Distribution logistics is a market-linked logistics system that involves the shipment of goods from the manufacturer to the customer. It comprises of all activities related to the provision of finished goods and merchandise to a client. Finished products can be delivered directly from the production site, from a trader’s stock situated near the production site, or through additional regional distribution warehouses. Distribution logistics links a company’s production logistics to the customer’s procurement logistics. Customer orientation, therefore, plays a significant role because of the close relationship. Maintaining close and frequent contact with the customer is vital.
Tips for distribution logistics planning
1. Knowledge of the company’s planning time horizons
There are three planning time horizons: strategic, tactic and operational. When planning for distribution logistics, a logistics department needs to follow a hierarchy of stages in every time horizon. Stages in different time horizons may overlap. For instance, the choice of mode of transportation could be an initial strategic decision and also a tactical decision. Companies undertake various logistics operations in particular planning time horizons. The most important thing is to plan correctly in the initial stages and monitor and control the operations in subsequent stages.
2. Demand-driven logistics
It is better to match demand for the products to your supply. This helps to reduce transportation costs. Transportation cost savings can be used to fill the inventory with information and improve customer service which is crucial to logistics. Aligning your business to practice demand-driven logistics provides strategic benefits to the entire enterprise.
3. Network optimization
Analyze your customers and suppliers deployment. Use analytic models to define optimal locations for distribution and logistics centers, while taking into consideration all important factors such as transportation, lead times and so on.
4. Know your corporate strategy
If your company’s strategy is to be the low price leader, your prime goal should be to move products at the lowest possible cost.
If your corporate strategy is anchored on agility and fast movement of goods, your logistics strategy should be based on speed rather than cost.
If your company has set standards for quality, make sure you have 100% perfect orders, and correct any error by all means.
If your company is growing through merger, plan for a logistics strategy that incorporates the operations of new acquisitions into the existing logistics program.
The bottom line is: as you plan for your distribution logistics strategy, know what your corporate strategy is to ensure success in the overall logistics strategy.
5. Planning with innovation
Planning for the future using technology is essential. There are distribution logistics planning software that can improve the effectiveness of the logistics strategy. You could whip your company fleet into shape with fleet management software. Inventory and distribution management solutions can help you to maximize every square foot of space in your distribution centers. Use technology to connect with customers to ensure fast, and adaptable response that will set your business ahead of competitors. Use the Big Data provided by the world every other hour to understand and propel your business to sustainable heights.
6. Acquire a good logistician
Distribution logistics needs a person who understands what degrees logistic impacts your business and your customers’ operations. The logistician should understand how crucial timely delivery is to your outbound shipments, and the existing constraints like budget and resources. An experienced logistician will also have excellent interpersonal skills and is well connected to the logistics world.
These tips will help you to plan for a successful distribution logistics strategy that will be beneficial to you and your customers.