Logistics optimization: focus on all processes that show potential for optimization
In many companies, behaviors and processes that are not optimal become established over time. However, especially with regard to logistics, it is important to regularly put all parameters to the test. This is the only way to identify weak points, recognize inconsistent processes and thus improve processes in the long term.
This is exactly where logistics optimization comes in, because it creates clarity and transparency about how costs can be saved.
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Definition of logistics optimization: What is understood by this term?
The term "logistics optimization" is not uniformly defined; many players understand something different by it. Nevertheless, there are commonalities that describe well the goal of this process. Accordingly, logistics optimization is 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 concerns warehousing is put to the test in logistics optimization. For this purpose, target values are defined in order to 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 a 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 provide you with an overview of the areas that are affected by this.
Sayings such as "In purchasing lies the profit" not only have a meaning in business management, but are also evident in logistics processes. In procurement, it is not only the purchase of goods and the receipt of goods that are important; the provision of goods in line with production requirements and their onward transport are also regarded as critical to success. Logistics optimization focuses on the expenditure side and measures performance in order to identify options for action.
Warehouse and logistics optimization go hand in hand, with all warehouse areas being identified and so-called heat maps created. By taking this look at supply chain processes, you can find 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.
Picking, packing and shipping are the focus of attention here as part of logistics optimization. Unlike in the past, where packing optimization was not considered due to the effort involved, today precise added value can be generated through data preparation. The use of modern warehouse management software is essential for this.
Schematic process of logistics optimization
Since the focal points can be set highly 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 a holistic analysis is missing. Nevertheless, there are basic steps that structure logistics optimization:
Analysis of the ACTUAL situation
Logistics optimization begins with a look at the status quo. How are goods distributed and stored? According to which principles is the bearing layout designed? What are the systemic peculiarities, limitations and so on? All processes that are part of the value chain are considered here and presented in a uniform manner. As part of an on-site survey, material and information flows are examined, warehouse technology and space utilization are recorded, and processes are observed.
After that, data is collected on the flow of goods, operating data, costs and time spent. In this way, targets or optimum values can be defined that make all subsequent logistics optimization measures measurable.
Identification of the optimization potential
The next step is to identify and describe weak points. The focus here is on access rates, travel times and the like. Likewise, KPIs are included that have been defined in advance.
Development of a catalog of measures
The resulting measures are roughly outlined and designed so that they can be quantified and prioritized. Different approaches need to be discussed in order to be able to proceed to the detailed conception. How are effort and effect related? Which stakeholders need to be involved in the process? Such questions help decide how to proceed.
In short, logistics optimization creates an overview and makes it possible to make well-founded decisions regarding concrete measures. The more efficiently logistics processes can be designed, the greater the impact on production costs. For this reason, logistics optimization not only analyzes material and goods inventories, but also takes a differentiated look at travel times and material flows as a whole.