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logistics management focused on the integration of operations

Apr 19, 2018

In the past, logistics management focused on the integration of operations and organization within the company. The correspondence to downstream customers was centered on service and quality. therefore,

Modern logistics

Modern logistics

The criteria for evaluating the performance and effectiveness of logistics management are mostly measured by the speed, delivery rate and completion quality of the order cycle time.


With the development of the logistics industry, adding new content to the supply chain management model, the logistics industry has emerged ten new trends.


(1) The management of logistics from material handling has been upgraded to design, solution, and management of value-added programs. Tailor-made and personalized services can be provided to customers. Enterprises gradually shift their emphasis on the integration of cross-enterprise boundaries, making the maintenance and management of customer relationships more and more important.


(b) From opposition to union. In the traditional business channels, most companies are self-centered and pursue self-interest, which often results in a situation of opposition between companies. However, driven by the pursuit of greater competitiveness, many companies have begun to integrate in various commercial circulation functions. Through joint planning and operations, a highly integrated supply chain channel relationship has been formed, which has greatly improved the overall performance and effectiveness of the channel.

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(c) From forecasting to final measurement. The traditional circulation model carries out various logistics operations by predicting the resources of the downstream channel. Unfortunately, the prediction is rarely accurate, thus wasting a lot of natural and commercial resources. Emerging logistics management trends emphasize the joint mechanism of channel members. Members are willing to exchange information on operations and strategies, especially internal demand and production data, so that upstream companies do not need to predict, and the circulation mode gradually changes from the prediction basis to the end. Measurement of basic development.


(d) From experience accumulation to change strategy. The experience curve has always been a method used by companies to analyze market competition trends and develop corresponding strategies. The company has accumulated years of experience as the main competitive weapon. However, the rapid progress of science and technology has made it an obstacle to the development of enterprises. Therefore, in the context of a changing scheduling environment, experience and existing channel infrastructure have become the most difficult obstacles to overcome. Successful companies must establish a system of olfactory and continuous change management of strategic direction in order to survive.


(5) From absolute value to relative value. The traditional financial evaluation only looks at some absolute values. The new evaluation method will focus on the creation of relative value, that is, providing value-added services in the channel, and what percentage of the value the customer can increase.


(6) From functional integration to program integration. In an increasingly competitive environment, companies must respond more quickly to the needs of upstream and downstream customers. It is therefore necessary to effectively integrate the operations of various departments and operate with a procedural operating system. Logistics operations and activities are likely to have cross-functional functions. Due to the characteristics of the company, procedural integration is the key to the success of logistics management.


(seven) from vertical integration to virtual integration. In the traditional channels, some large enterprises have carried out vertical integration of channels in order to grasp more power through the use of the facts. This has proved to be unsuccessful, but it has dispersed the resources of enterprises and weakened the main business. Today, the trend of business operations is to focus on core business and entrust non-core businesses to professional management companies to form a virtual enterprise integration system so that the main companies can provide better products and services.


(VIII) Turn from information retention to information sharing. Under the supply chain management structure, related companies in the supply chain must share the information needed for supply chain integration with other companies. Otherwise, an effective supply chain system cannot be formed.


(9) From training to knowledge learning. In the foreseeable future, any logistics process will be completed manually. However, most logistics operations need to be carried out in each logistics base and transportation network. About 90% of the time, logistics managers cannot monitor them in person. The trend of globalization has also increased the complexity of logistics human resources management. The logistics manager must shift the training of individual personnel skills to the development of knowledge-based learning.


(10) From management accounting to value management. In the future, many companies are willing to invest a lot of resources to establish a basic accounting system, focusing on providing value-added creation, cross-enterprise management information, in order to be able to confirm the operations that can create value, not just the increase in revenue, the cost up and down.