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Crucial Factors For Logistics Integration

Integrated Logistics enables organizations to meet consumer demand through proper planning, implementing the most efficient transportation, from purchasing raw material to manufacturing the product, storing finished goods in the warehouse, and finally delivering to the customer. The organization can track productivity, utilization, and reduce operational costs with integrated logistics. Management must be committed to show its employees, customers, and suppliers the way to a fully integrated logistics operation. This article discusses several factors that are crucial to the successful integration of a logistics operation.

Integration with Purchasing

When a company’s purchasing and logistics departments work together, the results are better. When purchasing and logistics are combined, businesses will see an increase in efficiency and financial performance, as well as lower operational expenses and inventories. It aids in gaining visibility and attracting other financial inventors, as well as boosting labor markets and achieving development goals. The corporation must design a long-term strategy, a tracking method, and quantifiable standards that are in line with its business strategy. Implementing an inventory management system aids in benchmarking every contractual vendor based on order receipt, consignment quality, quantity received, delivery to correct destination, and document verification. The Integration allows for the renegotiation of contracts with suppliers, which opens up more opportunities for long-term cost savings. Technology may save a company a lot of time and money. Linking processes with technology has the ability to provide a holistic view of all functions, as well as improve efficiency, lower costs, better customer management, track product flow, and increase communication between departments, suppliers, and consumers.

Warehousing Distribution
Image taken from: https://www.qstockinventory.com/blog/warehousing-distribution/

Inventory Visibility and Accuracy for Integration

Warehousing is an important aspect of the logistics industry since it is the safest and most cost-effective place to store goods, and it is usually located in a specific region of the building. The storehouse allows the production to continue all year. Integration improves warehouse productivity by reducing storage space, ensuring accurate and quick picking, and ensuring that employees are properly trained. Integration decreases costs, improves efficiency, and improve communication across departments, as well as increasing customer happiness, which leads to more revenues. Staff can follow goods along the entire supply chain with an inventory management system, and without this knowledge, they may wind up with excess stock or inadequate stock to fulfil consumer demand. Good inventory management can help to reduce warehouse issues and allow the warehouse to restock inventory as needed. It has the potential to conserve space while still being cost-effective. Inventory control provides for proper stock level recording, and the system will reveal how much stock is in balance or needs to be replenished. Better efficiency, faster reaction times, lower administration costs, personalized service, overall cost savings, and greater manufacturing efficiency are all advantages of warehouse integration.

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Tan Chin Hong, DLSM
Tan Chin Hong has substantive years of experience in the specialised field of logistics transportation, and specifically in both inbound and outbound logistics for FCL transportation and project cargo handling. He is a member of Singapore Institute of Purchasing and Materials Management (SIPMM). He completed the Diploma in Logistics and Supply Management (DLSM) on June 2021 at SIPMM Institute.

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