How to Optimize Your Supply Chain With Efficient Logistic Management Processes: A Guide

Sourcing, storage, processing, packing, shipping… the supply chain is an elaborate process with many interrelated phases.

Logistics management processes bring efficiency, effectiveness and differentiation to each phase, saving them from falling into a chaotic mess. This also puts logistic managers in a better position to cut costs and meet customer expectations.

Logistics management is an ongoing process you must continuously optimize. And without the right processes in place, you’ll find it hard to grow your business.

In this guide, we’ll show you how to enhance your organization’s logistic management processes, as well as discuss solutions to automate repetitive tasks, reduce errors and improve collaboration.

What are logistic management processes?

Logistic management processes refer to specific activities that facilitate the planning, implementation and control of the movement and storage of goods and services from the point of origin to the point of consumption.

The main logistic management processes are:

• Transportation (selecting the appropriate mode of transport, routing shipment and monitoring progress).
• Inventory management (management of stock levels and tracking of inventory movements throughout the supply chain).
• Warehousing (management of the physical space and equipment used for storing and handling goods).
• Order fulfillment (processing of customer orders and the delivery of goods to the customer).
• Demand forecasting (predicting customer demand for goods and services to help companies plan production, transportation and inventory management).

Generally speaking, the more you optimize your logistics management processes, the greater your customer satisfaction and profitability.

Why are logistic management processes important?

The main purpose of having a logistic strategy with well-defined logistics management processes is to keep customers happy and achieve organizational goals. It enables you to find more effective and efficient ways to optimize the supply chain while improving your manufacturing process and providing the best possible service to retain customers and maintain satisfaction by meeting their requirements.

Here are the main benefits of logistic management processes for your business:

Lower manufacturing costs

When raw materials aren’t picked up or delivered on time, production schedules get delayed, causing manufacturing costs to skyrocket.

Implementing efficient logistic management processes streamlines material handling and transportation. This helps increase safety and reduce shipping costs, allowing businesses to augment profitability. For example, your transportation plan can include alternative routes to ensure timely delivery, even in case of unforeseen road closures or traffic congestion.

Improved flow of operations

Imagine you’re a manufacturing company that produces cars. Your logistics department will have to coordinate with:

• The procurement process team to ensure timely delivery of raw materials like rubber and steel.
• The production team to ensure the assembly line runs smoothly and the cars are shipped to dealers on time.

🎓 Related reading: How to Use Automation to Maximize the Procurement Cycle

Any disruption in the flow of information or material can lead to production delays, resulting in missed deadlines and lost revenue.

Logistic management processes involve thorough planning and continuous monitoring to ensure complete departmental sync. There’s a clear flow of information from one department to another, which helps streamline the entire process flow and maximize efficiency.

Streamlined inventory management

Inventory management is a critical process of logistics management, directly impacting various business functions like financial management, product management and customer service management.

Logistic management processes enhance your organization’s inventory, helping you keep and maintain the correct stock levels.

💡 ‎Related resource: The Top 15 Product Management Software to Boost Your Strategy

Better communication flow

Logistic management processes ensure a seamless communication flow. With an efficient system, your logistics staff can easily coordinate with suppliers, vendors and customers across the supply chain.

Competitive edge over rivals

Process errors occur because of discrepancies or inefficiencies in procedures. A good logistics strategy not only accounts for any loopholes in the procedure but also outlines measures to address them, minimizing process errors.

In addition, they help accelerate the delivery process. This ultimately leads to quality processes and quick service that keep customers happy, which automatically gives businesses a competitive edge.

Logistics management solution

Automating various logistic management processes complement other business operation systems like EDI. For example, you can use Scribe to create comprehensive SOPs or training manuals telling your staff how to go about a task (for example, counting stock) and make informed inventory-related decisions while improving efficiency and decreasing time consumption.

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6 common challenges faced by logistic managers and how to overcome them

As a logistics manager, you must be prepared to face diverse challenges in your daily operations. This may include:

1. Transportation delays

Transportation delays can be caused by a host of factors, from weather conditions and traffic congestion to unexpected demand and vehicle breakdown. The fact that they may lead to delays in delivery times and cause customer dissatisfaction is what makes it a significant challenge for logistics managers.

Solution:

Develop a contingency plan that considers possible disruptions and considers alternative routes. Also, maintain regular communication with transportation providers to get real-time information on delivery times, traffic conditions and any other issues impacting delivery.

