4 Elements of Logistics Planning that Can Help Businesses

All businesses purchasing or selling materials and products need to plan a logistics strategy. This article lists a few of the most important elements that companies need to consider when developing their all-important plan.

Outsourcing

In many cases, outsourcing to a company like www.strlogistics.co.uk is a shrewd financial move. As with any other kind of outsourcing, logistics outsourcing allows a company to pass on some of the financial responsibility instead of bearing it themselves. Many aspects of logistics are outsourced regularly. Warehousing, overland transportation, international transportation, and quality control are all frequently handled by 3rd party carriers. Outsourcing is, however, not the best choice in every single circumstance. If a company has the budget available to buy or lease its own fleet and hire its own drivers, it might be wise to do so in order to maintain a degree of control over operations. Accurate forecasting of finances and the creation of sound logistics budgets is necessary in order to plan an outsourcing strategy effectively.

Inventory

Inventory stock and inventory management impact the effectiveness of a logistics chain massively. First and foremost, a company should aim to simplify its inventory. A reduction in the variety of items within a system is always a good aim. Streamlining is the key. Once an inventory has been streamlined as much as possible, it is worth planning for the introduction of more comprehensive inventory management and reporting systems. These are often relatively automated and give logistics leaders an incredible new source of data that can be used to further streamline operations in the future.

Automation

Indeed, it is in the field of inventory management that automation has been implemented the most in the logistics industry. Fully automated inventory management systems analyze inventory stock replenishment data and ‘learn’ how to automatically order items at exactly the right time.

Other areas within logistics are also seeing creeping automation. Strategic planning for the proliferation of automated drone delivery systems and self-driving trucks is now a genuine necessity in business. Likewise, the incorporation of robotic warehouse ‘workers’ into large-scale fulfillment centers is already taking place. Large-scale automation might not be the soundest strategic prospect for your business – but it is certainly something worth considering.

Global Politics

Global politics will always impact logistics and trade. Everything from the price of fuel to the navigability of the seas is impacted by the political situation. In turn, global politics is heavily influenced by logistical challenges and innovations. Take the recent war in Ukraine as an example: the global logistics industry has suffered huge blows due to the resulting oil price hike. All logistical activity in the Black Sea has become far more dangerous and expensive. When the Suez Canal was blockaded in the 1950s, Britain and France took part in a disastrous undeclared war with Egypt – all in the name of protecting global logistics. Planning for disruptions caused by global politics is an absolutely essential contingency for companies looking to protect their profits.