Internet-driven global supply and logistics value chains in which everything can be connected has forced organizations to rethink their global logistics processes, and logistics management systems that supports these processes and the logistics management best practices they adhere to.
The traditional view of logistics as fundamentally segmented between product, supply, and demand no longer applies. Instead, what is emerging is a demand-driven logistics value chain in which information flows in all directions, dictated by the requirements of demand.
The shift in logistics management software towards flexibility and efficiency means manufacturers must craft logistics strategies to handle dramatically greater logistics complexity. Researchers at AMR Research describe this as an inside-out approach to supply chain and logistics management that differs from traditional logistics management and requires different software and best practices to support it.
Among the new or improved practices they identify are:
- improved forecasting and better visibility of demand and supply;
- supply and logistics chain transformation;
- flexible, tiered metrics; and
- root cause analysis to understand variability.
Ultimately, the goal is to create a value-driven logistics network that aligns supply and demand relationships around the right platforms and organizational and systems practices. With that in mind, here are five logistics management best practices to consider when selecting logistics software:
Recognize the emergence of a multi-faceted supply chain. This includes understanding the impact of globalization; a changing global competitive landscape; mergers, acquisitions, structuring, and bankruptcies; an active and changing regulatory environment; changing consumer expectations; shorter product lifecycles; increased product configurability and customizability; rapidly changing energy costs; and more.
Understand internal, external, and customer logistics. This pertains to physical aspects of the business, external factors over which the organization has little control, regulatory issues, and customer dynamics.
Embrace change and implement change management when deploying new logistics management software. Recognize that jobs and responsibilities will change and the resulting new business processes may disrupt long-ingrained work habits. Expect resistant to change and implement communication, education, and change management programs from the start.
Aim for a dynamically resilient logistics management strategy. You'll need this to adapt to internal and external changes as they happen through the use of logistics management software. Look for software that is highly flexible and easily configurable.
Strive for continual logistics monitoring and visibility. This can be accomplished with logistics management software that enables managers to see what is happening at every step in the end-to-end process, identifies bottlenecks and problems before they impact the customer, and can respond to changes in the competitive and regulatory environments
About the author: Alan Radding researches, analyzes and writes about business and technology. His articles have appeared in The New York Times, BusinessWeek and numerous technology publications and on websites such as SearchManufacturingERP.com.
This was first published in December 2009