Another solution is to leverage technology solutions like predictive analytics and machine learning to focus on and manage transportation disruptions. GPS tracking, fleet management software and real-time reporting are also useful to monitor shipment status and promptly respond to any delays or issues.

2. Inefficient inventory management

Overstocking leads to increased storage costs and increased risk of obsolescence, while stockouts result in loss of sales and customer dissatisfaction. To avoid these problems, logistics managers need real-time visibility of their inventory levels, which most lack.

Solution:

Get a robust inventory management system that provides real-time data on inventory levels, demand patterns and stock replenishment needs. This will help you make informed decisions regarding inventory restocking and management.

Another benefit of an inventory management system is it helps you identify slow-moving or non-moving items and reduce inventory levels for those items, freeing up warehouse space and reducing unnecessary storage costs.

3. Stunted communication and coordination

Without effective communication and coordination, the involved departments and stakeholders won’t be aligned on the end goals and objectives. This can lead to disastrous results like poor decision-making, missed deadlines and errors, reducing efficiency and effectiveness.

Solution:

Foster a culture of collaboration and openness among departments by encouraging team members to share ideas and feedback and establishing regular communication channels.

You can also leverage technology tools such as communication and collaboration software to connect with the members in real-time.

4. Complex cost management

As a logistic manager, you need to find a balance between reducing costs and maintaining service quality. However, when you factor in the unpredictability of labor costs and fuel prices, you will find yourself navigating various cost management challenges.

Solution:

You can overcome cost management challenges by using technology solutions, such as automation, optimization and analytics, to identify cost-saving opportunities while maintaining service quality.

Automation reduces costs by automating routine tasks, such as data entry, routing and scheduling. Optimization is another technology solution that uses algorithms to identify the most efficient and cost-effective ways to plan and execute logistic operations.

Analytics also play a crucial role in cost management, allowing you to uncover valuable insights from logistics operations. For example, you can use analytics to identify underutilized assets, such as warehouses and trucks, to lower operational costs.

5. Regulatory non-compliance

In the logistics industry, you need to adhere to several regulations, from custom regulations to hazardous materials regulations to transportation regulations. Failure to comply with them can lead to hefty fines, penalties and legal action.

However, staying up-to-date with the latest regulations and ensuring compliance is often daunting for most logistics managers.

Solution:

Implement a robust compliance program that helps you identify and understand applicable regulations and establish relevant compliance with HR policies and procedures.

Use Scribe’s Pages feature to create and share elaborate documentation outlining each compliance requirement to ensure everyone is aware of the responsibilities and that your company is complying with regulations. Here’s what a Scribe Pages looks like:

You can also enforce regular business process audits to identify areas of non-compliance and correct them before they become significant issues. Be sure to continually review and improve your compliance program so that they remain up to date with changing regulations.

📌 Recommended reading: How to Know if You Need SOPs or Work Instructions For Your Process Documentation

6. Capacity constraints

Capacity constraints occur in many forms, from limited warehouse space to transport capacity. The biggest issue with them is that they create bottlenecks in the logistics process, hindering its flow and resulting in delays, higher costs and reduced efficiency.

Solution:

You can adopt various strategies to overcome capacity constraints. One key strategy is optimizing operations to maximize capacity utilization. For instance, you can implement lean inventory management practices to reduce excess inventory and reduce storage space requirements.

You can also consider outsourcing your logistics operations to third-party logistic providers (3PLs) with the required expertise and infrastructure to help maintain a smooth flow of logistics operations.

8 Examples of logistic management processes (with checklist for implementation)

Here are the eight logistics management processes you can focus on to identify and eliminate profit-draining efficiencies:

1. Facility inspection

Depending on your industry, managing a logistic facility can involve facing multiple workplace hazards like dangerous chemicals and large shipping trucks. An ill-managed logistics facility is also not an option, putting you at risk of non-compliance, inefficient operations and an unsafe work environment.

This creates the need for regular inspection of the facilities, where you can ensure operations abide by safety regulations and the facility remains fully stocked to streamline workflow.

Here’s a facility inspection checklist to get started:

• Damages.
• Reception supplies.
• Bathroom supplies.
• Equipment function.
• Cleanliness.
• Secure loading dock.
• Proper storage.
• Obstructions.
• Proper lighting.
• Appropriate safety measures like fire extinguishers, ventilation and fire blankets.

2. Inventory management

Inventory management helps organizations manage stock levels and storage and control human error. If not done properly, businesses can incur unnecessary expenses from reconciling damages due to high warehouse costs from overstocking or poor inventory storage.

