According to several experts, logistics is the operational word for businesses in the future. But, what exactly is logistics and how does it affect project management?
According to many, logistics is just the movement of goods. But this is a narrow view. The physical handling of goods is logistics. In general, this would include transportation of goods via sea, air or rail.
But there is more to it than this. In a much wider sense, logistics involves the physical layout, plant location, purchasing and even waste disposal. Effective logistics involves proper management and planning, accurate forecasting, inventory management, transporting, supervising of loading and unloading, customs clearing, cargo insurance, stowage supervision and warehousing. In short, logistics is the delivery of items accurately, efficiently and in a time bound manner to the place and person it is meant to be sent.
Since many projects these days are dependent on the timely delivery of inventory, proper logistics support is an important necessity. In any case, companies shell out approximately 10-35% of their total revenue on logistics. That is in itself evidence of the importance of logistics support in project management. Globalization, free market and high competition has made it imperative that companies deliver and receive with clockwork precision and on time.
Any project is a time bound assignment. Delays caused by faulty logistics cause not just loss of revenue but also lead to the loss of reputation and customer satisfaction. These are priceless assets, which are almost impossible to recoup once lost. That is why experts say that proper planning is the key to great logistics.
For reputed companies, project logistics involves the management and handling of large shipments on a global basis. These shipments would involve heavy equipment, oversized cargo and cargo that is completely time sensitive or requires a very high degree of security. To offer complete project logistics, companies often undertake feasibility studies and come up with customized, tailored solutions. This is the mark of a great logistics expert.
Some projects involve tricky requirements. It is up to the logistics team to orchestrate even the most complicated supply chains. To be viable and successful, a good logistics partner must bring with them several qualities:
– They must be competitive in their price while offering turnkey solutions that the project requires
– Route optimization must be a priority
– Complete planning and end to end solutions must be provided seamlessly
– Must provide single points of contact for all services through strategically positioned hubs.