The global logistics industry is worth hundreds of billions of dollars. As more people relegate their purchases to online shopping, we expect that number to continue expanding.
Whether you’re running a manufacturing operation or any other type of business that owns and operates a warehouse-like structure, chances are, you need a dedicated logistics department. To craft one that works for your business needs, you need to understand your logistics workflow, organize various pieces to support that workflow, and start maximizing your efficiency.
If you’re curious to know how to do that, you’re in the right place. Below, our team breaks down key considerations to keep in mind as you begin to establish your logistics operations.
Document Your Workflow
Before you can start building your logistics team, you need to understand what that team will need to do. The way to come to that determination is to document the workflow that needs to occur to get your products to your customers.
This task sometimes strikes people as overwhelming as documenting processes can be multi-faceted. Our advice is to work backward and write out each step that occurs the moment just before your customer takes delivery.
For example, before your customer takes delivery, your inventory needs to be shipped in a truck. That truck needs to pick up your shipment from your warehouse. That shipment needs to be packed on a pallet, etc.
By documenting your workflow, you can quickly identify all of your logistical needs.
Consider Location
A big piece of the logistical efficiency puzzle is location. Unfortunately, many manufacturers/businesses can’t finesse this issue because they are already invested in real estate. Therefore, optimally, you would consider location before purchasing a warehouse.
The reason why location matters is because there is a tremendous expense involved in getting items out of your warehouse and to their final destination. If you need to move your inventory to your nearest dock so a boat can ship products overseas, you will save a tremendous amount of money being close to that dock versus being fifty miles away.
Introduce Automation
Your location is fixed. Your workflow is documented. Before you proceed any further in developing your logistics department, consider where automation makes sense.
Automation is an effective vehicle when it comes to generating cost savings for organizations, so getting out in front of areas where it can be implemented gives you a great chance of padding your company coffers.
Here’s an example… If part of your logistics process includes identifying and logging parts that flow into your warehouse from a vendor, you could invest in a scanning system that will log arrivals on your behalf.
Connect With Vendors Where Necessary
Another key component of your logistics team will likely be third party vendors. These vendors will do everything from service machines in your warehouse to take care of reefer fuel delivery.
Look over your workflow documentation. See which steps are better managed by specialists. Once identified, start getting quotes/hiring those specialists onto your logistics team.
Hire an Experienced Logistics/Floor Manager
Every great logistics department has an experienced logistics/floor manager at its helm. You should move to hire this person early in your department development cycle. That way, they can lend advice on where investments need to be made to ensure operational efficiency.
Finding a good logistics manager can be accomplished by writing up a detailed job description. After, post what you write on popular job boards like LinkedIn or Monster.
Tailor Your Warehouse Floor
When you look over your logistics workflow with your floor manager, does the way your warehouse floor is laid out, support seamless transitions between steps? Are your pallets next to your truck ports? Would workers have to walk across the building to move through their tasks?
Ask yourself how you can efficiently structure your logistics department. The goal should be to reduce the time it takes to get products to their final destination. If you can do that, you’ll enjoy a massive boost in operational efficiency.
Hire Your Ground Crew
This is a step that is going to be mostly managed by your logistics/floor manager. Once you have your warehouse floor laid out and the steps leading up that moment in place, it’s time to start bringing on headcount, where necessary, to execute your logistical processes.
Have your floor manager start small when it comes to hiring, so you lower the likelihood of laying people off shortly after bringing them on.
Implement Ways to Measure Effectiveness
By this point, you have a functional logistics department. Your work isn’t over, though!
Make it a point to have triggers in place that allow you to measure the efficiency of the department you’ve set up. Always look for opportunities to make tweaks against those measures. That way, you can continue saving your organization time and money.
A Great Logistics Department Makes for Happier Customers
At the end of the day, your company’s job is to make great products and get those products to your customers as seamlessly as possible. Great logistics departments enable both of those ends since refined workflows include quality checks and enable shippers to move items quickly.
All of that to say that paying mind to the efficiency of your logistics is worth doing!
Are you still scratching your head when it comes to establishing logistics solutions? Do you want more guidance on how best to proceed? If so, check out more of the content we have regarding the topic on our blog.
