Processes in logistics are procedures designed and used to ensure that the goals of a business are accomplished. These processes are directed at coordinating and streamlining all operations so as to operate efficiently and offer greater customer satisfaction. Processes are therefore of utmost importance in logistics. Logistics are an integral part of the supply chain and the supply chain concept is based on a single integrated system with different functional elements linked together.
Logistics processes should be geared towards a cross-functional view which is the target of the supply chain. The processes should allow for trade-offs when planning the total logistics operation. Trade-offs can be defined as a variation in the mix of the constituent parts of a system so as to raise the overall benefits in terms of lower costs or greater revenue or better service delivery, or some combination of these benefits.
Trade-offs are important because they can have overall cost savings even when there is an additional cost in one activity. They could create a great cost saving in one function which translates into a total cost saving for the whole system. In other words, it could mean spending more in function so that there can be less spending. In another function or greater benefits for the whole company.
Steps Towards Logistics Processes Design Includes The Following:
Step 1: Identify the key steps in the process. When goods arrive at the warehouse, how are they handled? Who does what? What kind of document is required?
Step 2: Write down the main elements of the processes and note the departments and the people involved in the process. How many people and from which departments are involved in recording receipt of goods? Does it involve personnel from Quality Control, Warehouse, Accounts etc? The process should indicate the relevance of the people involved and the necessity for them. At this stage, the aim of the process becomes clearer and the problems that are likely to hinder the processes identified.
Step 3: Do a detailed workflow method, showing how work moves through each department or function in the system. The time is taken and any challenges should be noted. These might translate into costs, which can be reduced through improvements in the process. A careful examination of the workflow should be to highlight areas that are repetitive and unnecessary.
Step 4: When all corrective measures have been put in place and opportunities for improvement identified, a formal process can then be adopted. A very important point to stress is that the process should ensure that every department carries out its function effectively so there are no problems when the workflows to the next department.
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