Logistic refers to managing the flow of various products from their point of origin right up to their final destination. In many companies, entire departments and huge teams have been formed whose sole purpose is effective logistic management. Besides transportation and shipping companies, port facilities such as Canada’s Port of Montreal also offer logistical services through websites such as Verschiffung USA, designed to offer German exporters access to key logistics information.
When shipping companies are interested in analyzing their information which is relevant to incoming and outgoing transportation, they conduct a logistics audit. The same is true of other activities such as warehousing, trade compliance and stock management. The logistics audit procedure functions by pulling numerous components of supply chain practices. This helps an organization in determining which strategy is efficient and contributing to results, and which processes are not affecting the overall performance noticeably. This can be done by breaking down a process into its part, and analyzing each of them individually to determine which factors lower down efficiency.
Shipping companies are hired by a firm when it is not capable of conducting an internal logistics audit by itself. Basically the task of performing an audit is then assigned to the shipping company. The costs incurred in this are affordable, especially if a reliable source of information such as Verschiffung USA is made available.
There are many advantage of assigning this duty to an outsider. The company gets a new perspective on things because everyone has their own way of analyzing and concluding results. Moreover, the results are neither biased nor conflict with other interests or issues.
Here are the basic steps involved when a logistic shipping company analyzes a supply chain process.
Step 1
The first step involved in the process is to observe individual functions and processes within the company. This helps in getting a clear picture of the operations management being conducted in the organization, and is generally not biased in any aspect. Often individual managers are talked to in great detail so that the logistic shipping company can fill gaps in their knowledge, link information, and maintain a flow.
This also gives the logistics company an idea of how decisions are made and the hierarchical levels which are observed within the company. All the information gathered is used to draft a proposal.
Step 2
All the information generated in the previous step is used to devise a supply chain strategy. Then suitable metrics are determined, and these are used to measure efficiency of the proposed strategy. These metrics are generally related to central elements and processes such as transportation management, productivity management, global supply chain visibility, warehouses and distribution centers.
Step 3
When a certain plan has been decided upon, the logistics company will then start negotiating the agreement terms. The necessary resources that would be utilized in the program are determined and the total expected financial costs are calculated.
Step 4
The actual audit is performed at this step. The current operations being performed are then further assessed at a deeper level so that inefficiencies can be identified. This is done by comparing the current processes to their ideal counterparts. Assistance from each department is required to collect key performance metrics or derive them when data is being collected.
Step 5
When all relevant data and information has been accumulated in one place by the audit, the results are analyzed. Valuable conclusions are drawn from the results such as improving the speed and increasing productivity. These are then reported to the company and suggestions on eliminating the inefficiencies are also given.
The tasks of logistic shipping companies are over after the fifth step. However, the hiring authority still needs to play its role. After they receive recommendations from the shipping company, they decide which of them are in budget and can be implemented without burdening operations or finance.
Even after implementations have been made, the process is not over as yet. The whole analysis is conducted again to gauge if previous inefficiencies have been removed after making the improvements or not. If the results are negative, the entire process has to be repeated all over again.
About the author
Celina Jones is an expert in supply chain practices. This can be gauged from the fact that she has played a key role in designing a leading edge website such as Verschiffung USA.