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Logistics Optimization: What is it exactly?

What is logistics optimization?

It is the optimization of all components of the supply chain in order to enable a company to effectively manage the cycle from design to ordering and delivery. The primary goal is to deliver products to customers in a timely manner while maintaining value and quality of the product.

A quick look on the internet for logistics and supply chain optimization will show that optimization is used in everything: Purchasing Optimization, supply chain optimization, inventory optimization, route optimization, transport optimization, freight forwarder network optimization and so on and so on…

All the logistics providers, suppliers, carriers, and consulting firms offer optimization and at the same time argue about what it means. Very few describe the methods that they use and employ to optimize logistics or the aforementioned functions.

Logistics optimization means improving the management of system flow at the global level, from the provider of the provider to the client of the client (i.e. the supply of raw materials to the final consumer). It is to coordinate all the processes in such a way that achieves the best level of performance for the company, logistics, supply, production, inventory, distribution, customer service, information systems.

Whatever aspect of industry – distribution, health, or transport, the performance of the company has an influence on the satisfaction of its customers and its results. A relevant logistics strategy will establish the necessary synergies between remote partners, which is a very effective approach in today’s high-speed world.

Optimizing logistics: What and How?

What do we really want to optimize? What methods do we use?

Logistics is subject to four rules that influence the stability of operational choices:

  • The globalization of markets that lead to making the supply of products, components, and materials possible and from anywhere in the world.
  • Choices of possible strategies regarding production that destabilize traditional logistics solutions and allow for the emergence of solutions where warehouses play a major role
  • A set of strategic choices regarding distribution and commercialization which also affect logistics solutions
  • The emergence of concerns about the environment for which manufacturers and service providers must implement new methods of treatment.