Logistics, whose focus is on optimizing processes and results, is a strategic area in companies.
It makes so much difference in the business routine that gave rise to another concept: integrated logistics, which seeks to improve communication between people and areas, both inside and outside the company, integrating the activities.
If logistics operates on operational processes, such as inventory management and transportation, integrated logistics manages every step of a product’s life cycle – purchasing area, production process, movement, distribution, information flow – from in a more strategic way.
To leverage the company’s results, the concept of integrated logistics plays a key role in the current model of relationship between customers and companies.
Integrated logistics has been made possible thanks to technological advances and the need for companies to adapt to the demands of agility, reduced costs, quality and good experiences, currently required by the consumer.
Just imagine the inventory of an online store that is not integrated with the e-commerce platform, because the sectors involved in the supply chain are not integrated. When a sale is made, it may happen that the product is not available in stock… Have you thought about it?
Thus, integrated logistics organizes all the activities of the company’s sectors simultaneously and organized, from the origin of the raw material to the transport and distribution of products to the consumer.
Difference between logistics and integrated logistics
In the past, logistics managed only stocks, handling and transportation. Integrated logistics is responsible for purchasing, storage, production processes and other transport stages. In addition, it monitors the activities of suppliers and customers to integrate the processes widely. And it allows interactivity and integration between the processes and the various sectors of the company. Its function is to manage the supply chain more strategical
How integrated logistics works
Communication is at the heart of integrated logistics.
In order to promote a true integration, the sharing of information from each area is fundamental and absolutely necessary for making the right decisions.
For example, a company’s inventory sector provides information to the purchasing sector to evaluate what you need to buy.
The purchasing sector, in turn, triggers the supplier in order to acquire the appropriate quantities of products —enough to meet demand, avoiding shortages and excesses.
All information is shared through software that controls the entire flow and controls the various activities.
But it is necessary to determine who will be responsible for the various activities involved, and what control will each step have.
Integrated logistics ranges from the receipt of the raw material to reverse logistics, through all phases of transport of products, including:
- Receipt of suppliers;
- Processes of the purchasing sectors;
- Distribution of goods;
- Processes of delivery of products to customers;
- Monitoring the activities of its Suppliers and Partners;
- Reverse logistics
Advantages of integrated logistics
By organizing all the activities of the company’s sectors simultaneously and optimally, from the origin of the raw material to the transport and distribution of the product to the final consumer, benefits are reaped:
- Greater control over logistics flow;
- Reduction of operating costs,
- Optimized and organized processes;
- Agility of the production area;
- Reliability of information;
- Minimization of waste;
- Early diagnosis and solution of failures and errors, which can generate costs;
- Reduced product handling time;
- Alignment of all processes;
- Effective planning
What your company gets out of integrated logistics
1 – Improvement in material management
Inventory management is critical to ensuring demand supply while being able to reduce operating costs. With integrated logistics, management is not limited to warehouse operations: it starts in the purchasing sector, with the appropriate acquisitions, and goes until the moment the customer receives the order. The monitoring of each step allows you to identify the flaws and actions necessary to optimize the flow of products.
2 – Agility in processes
Improving communication —provided by information sharing—makes processes more agile and reduces error rate. Similarly, decisions are now made based on broad and reliable information, promoting agility. Thus, the process follows a continuous flow, without interruptions due to lack of information from either step or lack of synchrony.
3 – Increased productivity
Fixing failures and optimizing processes along the supply chain helps identify the best working method: improvements in the environment, such as layout change; the elimination of unnecessary steps, and better structure of teams, making professionals more productive and efficient
4 – Cost reduction
Cost reduction is also one of the benefits of integrated logistics, and can be achieved through increased productivity, reduced errors and the need for rework, waste reduction, etc .
5 – Information integration
The use of automated management platforms that work in an integrated way allows you to have an expanded notion of everything that happens. Quick access to useful data and information to work contributes to more efficient decision making, as well as facilitating the monitoring of metrics and logistic indicators, such as efficiency, productivity, etc.
6 – Risk management optimization
With logistics automation, most of the risks involved in the various processes and steps are eliminated.
Delays in deliveries, for example, become rarer, because automation allows broader control of tasks, enhancing the monitoring and identification of failures and bottlenecks before they generate problems. In addition, automation helps improve cargo travel safety through full-time fleet monitoring, routing, etc .
Bet on integrated logistics
Investing resources and dedication in integrated logistics is undoubtedly a necessity of the current market. More than that, it’s a strategic issue to make your business more competitive.
If you are convinced that you need to deploy integrated logistics in your company, contact Sequoia
The largest logistics operator of e-commerce and technology in the country, with expertise in complete and integrated logistics solutions, Sequoia offers the best solutions according to the needs of each company.