Logistics processes: how to optimize performances to reduce costs
In recent years, the demand for efficiency in logistics processes has become more and more compelling. The main factors that led to this situation are, on one hand, the growth of cargo volumes handled and, on the other one, the increasingly higher standards of cost-effectiveness and service quality.
The demand is driven by the e-commerce boom that, according to studies referring to the US market, generates a gain between $ 12 and $ 20 for every $ 100 in online spending for logistics, operators in this field study new solutions to manage warehouse uptime. These may result from the application of lean models and, in concrete terms, from a stronger digitalization.
This way, processes automation and the application of Industry 4.0 to intralogistics guarantees a higher productivity of up to 70%. On the other hand, these elements allow to reduce significant fixed costs and optimize the use of resource management. A result made possible by some key factors, able to improve the efficiency of logistics processes and, at the same time, reduce costs.
Logistics processes: optimization by improving asset management
The correct management of assets is the first point on which action should be taken to improve performances. It suffices to think that handling activities – such as picking – can impact up to 55% on the total costs of warehouse performance.
Low efficiency in these activities produces:
- high handling times;
- irregular workflows;
- lines and mismatches in the execution of missions.
An Industry 4.0 approach, based on IoT (Internet of Things) and artificial intelligence (AI) algorithms, allows to achieve more organized and efficient processes.
Sensors and telemetry technologies improve visibility on processes and resources, and allow them to be managed in real time. As a result, retrieval time of goods and route scheduling times decrease, not to mention the fact that workflows become more streamlined. Simply put, the general warehouse efficiency improves.
This increase in performance corresponds to a parallel reduction in inefficiencies (for example, trips without load) and, therefore, a reduction of operational costs.
A more reasonable workload
Digital logistics processes management solutions also allow to use in a more productive way the work of handling operations employees.
In fact, a more reasonable use of the resource management can also lighten workloads. After all, by improving the level of visibility on goods and equipment, handling operations become easier.
By combining AI and IoT, it’s possible to automate several processes especially those involving repetitive and low value-added operations. This produces undeniable benefits in terms of performance, but also in the quality of work of the employees.
An important consequence of a 4.0 management of intralogistics, lastly, is the increase in safety standards: more reasonable and rules-based processes eliminate, in fact, several risk scenarios, such as collisions between vehicles.
Missions management for more efficient logistics processes
The application of artificial intelligence algorithms to logistics processes makes the planning, assignment and execution of missions efficient. AI-powered solutions act as a “conductor”, coordinating the waves of missions according to demands and availability of the moment.
Independently, or integrated with other warehouse applications, these systems can dynamically manage the assignment of missions. The algorithms of AI analyze in real time the context, tasks and priorities, and coordinate operations accordingly.
This way, from the waves of missions, it is possible to obtain continuously organized and monitored lists meant to identify – or rather anticipate – any critical issue, as well as to promptly respond to changes in status or availability of resources.
The performance measurement goes in double figure. Of equal amount is the saving in management costs, whenever problems due to misalignments, bottlenecks or other inefficiency factors are avoided.
Digitalize to improve operations planning
Advanced digitalization of logistics processes improves not only execution, but also planning. From the processing of the generated data, a precise analysis of performance and scenario simulations can derive.
The efficiency of the operations is measured starting from the actual logs, and potential optimizations are studied with a data-driven approach. Scenario simulations also allow to accurately verify potential corrective actions and apply them quickly.
The advantage that occurs on warehouse performance is impressive: from the point of view of costs, potential inefficiencies get promptly corrected and it is possible to proceed with a preliminary check of costs and benefits offered by possible alternatives.
