Share This Article
Integrating logistics is a critical strategy for maintaining flexible supply chains. Everything is linked such as resources, goods, information, operators, and departments with a single goal in mind: to deliver orders to customers as quickly as possible. Learn more about integrated logistics company in Malaysia.
What is integrated logistics?
The term “integrated logistics” refers to a supply-chain organisation and business model in which departments, processes, resources, and flows are all coordinated to operate in the same direction. Logistics is an interdepartmental process, involving almost all departments within a company. When they work together, operations become much more seamless, and orders can be dispatched much more quickly.
The concept of integrated logistics arose in response to market evolution. Changes in demand and the appearance of competitors have compelled businesses to seek formulas that optimise their operations, shorten cycles, and reduce costs. Coordination between an organisation’s various departments allows for flexible, agile operations that allow it to respond quickly and accurately to new trends. Integrated logistics is especially useful for overcoming the challenges posed by omnichannel retail: large numbers of orders of varying sizes, consisting of few items, and requiring delivery within 24 hours. Knowing ahead of time when more sales will occur makes it easier to organise work shifts and stock only what is required.
Advantages of integrated logistics
- Increased speed
Agility is achieved by removing impediments and maximising operations that provide more value when manufacturing products. It also allows you to respond to customer needs, as well as incidents and problems, in less time.
- Business competitiveness
Companies that have strong, integrated logistics systems are more competitive and can thus successfully expand and explore new markets.
- Lower costs
Understanding the intricacies of the supply chain is essential for implementing improvement measures and optimising any type of process. Reduced logistics costs result from increased throughput.
- More flexibility
Companies can easily manage a larger number of SKUs and adapt to the ever-changing and unpredictable environment in which they operate thanks to integrated logistics.
- Efficient inventory management
Goods management is foolproof when all departments share all information. Firms have only the items they need to provide service in this manner.
Integrated logistics solutions
Technology advancements have facilitated the implementation of integrated logistics in organisations and good communication between departments, optimally connecting the supply chain links.
ERP (enterprise resource planning) systems are used by businesses to organise their various business processes because they have a database that is shared by all departments. Regardless, it is recommended to implement a warehouse management system (WMS) to more effectively control warehouse flows.
WMSs also collect procedure data and monitor and optimise everything that happens along the supply chain. This software must be integrated with the ERP system in order for the firm’s departments to access and share information.
This module measures operational performance objectively using key performance indicators (KPIs) (key performance indicators). Businesses can control their processes and, as a result, understand and improve them with the help of these KPIs.