Strategic logistics planning sits at the heart of supply chain decision-making. It focuses on identifying strategic options for logistics network design and service, which is done through efficiently allocating resources such as inventory or transportation capacity across the supply chain.
It allows companies to determine how much inventory they need to carry, where that inventory should be stored geographically (strategic locations) and when those goods will arrive in each place (timelines). This article discusses logistics planning and how it will play an integral role in the success of your business.
Benefits of logistics planning
Logistics planning can help you increase revenue and save time and money in the long run by making your supply chain more efficient and seamless. Some of its benefits include:
1. Improved customer experience
A well-planned freight transportation process focuses on maximising On-time In-full (OTIF) in the supply chain to provide better customer service. OTIF refers to a supplier’s ability to deliver a product within the prescribed delivery window and at full quantities ordered. It’s a key metric used by customers to measure the performance of the supplier. Logistics planning thereby helps attain OTIF consistently, contributing to overall positive customer service.
To achieve this, a company must forecast demand, optimise its workforce through the supply chain, improve real-time visibility, among other things. The key is enhancing OTIF and SLA (Service Level Agreement) through logistics planning to meet delivery goals. Some ways to enhance this include:
- Transportation Management – optimising transportation routes helps reduce costs associated with both freight charges and fuel consumption.
- Load & Manpower planning – implementing an efficient warehouse management system (WMS) improves storage space utilisation rate by reducing unproductive floor space and storing more goods within each facility to avoid stock-outs.
- Supply Chain Collaboration – cooperation between logistics partners helps reduce the overall logistics costs and an improved OTIF and SLA score.
2. Achieve seamless operations with automation
A logistics plan is created to determine how goods and services will flow from the supplier, through the logistics network to your customers. Some of the most common challenges in freight movement include.
- The availability of cargo and the capacity to meet customer delivery schedules
- Vehicle routing, carrier selection, and compliance issues hampering the utilisation of assets.
- A lack of visibility across the entire supply chain results in increased transit times and inventory carrying costs.
- Risk of fraud arising from the problems of visibility in the supply chain.
- Documentation inefficiencies in freight transportation as it is currently a manual process.
- Inefficient communication between parties
Automation and perfect planning & coordination are two factors that can enable efficiency in logistics. Automated planning and visibility tools can help you plan and predict your logistics. They seamlessly integrate with existing technology platforms such as TMS systems or ERP to achieve optimum usage of assets and spends across locations/plants without spending additional time on building new software.
3. Enforces effective logistics management
Good planning aims to attain maximum work in the least possible time. Logistics management is about moving goods from point A to point B and also monitoring factors such as shipping costs, fuel prices and lead times for suppliers.
This is combined with an extended range of supplier locations, making logistics planning more complicated than ever before. With the help of technology, logistics planning can help businesses efficiently manage time, space, and money and create transparency, empower a safety network and improve the overall management process.
How does Freight Tiger Help?
Freight Tiger’s proprietary planning engine for capacity & route optimization has proven to deliver cost savings of 6 – 7% and help customers load more by 10 -15%. The end-to-end integrated platform is configured to Load More, Buy Smart, Deliver Fast, Operate efficiently, Make Better Decisions and Reduce Carbon Emissions.