Automated Logistics and Rationalization: examples and projects in a structured reality.8 min read

Logistics management in a company is a determining factor to qualify as a structured reality; if on the one hand the “human” organization guarantees more user-oriented results and on the other hand the process automation is proving to be increasingly necessary. Solutions and projects are therefore under review every year.

Guaranteeing quality logistic flows does not just mean organizing outbound shipments and working on returns. We certainly speak of transport quality, routes optimization and costs; a fundamental component, however, today is the automation of logistics, which guarantees a rationalization of the whole system and more efficient results in the short and long term. All this in order to re-enter the new rules of the circular economy in a prompt and adequate way.

Optimizing logistics requires several operations

Whether we are talking about inbound logistics or outbound logistics, the optimization process, understood as a strategic approach to the various processes involved, requires the adoption of multiple points of view and ongoing improvements.

Reviewing both the communication and management channels is a fundamental step. The evolution of business processes in an increasingly digital direction has required and still requires a considerable effort for the companies involved with our logistics services. If in the past a more direct, personal orientation was common practice, today relying on management systems and software systems is (finally) the most followed trend. This implies the breaking of an individualistic bubble that characterized the different channels involved in the supply chain, speeding up the whole process and consequently converting into results that tend to grow more and more.

Looking at the situation from a point of view that leans towards the circular economy, the process as a whole could have significant results, both from the point of view of cost and performance optimization. Not only that the adoption of specific company practices that push towards this solution have resulted in positive feedback from the majority of consumers. This amplifies, in terms of awareness, the presence on the market of the companies that have thrown themselves into this game.

An actual example

We asked Loris Fioresi, Logistic Manager of MBK Fincom and ProduceShop, to tell us some examples of IT implementation in ProduceShop Logistics management:

“A crucial decision was to focus on our IT and Development department; despite the fact that we are talking about a small team, we only employ highly qualified technicians and specialists. The corporate policy of selecting talents not only on the basis of education, but on the range of transversal skills they present, has allowed us over time to organize an extremely well performing IT team, even if small. Therefore, the creation of ProduceShop suite of completely in-house and tailor-made software has allowed us to expand operations and the field of action also in logistics management; we implement the entire supply chain with ”home-made” applications and specifically designed them for the volumes we ship and manage, also succeeding in pairing with third-party logistics services.

This is a job that requires extreme attention; therefore, having entrusted us to third-party logistics did not affect our intervention. We have decentralized not only the process, but also some specialized partners and professionals, both for the management of logistical processes and for monitoring. The quality control issue is important to us: order processing standards, goods acquisition, delivery, packaging, everything is scrupulously examined. Precisely in relation to the packaging, we rely on meticulous checks on each outgoing package, whether it is perfectly sized, filmed and arranged appropriately for delivery. We also carry out targeted sample checks on outgoing goods, to prevent faulty or inadequate goods from leaving.”

Transport solutions

Another guideline on which to move is the optimization of the transport process, especially outbound.

In this case, the necessary measures to be adopted are of an organizational and managerial nature, with a strong component in terms of control.

To present a non-exhaustive list of some logical operations, we could say:

  • adequate choice of the means of transportation: this implies both the quality of the means (in terms of capacity and efficiency), and the number of means used; the two variables are however connected: greater efficiency implies a smaller number of means used;
  • improvement of transport routes: the part where the rationalization process should be most significant. Calculating transport routes and constantly updating them implies an increase in results in terms of output, and a consequent return in costs and authority;
  • adjust the flow of goods: this factor includes the manager’s common sense. Overloading the delivery carrier, although it may seem a logical and functional solution, generates more problems than it can solve. Adjusting the flow according to the possibilities and the rationalized itinerary is today the best solution; especially if you want to avoid critical issues deriving from incorrect delivery;
  • transport costs: the calculation and reorganization of transport costs is never seperated from the completeness of the purchase funnel. If many companies today choose to pass the costs relating to logistics to the end customer, more organized companies, such as ProduceShop, are able to segment the process in such a functional way as to reduce any gaps without affecting the final price of the specific product. A result that, over the years, has proved to be a winning strategy in terms of marketing and corporate image;
  • summarize the previous maneuvers to minimize consumption: perhaps the character most in line with the circular model. By implementing all the measures set out above, consumption and, consequently, emissions are minimized. When you choose to pursue a vision that focuses on green and sustainability, this kind of commitment turns out to be not only useful, but crucial; both from the point of view of responsibility and to the adaptation of a more global model.
Automated Logistics Management

