Managing the logistics of a company is far more than just taking care of its transportation needs. The concept of logistics management started in the 19th century with World War II by the British military and has turned into a science that helps businesses reduce their costs and eventually increase their profits. The development of logistics management as a sector has revolutionized the trade industry. For bigger companies, it is a norm to have experts manage their supply chain, whereas medium and small-size companies are still largely dependent on transport providers, which do not look into anything but just the movement of goods from one point to another.
Understanding the Difference Between Supply Chain Management, Logistics Management, Transportation
Transporting goods from one point to another is done by carriers. The transporter’s responsibilities are restricted to the safe and secure pick-up & delivery of goods.
Whereas logistics management is essentially managing the flow of goods right from doing market research activities to getting goods delivered to the end customers. It includes all aspects of
- Procurement
- Distribution
- Disposal
- Reverse logistics
Arranging for transportation is just one aspect of logistics management. But the bigger picture holds all the details to optimize the entire process of getting goods to the end customer in a cost-effective manner for the business.
Supply chain management, on the other hand, is integrating all the information and tasks of a business for better operational efficiency and higher profitability.
What are the advantages of logistics management through supply chain management software?
Businesses incur losses in manufacturing goods when they do not have a system to get all tasks done in a timely manner and without optimum use of the resources. Having a logistics manager for an efficient flow of all the related tasks or having an ERP for supply chain management in international businesses cuts down on these losses & delays. Freight supply chain management, especially in more complicated multinational supply chains, where the procurement, production, storage, and delivery of goods from geographically distant locations involves multimodal transportation, can be efficiently managed by supply chain solutions companies.
To understand the advantages of having logistics & supply chain management read the following:
Improved Efficiency
Planning, assigning, executing, and controlling all the tasks in a single window through automation and error-free processes improve the efficiency of the supply chain manifolds.
Higher cost efficiency
Using all resources to improve business functions to get ready for future supply chain solutions tracking through predictive analytics of the available data, reduces the chances of any sudden glitches. This overhauling and optimal usage of all functionalities improve efficient supply chain risk management. In a way, future readiness proves to result in better cost efficiency.
Improved productivity
Assigning tasks, and managing and planning human resources, results in improving the productivity of the system at all levels.
Reduction in Delays
Practices like efficient planning of resources and tasks, continuous tracking, and future supply chain solutions tracking reduce the chances of delays anywhere in the supply chain.
Quick problem Identification
A single window for all departments provides integrated information on each step of the supply chain. Clear visibility of these processes leads to quick identification of problems and therefore a quick resolution is possible.
What are the disadvantages of logistics management via supply chain management software?
With clear benefits of supply chain management software to improve logistics and business efficiency, here are a few factors that can prove disadvantageous:
Expensive to implement Software
While there are several cost-efficient benefits of implementing ERP for supply chain management, it is not an inexpensive affair for small and medium-sized businesses. The initial implementation is often not affordable for such businesses.
Requires trained experts
Getting a hang of the software requires training the current workforce or hiring trained experts. Not having the financial resources to get expertise in integrating the system and making full use of it, results in heavy losses.
Miscommunication challenges
Integrating all stakeholders on one platform is often a challenge. Missed communications are one of the common reasons for delays in resolutions and subsequently in the delivery of goods.
Competition with Larger companies
Multinational companies with international and local supply chains flourish with the integration of technology because of the availability of resources. Small and medium-sized businesses struggle to cut this competition even after implementing efficient supply chain management software.
Conclusion
Now that we know both the pros and cons of using supply chain management software to improve logistics functions, we need a solution that can convert or nullify the cons.
To tackle this we recommend looking out for solutions like Cargoes Supply chain Solutions. The cargoes suite of ERP solutions gets the best technology onto a single integrated platform that has simple dashboards to represent all the data across all departments involved in the supply chain. It uses AI and machine learning to predict and automate tasks for efficient flow in the supply chain. The Cargoes ZMS (Zone Management System) takes care of managing all the commercial, financial customer service, compliances, and operational aspects of a supply chain without having to implement any infrastructure on-site. Cargoes Rostering, on the other hand, takes care of improving the productivity of the workforce through automated task assigning, and efficient leave and payroll processing. Both these ERPs for supply chain management software combat the disadvantages such as requiring heavy investments in implementation and training.
With the ever-increasing demands for quicker deliveries, improving the efficiency of the current systems is one sure-shot way to propel international shipping businesses into success and enhance profitability. Scaling small and medium-sized businesses is easy if the supply chain management software suffices to the current requirements while utilizing its resources to the maximum.
