Importance of Logistics Design

Access to real-time data and analysis.

A critical aspect of logistics design is integrating Information Technology into every part of your supply chain from raw material acquisition to customer delivery. This means that when purchases are bought from suppliers that information should be relayed to the main office immediately. When materials are in transit their GPS data location should be sent to the head office for monitoring. Last but not least when goods arrive at the business or intended customer this should be known to the management so as to ensure everything is in order. Having all this data in real-time means that it is possible to account for delays, assess the efficiency of individual employees and learn which parts of the supply chain can be improved.

Reduction of waste and theft.

Using effective database management and sorting techniques it is possible to determine if there are actors within your organization engaging in theft or waste. A good logistics structure ensures every task within an organization has someone who is responsible for it.(1) This means that management can easily determine which tasks are not being accomplished effectively and assign responsibility fairly. Integrating security technology like password enabled door locks and security cards mean it is possible to determine who has access to inventory in case of theft.

Logistics automation for quick customer response.

The common saying that the customer is always right is something to keep in mind when designing a logistics network. From the moment a customer orders a product to the moment they receive it, great care should be taken to ensure that they have the best customer experience possible. This means that a customer should be able to know how many items are available in your stock, how long delivery will take if the items are insured in case of damage during transport and whether freight tracking is available. A customer should also be able to lodge complaints online or even offer praise where it is deserved.

Competitive advantage over rivals.

An organization that utilizes efficient logistics systems will always outperform potential rivals because they can assess their own performance relative to their actions. This means that unlike rivals who cannot spot waste, theft and time wasted you will be able to gradually improve on your organization's performance. It is also possible to assess your rival to see how they may be doing things better than you.

Planning for easy scalability.

A good logistics system will enable your organization to determine what it would take to scale up operations. You can determine how much capital will be needed, how long it will take, how many people will need to be hired and how much additional infrastructure will be needed. Silicon Valley today is littered with eCommerce organizations that started well only to collapse due to poor scaling strategies. These companies could not determine what quantity of perishable goods like vegetables and eggs to store so their inventories rotted away along with their fortunes. (2) These problems could be easily have been prevented with good logistics designs. 

Sources:

1. Robinson, A. (2016) Retrieved from https://bit.ly/2JaaIlQ

2. Berta, C. (2018) Retrieved from https://bit.ly/2PHLb4w