Integrated logistics as a competitive advantage

Integral or integrated logistics is an indispensable strategy to achieve a flexible supply chain. And how does it achieve this? By taking the general concept of logistics a step further by adding activities aimed at planning, implementing and organising all areas of the company to manage the information related to the logistics process in order to deliver orders to customers in the shortest possible time.

To achieve integrated logistics, companies need to be aware of the importance of good supply chain management. They must be perfectly aware of each of the parts that make it up and thus be able to make a difference, thus providing a competitive difference to the logistics company.

In this post we will see what integrated logistics is, its functions, what benefits it brings to companies and how to implement it.

What is integrated logistics?

Integrated logistics is an organisational model where resources, goods, information, operators and departments related to getting the final product to the customer are fully synchronised.

Unlike traditional logistics, where a specific company can subcontract another company to take care of transport or storage, in a business that applies integrated logistics, the departments, processes, resources and flows will be permanently coordinated to operate all in the same direction, managing all its processes without contracting third parties.

Functions of integrated logistics

As a general rule, the functions of an integrated logistics service are inventory control, operational warehouse processes, transport of goods, traceability and reverse logistics. These are discussed in more detail below:

1. Organisation of the warehouse and inventory control: the organisation of space is a basic aspect in order to be able to execute an adequate logistics process. Maintaining an orderly stock and a correct preparation of orders will bring a series of benefits: firstly, for the operators, who will carry out their tasks in a more agile way, and secondly for the end customer, who will receive their order more quickly.
2. Transport of goods: this is the movement of an object that can be traded from a place of origin (where the goods are loaded) to a destination (where they are unloaded).
3. Traceability: this is the location of the same goods mentioned in the previous point in the space and time required. To properly manage the different types of traceability, it is essential to have adequate information systems.
4. Inverse logistics: having the flows of all the processes within the supply chain that is dedicated to taking certain materials from the consumer and transferring them to the manufacturer properly defined is a basic factor in guaranteeing customer service.

In order to carry out the above functions, companies must be based on the fundamental principles of responsibility, foresight, sufficiency, visibility, flexibility, economy, simplicity, timeliness, community, order, security, coordination, priority and continuity.

Advantages of integrated logistics

The fact that the departments, operations and flows of a business are coordinated produces the following benefits:

• Speed in the processes: with an optimised integrated logistics there will be more agility in the process. By this we mean that we will respond more fluidly to the needs of customers and we will respond to or solve possible incidents. In addition, optimising the resources of the entire logistics distribution chain will mean less administration costs and an improvement in business policy.
• Increases business competitiveness: with integrated and strong logistics, the business will be able to make it more difficult for the competition while it will be able to expand and integrate into new markets more easily.
• More profitability: optimising processes and actions in the production chain introduces a profitability advantage.
• Lower costs: with more information from the supply chain, we can take measures to improve and optimise any process, such as better control of stock and transport, among others. Optimising these actions will lead to a significant reduction in logistics costs in the future.
• More quality: the production of products will be optimised, so that they will be of increasingly higher quality.
• Total flexibility: by implementing an integrated logistics system, companies will be able to manage a greater number of references with ease, adapting to the environment as it changes. Flexibility is a fundamental quality in new companies.
• Management of merchandise and better service: implementing an integrated logistics system in which all departments share information will facilitate the management of merchandise. This will make us faster in our response to the customer, even surpassing the competition.

How to achieve an appropriate integrated logistics system?

In order to be able to implement an integral management that is advantageous for our company, we must carry out a series of aspects related to this subject:

1. Define the global vision and objectives of the company and direct logistical efforts towards the fulfilment of these.
2. Analyse and consider the needs of potential clients.
3. Manage the cost of the supply chain (creation of the product, storage, transport and distribution).
4. Use technological tools in order to automate and optimise processes.

Vision of integrated logistics as a competitive advantage

Nowadays, the advantage over competitors is becoming a necessary aspect in which integrated logistics plays a fundamental role. Innovation, service improvement and growth as an organisation are factors that help to build the required integrated logistics system.

Currently, there are many companies that do not have the possibility of storing and transporting their own merchandise, so they have to outsource these processes. If this is your case, don’t hesitate, make sure you hire a company that offers the highest possible quality in each and every one of the logistics storage and transport processes, with experience and capacity.

You will have to ensure that the organisation to which you give this commitment can carry out the functions of product reception, storage and classification, order preparation and distribution, so it is essential to have someone who provides comprehensive logistics, thus allowing the company to meet its needs to customers and consumers, always within the deadlines.