Leverage your supply chain with optimized logistics flows

Logistics flows are the key point of the Supply Chain and refer to all the processes that take place during the evolution of the product: from design to marketing. 

What are logistics flows ? 

Logistics flows include all the stages through which a product is going until it is marketed and delivered to the customer. To optimize logistics flows, it is necessary to know how to correctly manage its activities by making resources and information circulate in a complete and fluid manner. 

First of all, the efficiency of the logistic flow depends on the planning done upstream. It is necessary to anticipate demand, to know your stocks, and to opt for the right strategies for transport, sales channels, etc. 

Secondly, the logistics flow can only be optimal if the different departments involved in the logistics chain communicate, so as to create an efficient collaboration. 

Logistics flow inventory

Internal flows include all activities carried out in production within the warehouse. This corresponds to the circulation of all materials, raw materials and components as they are processed, manufactured, transferred and stored for the production of the finished product. 

The second type of flow includes flows external to the warehouse. These are both the movements of materials as they are supplied to the warehouse (supply or upstream flow) and the movements from out of the warehouse to the customer (distribution or downstream flow). 

To manage these flows, companies opt for strategies that decide the rhythm of these flows :

• The company uses the push method (Make to Stock) to manage the flows so that the stocks are foreseen and anticipated, based on the forecasted demand and the market state. There is therefore production without any certainty that it will be sold. This blurred space between production and actual demand can lead to additional costs in case of overproduction (overstocking) or underproduction (shortage),
• The pull method (Make to Order) consists in launching the production of the product only if real demand there is. There is no stock in the warehouse, which avoids additional costs. However, since we wait for the customer's order to manufacture the product, delivery times are longer, 
• The objective of the just-in-time method is to supply the production line at the exact moment that orders are received. With this method, the logic of "Just-in-time" is followed, according to which materials and resources arrive only when they are needed. The company then has virtually no inventory. To succeed in this challenge, it must therefore have an efficient and optimized supply chain, 
• The company works in synchronous flow, when it obtains materials only once the production stage in which they are required has arrived, to allow for a just-in-time delivery.

The benefits of efficient logistics flow management

Obviously, a good management of its flows allows the company to gain in productivity and to increase the rhythm of production by avoiding errors and slowdowns, stock-outs, misunderstandings between the participants, etc.

A good flow management and especially a well-considered choice concerning their management strategy (Just-in-time, Just-in-case, etc.) allows a better stock management. The company must know if it is necessary to have a lot of safety stock (buffer stocks to anticipate stock shortages) or if on the contrary, it can release its stocks and wait for order orders. 

A reliable management of logistic flows finally guarantees a better performance of the company. It becomes competitive to reach larger markets and, above all, it increases customer loyalty. Customers are satisfied with their purchasing experience and increase their confidence in the company. 

How to optimize the logistics flows of its Supply Chain ?

Opting for a flow strategy is only possible if the company's logistics flows are managed and optimized. By mapping out your logistics flows, you must first be able to identify unnecessary and superfluousmovements. It will then be possible to avoid overproduction, waste and to better control the reception of materials in the warehouse.

Once the low-value or even useless actions have been eliminated, it is possible to concentrate on the parts of the production chain that are worthwhile. The follow-up of the production and the analysis of the actions carried out is thus easier for a fast and effective implementation of the corrections to be made. 

In order to manage your supply chain and make the right choices, you need to take a step back. A stock and flow management tool is the best way to have an intelligent and simplified view of the logistics flows.