Paving the Road to Success: Modern-Day Logistical Systems

    July 14, 2006

For any business looking to trade worldwide, properly integrated logistical systems can mean the difference between roaring success and dismal failure.

A successful business needs to understand the needs and wants of its target market, and crucially, it needs to be able to meet those demands quickly and effectively. It is here that logistics play a crucial role. The link between the operating activity of a business and its market, an efficient logistics process requires a combination of strategic planning, inter-departmental, and indeed inter-business cooperation, and a healthy dose of common sense. It is about ensuring that the business has a steady inflow of the goods (and services) it needs to be productive and further, it is about ensuring that this product gets to the right place at the right time.

Consumers want what they want when they want it. Whether these consumers are end-users or other businesses along the supply chain, providing the right goods at the right place at the right time is as important as the quality and cost of those goods.

The evolution of supply and distribution systems

When one compares the operations of a modern-day business involved in the supply and distribution of goods to the operations of its forebears, it’s clear that there’s been a trend towards a more demand-centric approach.

Years ago, the world of distribution favoured an inventory-heavy model, where supply was provided according to production potential. With limited information available around the specifics and chronology of demand, inventories provided for a way to smooth the gaps.

More and more we find businesses moving away from this model, towards a more demand-focussed model. With major advances having been made in the fields of information flow systems and supply chain management solutions providing a better way to synchronise demand and supply, there’s been a priority shift in the logistical systems.

Supply-chain management solutions

Efficient supply chain management systems need to be reliable and dependable, yet retain enough flexibility to meet the evolving needs of business. With a decreasing reliance on inventories, the timeous provision of information becomes critical. When the nature of a company’s business involves a measure of global reach, collaboration with global partners is essential to ensure there are no “weak links” in the chain. The globalisation of business activities has narrowed the gaps between links in the supply chain and simultaneously extended its reach.

Transportation logistics

With an increased reliance on circulating inventories, transportation infrastructure becomes a dominant factor, Consistent predictability is a prerequisite for reliable planning. With a more complex supply chain, transport logistics have had to continually evolve to keep pace.

Electronic information systems

Information provision needs to be timeous and accurate. Effective technology use helps to make the dissemination of information seamless, promoting ease of access.

Inventory management

While the role of inventories seems to be in decline in comparison to to transport and information infrastructure, smaller inventories both necessitate and encourage a more effiecient system. Crucially, inventory has become less of a static component, making its management function far more challenging.

Of course, it is not only in the realm of business that logistics are vital. For centuries armies have known all about the importance of logistics. Ask the Romans, ask the Greeks, ask the US soldiers in Iraq today. Even the animal kingdom is well-aware of the importance of logistics. Ants, as a species, would never be as successful as they are were it not for their ability to co-operate as effectively as they do. If we are to take any lessons from their example, it should be clear that collaboration is vital to getting the various links in the chain to work together. This co-operation furthermore allows for continous refinement to the system as a whole and its various intricacies.

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South African Container Depots (SACD) has built its reputation on reliable, flexible and innovative solutions structured around its clients’ individual needs. SACD Freight leads its category in the Southern African market – because it offers export and import companies strategic facilities and customer driven, supply chain management solutions.