Logistics in Manufacturing

Manufacturing is the mainstay of many organizations today. Organizations depend upon logistics to ensure that their manufacturing processes remain in tune with current demands and market trends. According to the Council of Supply Chain Management Professionals (CSCMP), logistics can be defined as a process where "planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point-of-origin to point-of-consumption are carried out for the purpose of conforming to customer requirements." Routine aspects of manufacturing include proper management of inventory, supply chain efficiency, cycle time, manufacturing quality, warehouse management, product packing, and shipping products to vendors.

Logistics assists management with the day-to-day problems related to manufacturing, and it plays an important role in providing the right solutions to management. A number of key areas in manufacturing where logistics can play vital roles are the following:

Manufacturing Facilities



At times, organizations look to expand their manufacturing capacities due to growth in business. This may mean that they need to optimize their manufacturing and production capacities to keep their businesses competitive.

Furthermore, global economies dictate that manufacturing facilities be located in cost-effective environments so that organizations can remain sustainable on a global scale. Many business situations demand that manufacturing abilities be scaled up or down depending upon demand for the product, manufacturing costs, and related factors. Logistics provides necessary and practical solutions to organizations so that they don't face obstacles at any stage in their manufacturing processes.

Supply Chain Management

Logistics also plays important parts in the supply chain component of manufacturing. Manufacturers are always on the lookout for quality, cost-effective solutions for their supply chains when they ship spares and components to a variety of sources.

Inventory Management

Organizations strive to achieve optimal inventory levels so that they can manage demand effectively. High inventories can hamper production, whereas lower levels can cause a gap in supply and demand. Logistics can assist organizations with balancing inventory levels so that they are able to service customer requirements effectively.

Demand Forecasting & Planning

Organizations are routinely concerned with product demand. Logistics helps them match their manufacturing capacities to current requirements which, in turn, affect the requirements for components and spares in the manufacturing process. Logistics also helps determine the quantity of supplies required in order to ensure that production reflects product demand in target markets.

Materials Handling

Logistics also assists in the movement of raw materials within manufacturing organizations and helps with material handling processes—from the procurement of raw materials to handling the work-in-progress—until the goods are finally manufactured.

Transportation

After organizations manufacture and package their goods, the goods are ready for delivery to vendors. Logistics helps organizations choose the best means of transportation, whether by sea, road, air, or rail route, in order to optimize cost and time.

Warehousing

In cases where warehousing is required, logistics helps select suitable options that will best enable organizations to reach customers in different geographical areas. This helps maintain optimum stock.

For organizations, logistics provides an important link to manufacturing and, ultimately, to securing customer satisfaction. Logistics acts as a much-needed balancing agent between organizations' production abilities and market requirements. For this reason, it is the fundamental backbone of manufacturing organizations today.