Magazine article Industrial Management

Framing High-Performance Logistics

Magazine article Industrial Management

Framing High-Performance Logistics

Article excerpt


Managers can help their companies improve logistics measures based on four categories: time, cost, efficiency and effectiveness. A framework for high-performance logistics presents the concept that procurement, transport, warehousing, distribution and maintenance processes can be integrated into one super-system for quality control and productivity improvements.

When resolving problems in the business activities of large-scale organizations, there is a tendency of achieving best results with the least invested efforts (otherwise, expecting maximum results while reducing costs and invested capital). A compromise between costs and capital investments that are necessary for supporting the company's fundamental systems should be established while specifically aiming for profitability, productivity or customer satisfaction. As a rule, elements determined as a support to the functioning of the system are considered through logistics activities. Therefore, the basic goal of a logistics subsystem is the accomplishment of maximum results on several levels that are each identified through adopted criteria.

Determining what logistics subsystems would best contribute to any business that involves a supply chain is a complex area of organizational strategy. Separate elements must be monitored closely for changes or compromises. Improvements must take compromises into account before true results are realized.

The logistics subsystem in an organization is seen as a functional part of the hierarchy responsible for the generation of support in its integral form (Figure l). Goals of the logistics subsystem result from the tasks an organization has regarding what product-service bundle will satisfy the market. In business systems, with the help of marketing and market research, managers are informed of what the market demands are and what area the system can be competitive in. As the needs are rather susceptible to time changes, the logistics subsystem must be able to adequately and accordingly change in short time periods. In order to live up to its potential, the logistics subsystem should be measured and evaluated. The hope is that its performance will be an encore every time.

Unfortunately, many organizations haven't even defined their measures of performance, which means that they can't benefit from a logistics subsystem. There isn't one in place! A few questions about your organization could warrant the design of a new subsystem today: Is your company facing increasing pressure to reduce costs by more than 5 percent? As a manager, could you honestly say that you know and understand every cost associated with your product or service? Is your company's mission stated in writing with specific strategies to carry out that mission? Can the strategies change as long as the mission remains? Do you know how every department of the organization functions?

Whatever the answers, as long as there is an organizational mindset to prosper and follow processes to get to the end result, a logistics subsystem can target and improve at least one category of your business, such as material, employee performance, information (type and process of capturing/saving it) or finance.

Organizational upkeep

Procurement logistics represents a batch of activities that provides the resources required for productivity attached to certain deadlines, under most favorable conditions, and with the goal of providing material flow continuity.

Maintenance of a logistics process implies the task of designing, implementing, monitoring and improving maintenance policy while providing a satisfactory level of technical effectiveness with minimal costs. Today, it implies the implementation of proactive maintenance, reliability-based maintenance, computerized maintenance management systems and total productive maintenance as well as approved traditional methods.

The logistics process of warehousing implies harmonizing defined goals through maximum repletion and minimal warehousing costs. …

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