to logistics in particular, it is important to regularly review all parameters. This is the only way to identify weak points, recognize inconsistent processes and thus improve processes in the long term.
This is precisely where logistics optimization comes in, as it creates clarity and transparency as to how costs can be saved.
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Definition of logistics optimization: What is meant by this term?
The term "logistics optimization" is not uniformly defined; many players understand it differently. Nevertheless, there are similarities that describe the aim of this process well. Logistics optimization is therefore a process that can be used to improve processes within logistics and eliminate structural deficiencies. It often resembles an audit that focuses on all sub-areas and reveals where weaknesses exist.
In short, everything that affects warehousing is put to the test in logistics optimization. On the one hand, target values are defined in order to subsequently classify the results of the analysis according to qualitative and quantitative factors. The measures derived from this are then of a small-scale, practical nature - they relate to the optimum ratio of capacities available to the company in the warehouse, for example.
Structure of logistics optimization: How does this process work?
As a rule, logistics optimization is not a one-off, detached process, but is characterized by a regular review of the most important logistics areas. In the following, we would like to give you an overview of the areas that are affected.
Procurement
Sayings such as "The profit lies in purchasing" not only have a meaning in business management terms, but are also evident in logistics processes. Procurement is not just about purchasing and receiving goods; the production-ready provision of goods and onward transportation are also critical to success. Logistics optimization focuses on the expenditure side and measures performance in order to identify options for action.
Goods handling
Warehouse and logistics optimization go hand in hand, with all warehouse areas being identified and heat maps created. By looking at supply chain processes in this way, you can identify cost drivers that can then be analyzed in a targeted manner. It is also about optimizing the warehouse and article structure, reducing walking distances and ensuring smooth material flows.
Dispatch processing
The focus here is on picking, packing and shipping as part of logistics optimization. Unlike in the past, where packing optimization was not considered due to the effort involved, data preparation can now be used to generate precise added value. The use of modern warehouse management software is essential for this.
Schematic process of logistics optimization
Since the focus can be set very differently, there is a lack of uniform processes for logistics optimization. It is conceivable, for example, that a company only focuses on certain sub-areas, which means that there is no holistic analysis. Nevertheless, there are basic steps that structure logistics optimization:
Analysis of the current situation
Logistics optimization begins with a look at the status quo. How are goods distributed and stored? According to which principles is the warehouse layout designed? What systemic peculiarities, limitations, etc. are there? All processes that are part of the value chain are considered here and presented in a standardized manner. As part of an on-site survey, material and information flows are examined, the warehouse technology used and space occupancy are recorded and processes are observed.
Data on the flow of goods, operating data, costs and time expenditure are then recorded. In this way, targets or optimum values can be defined that make all subsequent logistics optimization measures measurable.
Identification of optimization potential
The next step is to identify and describe weak points. The focus here is on access rates, travel times and the like. KPIs that were defined in advance are also included.
Development of a catalog of measures
The resulting measures are roughly outlined and designed so that they can be quantified and prioritized. Various solutions need to be discussed in order to be able to move on to the detailed design phase. What is the relationship between effort and effect? Which stakeholders need to be involved in the process? Such questions help to decide how to proceed.
In short, logistics optimization creates an overview and enables well-founded decisions to be made regarding specific measures. The more efficiently logistics processes can be designed, the greater the impact on production costs. For this reason, logistics optimization not only involves analysing material and goods inventories, but also taking a differentiated look at travel times and material flows as a whole.
