American Western Distribution

The Basics of Logistic Management

Distribution logistics management is the efficient transfer of goods from the source of supply through the place of manufacture to the point of consumption in a cost-effective manner while providing an acceptable service to the end customer of the product. The logistics management process begins with raw material accumulation to the final stage of delivering goods to the destination.

The best logistics companies provide the service level required by the customer and achieve the optimum balance between total logistics cost and the required customer service level.

In order to do this effectively key design elements need to be considered.  They are the design strategy process including network, information system, and organization structure design.

Another critical component of distribution logistics management is the development of an appropriate customer service policy one based on identifiable service requirements and a suitable logistics operation that can provide the required customer service.

Logistics management includes:

  • Selecting appropriate vendors with the ability to provide transportation facilities
  • Choosing the most effective routes for transportation
  • Discovering the most competent delivery method
  • Using software and IT resources to proficiently handle related processes

The best logistics companies create organizations that implement best logistic management practices. These companies focus on collaboration rather than competition. Good collaboration among transportation providers, buyers and vendors helps reduce expenses. Also, an efficient and safe transportation provider is vital to business success.

Few business areas impact an organization in as many places as do logistics and distribution. Service level performance directly impacts customer satisfaction. Delivery expenses impact revenue while driver labor and carrier costs impact the income statement and rolling stock and warehouse funding impact the balance sheet.

An excellent core team of logisticians helps to reduce costs through distribution footprint optimization, competitive sourcing, and improved transportation management. Efficient warehousing through design and implementation of improved distribution center footprints and improved productivity within facilities are all critical to the efficient, cost-effective strategy of a comprehensive logistics and distribution system.  Great logisticians make effective use of opportunities while reducing risks including:

•Freight Carrier Sourcing and Mode Conversion

•Distribution Footprint Optimization

•Order/Load Optimization and Freight Cost Recovery

•Dedicated/Private Fleet Management and Inbound Freight Conversion

•Supply Chain Technology

•Inventory Management

•Supply Chain Organization Design and Outsourcing

A distribution planning fundamental issue is the choice and selection of channels to market. The most common channel decision is whether to run an in-house distribution operation or use a third-party provider to operate and manage elements of the supply chain.

When engaging a logistics systems management company, make sure to choose one that implements distribution logistics management from A to Z in a way that reduces risks and uses collaboration to ensure both safety and cost savings.