Towards a unified logistics system

For most companies, the goal is to move towards a unified logistics system. But what does this mean?

If before, the different stages of production, storage, management and transport were separate entities, which required enormous sacrifices from the point of view of mutual understanding and communication, today complex but interdependent ecosystems are created. Fluid communication and constant corporate linking, sharing of platforms and results managed in teams; the characteristics of this type of logistics are increasingly in line with globally shared development trends, in order to adapt to an increasingly advanced and functional standard model.

Then applying these characteristics in the presence of a cutting-edge development department creates a working synergy with extremely profitable implications; the application of IT solutions specifically designed, managed and applied in-house, even in the case of third-party logistics management, makes the entire automation and optimization process much faster and more effective.

Rationalized management of the logistics of an eCommerce

Loris also talks to us about the rationalization of the logistics chain, and about any future projects of ProduceShop and MBK Fincom aimed at improving.

“At the moment we have about ten active logistics companies and our products are already distributed by type in all of them; an automation that checks the products purchased together is still useful for orders. Applying cutting-edge hardware automation to logistics, together with our internal management systems, proved to be the winning move to be able to actively and proactively collaborate with the logistics we have chosen. The necessary processes and algorithms may seem complex, especially since we are implementing the use of Artificial Intelligence, but they are actually very smart solutions.

To make it simpler: if beach umbrellas are often purchased together with beach lounges, the terminal will show that these items are often ordered together; when the order is placed from the supplier, indicating the product, the system will suggest the delivery logistics based on the sales history to avoid duplicating orders and making multiple shipments. Even if some combinations are intuitive and the products are already intelligently divided into logistics, and most of our receipts are mono-product, it will still be useful to have this system to check the “less common” combinations on the percentage of orders with multi-product receipts, and avoid container delivery errors.

Do you have any future projects?

Certainly – Loris continues – there is no shortage of ideas; some already under development.

First, a system for processing returns: in practice it will be an interface with which the logistical workers will be able to access with their credentials and fill in and communicate the returns, which will interface with their internal management systems; a system for reporting defects by customers will be optimized to check the products most often defective or most involved in transport problems, in order to act specifically on specific packaging or eliminate products that are too involved in breakages and problems.

Obviously combined with various alerts that warn us when a product is broken too often, or rejected for damage too often. All this in collaboration with customer care; creating synergy with a department that does not deal with logistics can lead to a faster and more functional resolution of problems; communication intervals between the various teams are avoided, and critical issues are resolved more quickly, perhaps anticipating them.

In conclusion

Logistics management is a job, rationalization and optimization are a challenge. Knowing how to conduct this kind of adjustment within your company undoubtedly requires considerable experience and management skills.

The investments into the choice of the best performing carriers, but also of the partners who fits the most with our objectives, are made with a view of cost saving. Rather than just aiming for savings, we as a company have preferred for example to carefully calculate future returns; all of it without cutting the quality of the services offered.

Sources:
  • Corporate PR
  • Development department ProduceShop
  • Logistics department ProduceShop (https://mbkfincom.com/)
  • Logisticamente: Logistics Magazine
  • Wall Street Journal
  • Stocklogistic
  • Inbound Logistics
  • Les Echos
  • AILOG
  • Sole 24Ore
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