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The quest for efficiency in distribution logistics

Posted by SI-LOG on 15/03/2019

The quest for efficiency in distribution logistics

SI-LOG 15/03/2019 pubblicato in english, transport

It is one of the most important goals of a company, even if its meaning is not always clear. We talk about the strive for efficiency in distribution logistics, which is the relationship between the costs necessary for a process and the benefits generated, between the resources initially used and the quality of those shipped

Having become such a pivotal sector for the success of a business (even more so with the advent of internet), it is of the upmost importance that those involved in the logistics distribution process have exceptional organizational skills, as well as transversal key competences (which can vary from IT to statistics) and be able to dialogue and collaborate with all stakeholders involved, from logistics operators to suppliers to end clients.

This article explores the issue of efficiency within the world of distribution logistics: to achieve a high level of efficiency in the distribution logic, it is necessary to meet certain criteria, called "drivers". Good logistics performance is an essential component of stimulating economic development. And this is what we found.


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Drivers for logistics efficiency

  • Total distance covered by the vehicles. It is a priority and geared at reducing empty kilometers. Less empty runs, fewer costs and more efficiency. To achieve such a goal, it becomes indispensable to elaborate the shortest and most suitable routes to balance the flow of the various shipments. This of course applies if the logistics is undertaken by the company itself, and if it is outsourced to third parties: in the first case the costs due to inefficiency fall on the company and in the latter case, the supplier is accountable for any costs due to potential bottlenecks. In addition, greater use of 3PLs, usually offers better benefits and may actively help reduce spikes in freight rates.

  • Saturation of the vehicles. It is necessary to analyze the composition of the load, making the most of its volume and weight without compromising the speed of the shipment. Furthermore, it should not be forgotten that the saturation of the means contributes not only to cutting costs, but also to reducing the environmental impact of logistics processes.

    The capacity crunch has arrived, and shippers are scrambling to find ways to make a profit in logistics. The wrong strategy or blend of transportation modes will result in losses, and since consumers only see product costs through Amazonian eyes, increasing product price points and shipping charges is unacceptable. Since full truckload shipments are only traveling to one destination, fewer stops translate into faster delivery. Fewer touch points reduce risk, and since marginal risk derives from the time it takes to arrive at a destination, which is expanded in perishable freight, full truckload reduces risk. It is also important shippers understand the characteristics of full truckload freight, which can be used to make freight more attractive to carriers as well. Taking advantage of full truckload requires shippers to know when it is better to use full truckload than other modes. This means understanding freight characteristics that should denote use of full truckload, which include the following:

    - requires specialized equipment to transport;
    - high-volume or high-weight freight;
    - freight in need of faster delivery;
    - high-volume destination. 


What is reserved logistics?

Reverse logistics stands for stands for all operations related to the reuse of products and materials.

It is “the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. It moves in the opposite direction to the traditional one because it starts from the final goods and analyzes the production process backwards. Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics.”

The reverse logistics process includes the management and the sale of surplus as well as returned equipment and machines from the hardware leasing business.

Normally, logistics deal with events that bring the product towards the customer. In the case of reverse logistics, the resource goes at least one step back in the supply chain. For instance, goods move from the customer to the distributor or to the manufacturer. When a manufacturer’s product normally moves through the supply chain network, it is to reach the distributor or customer.

Any process or management after the sale of the product involves reverse logistics. If the product is defective, the customer would return the product. The manufacturing firm would then have to organize shipping of the defective product, testing the product, dismantling, repairing, recycling or disposing the product. However, reverse logistics as a research field is relatively new. A body of knowledge is beginning to develop around the reverse logistics field which only emerged within the last two decades or so. Especially during the last decade, reverse logistics has obtained recognition both as a research field and as a practice.

The idea is to carry out in-depth analyzes on the materials and parts of which a product is composed to highlight any defects, manufacturing errors or product surplus. It is a process that must be executed in a very accurate way because it is the symptom of the attention that a company places in planning every detail. The process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin.


Online and secure tracking technology

In addition, there is the possibility of constantly monitoring the load through online and secure tracking technology and prepare a complete report of the shipment. In this way the logistic provider can intervene during the journey to reduce the empty runs, reduce the timing and improve the performance of each activity.

The benefits of Tracking & Tracing allow you to view the location of transport means in real-time, 24 hours a day from anywhere. Trackers provide an all-in-one solution for vehicle tracking and security. Vehicle tracking system ensures that every vehicle runs optimally by identifying a cost-saving route from the fleet data that is being measured. Furthermore, observe fuel effectiveness through understandable dashboards and information.

The status of cargo gets tracked and gets updated in the system, thus, you get the latest information about the cargo. It increases security and reduces insurance cost. From booking to delivery, every step increases customer loyalty as they get alerted about the cargo in every journey process till, they reach the destination.

Tracking and tracing solution helps to cut costs of the fuel and improves business productivity. Many people are aware of how tracking and tracing solution helps in today’s world. GPS tracker for any cargo or vehicle has become popular nowadays, as it helps a wide range of people globally. This information will support and manage every vehicle in a better way, although technology is making complex things easier and smoothens the work process in the right direction.

Si-Log Network offers support and care to give you peace of mind. An example? SI-LOG Network Tracing & Tracking Service.

The goal of distribution logistics, ultimately, is to handle deliveries as quickly as possible and in compliance with the agreements taken with the customer. Attaining efficiency is an important step in optimizing the entire logistics distribution process, reduce costs and above all achieve customer satisfaction.

Want to know all the "disruptive" trends that are changing the world of distribution logistics? Click on the image below and read our white paper!


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➡️ Do you want further information about distribution logistics? Check this article and find out all you are interested in!

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