Instead of using guesswork that may or may not improve your organization’s ordering and storing efficiency, focus on streamlining your inventory management process.

Here’s an inventory management checklist to get started:

• Current stock levels.
• Order list.
• Arrival time.
• Return damaged goods.
• Update stock records.
• Company budget.
• Purchase order approval.
• Tracking details.

3. Forklift inspection

Forklifts are an indispensable part of a warehouse, allowing you to move goods from one place to another. As they help retrieve and load goods weighing several thousands of pounds, forklift malfunctions can stall operations and present surrounding workers in the warehouse with safety hazards.

While it’s necessary to schedule periodical forklift inspections, you must also encourage documenting the process as a reference in case of a breakdown. This will help you determine if a malfunction could've been avoided or occurred before.

In addition, requiring the employee to sign the report as proof of a comprehensive inspection creates accountability within the process.

Here’s a forklift inspection checklist to get started:

• Forklift condition.
• Damages/leaks.
• Tires.
• Guards.
• Functions.
• Fluid levels.
• Seat belt.
• Motor.
• Lights.

4. ISO container inspection

Logistic managers often take shipping containers for granted. Don’t be like them. If you aren’t keeping track of your shipping containers, you risk losing everything they contain when the whole thing gives away.

Here’s an ISO container inspection checklist to get started:

• Exterior walls
• Inside walls (to determine if it's empty)
• Identification number
• Doors
• Roof
• Floor

5. Vehicle inspection

Regardless of whether you’re using trucks or cars, be sure to inspect them at least once a year, even if they don’t legally require routine checks.

Think about it: a broken-down car will not only distract shipment schedules but also pose serious risks to your employees. By implementing annual inspections, you can save on long-term repair costs, schedule operations timely and have an accurate picture of your fleet’s condition.

Here’s a vehicle inspection checklist to get started:

• Tires.
• Fluids.
• Brakes.
• Battery.
• Windows.
• Bumpers.
• Lights.
• Turn Signals.
• Horn.
• Seatbelts.
• Air Conditioner.
• Defrosters.
• Windshield Wipers.
• Mirrors.

6. Order fulfillment

Once you receive an order, you become responsible for orchestrating shipments to ensure fast and safe delivery.

While simpler for minimal orders, fulfillment can become challenging when order volumes increase. So, instead of being a sole supervisor, consider implementing a comprehensive system to efficiently fulfill requests, especially when you’re a large company.

With a detailed and standardized fulfillment system in place, you can ensure every order is processed accurately and efficiently.

Here’s an order fulfillment checklist to get started:

• Record order details.
• Schedule delivery.
• Print packing lists.
• Package items securely.
• Weigh/measure package.
• Forward tracking information to customers.
• Receive payment.
• Check stock.
• Request items from inventory.
• Record stock after fulfillment.
• Check items for quality.

7. Order processing

Suppose your business has relatively simpler transactions that don’t need a complex order fulfillment system. In that case, order processing may better fit your needs, as it places greater emphasis on gathering customer feedback.

Compared to order fulfillment, order processing requires only one supervisor instead of multiple employees. This makes it a more streamlined and cost-effective option for businesses.

Here’s an order processing checklist to get started:

• Forward tracking information to the customer.
• Follow up with customers.
• Note client/Order details.
• Record salesperson.
• Check stock.
• Receive payment.
• Schedule delivery.
• Contact warehouse.

8. Warehouse inspection

Warehouses store raw materials or finished goods, which makes them crucial for businesses that deal with goods import, export and manufacturing.

Monthly warehouse inspections ensure workstations abide by company and state regulations, allowing you to maintain a hazard-free environment and keep employees safe.

Here’s a warehouse inspection checklist to get started:

• Safety measures.
• Damages.
• Cleanliness.
• Safe storage.
• Inspected equipment.
• Secure stair railings.
• Obstructions.
• Lighting.
• Clear aisles.

Use Scribe to streamline logistic management processes

Scribe is a leading process documentation tool that can turn any logistic management process into a step-by-step guide, complete with text and annotated screenshots.

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Share Scribes instead of manual folders and files to ensure your team always have ready access to the information required to effectively perform logistic management processes and overcome common logistics challenges by:

• Automating repetitive tasks.
• Reducing human errors.
• Improving collaboration.

Scribe also offers several versatile features, including Pages that allow you to combine multiple scribes into one, helping you save time and money and increase productivity. This facilitates the timely delivery of goods without compromising service quality, thereby improving customer satisfaction.

Make logistics simpler with Scribe. Get started for free today.