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Choosing air freight solutions for your logistics plan can be a great way to reduce operating costs and to focus resources on priority areas of the supply chain.
The management and administration of inventories are not easy as pie; it requires a correct allocation and management of resources throughout the supply chain.
We can identify two crucial moments on inventory management activities:
1) During the reception of the material
2) During the time that the inventory remains on the facility
During reception
When fundamental materials – whether raw materials or machinery and spare parts – arrive to your facility, impeccable coordination is required to meet the different activities carried out by the different areas:
1. The logistics area must ensure:
1.1 A proper coordination of incoming goods or providers (of “boxes” or “carriers”) as well as
1.2 The proper delivery of products to customers.
Thus, that team must not only ensure the availability of carriers, but must take care of other key elements such as:
A. Ensuring the availability of sites for loading and unloading,
B. Calculating the capacity of the warehouse for loading and unloading products,
C. Coordinating the reception of materials with purchases, planning and imports teams,
D. Aligning delivery itineraries with the sales and customer service areas to ensure it will be on time.
E. Managing the carriers that are inside the facilities,
F. Avoiding delays and charges for non-compliance with loading and unloading hours.
2. The warehouse area also plays a leading role during the reception of products.
The team must include within its activities:
2.1 Visual inspection of materials,
2.2 The validation of the purchase orders to which each material belongs,
2.3 The unloading of the product to the warehouse,
2.4 Recording inventories in your material requirements planning (MRP) systems,
2.5 The allocation of physical space in warehouse and
2.6 Coordinating with the quality area to inspect the space used.
Besides the list above, the warehouse team needs to generate a detailed program of the day’s operation. This plan includes not only the receipt of products, but also:
A. Shipping finished products to each customer,
B. “Assorting” or delivering raw materials and/or spare parts to production lines,
C. Cyclic counts and
D. Periodic reviews of each warehouse conditions.
3. The quality area plays one of the most important roles.
It is the area responsible for approving the use of materials in production lines, which implies:
3.1 Taking samples of products for analysis (visual and laboratory tests),
3.2 Registering the release of materials in MRP systems and
3.3 Coordinating tasks with planning, warehouse and production teams.
In addition to these activities, the quality-assessment (QA) team is also responsible for:
A. Approving the use of production lines,
B. Release finished products and
C. In some organizations, the QA team also investigates – hand in hand with maintenance engineers – the conditions of the production lines.
During the time the inventory remains on the plant
The management of materials does not end with the activities that are executed during the reception of the products.
Once the materials are in the warehouses, it must be ensured that they are kept in optimal conditions to be used. So, it is necessary:
a) Organizing periodic reviews of the conditions of the warehouse, the racks, and the pallets where the materials are located.
b) Executing a physical rotation of inventories (between aisles and racks) according to their use (defined by production schedules).
c) Carrying out cyclical inventory counts to ensure that the quantities shown in the system are available.
d) Carrying out a visual inspection of the products/materials, to ensure that they are in good conditions and, in case of suspicion, re-conducting laboratory analysis.
e) Scheduling and executing the review and monitoring of the consumption plans of the materials, to avoid their obsolescence or expiration.
In short
Managing floor inventories costs a lot more than just the cost of acquisition.
Therefore, designing and implementing supply strategies has a direct impact not only over operating costs but also over the focus and priority of teams in the most relevant activities.
Air logistics solutions reduce these operating costs and enable you to focus all resources where they’re needed the most.
An example
Think of a company called PI©ER. An industry from the Construction Sector, PI©ER builds ceramic floors for interior and exterior areas, as well as bathroom furniture (toilets, washbasins.)
Its main points of sale are stores specialized in products for offices and commercial establishments. This means that their direct customers are not household consumers (housewives or heads of family) but those kinds of stores that have significant requirements in terms of: minimum purchases, periodic deliveries, credits, discounts and even sanctions related to the lack of product supply.
The planning and programming of its production, as well as the projection of the use of its machinery and spare parts, are really challenging. PI©ER relies heavily on the information it gets from B2B specialty stores.
However, these stores do not have forecasts from their final consumers, because their planning is based on the daily consumption of their products.
Due to the volume required to manufacture this type of products, as well as the drying process of each piece, a wide extension of the warehouse is required to store:
- raw materials,
- spare parts and machinery,
- semi-finished products and
- the finished product.
Let’s think about it a little:
How could planners and/or buyers deal with increases or decreases in their products in this type of store?
What impacts would it have on the layout of their plant to significantly increase inventories, just to be able to “react” to the demands of their customers? And what impact would the increase in operating costs have on the global budget?
Can you clearly see the consequences that the increase in inventories would imply at the organizational and process levels?
How could we help find solutions to these sectors?
Conclusion: designing a logistics plan based on air freight services will help PI©ER to reduce operating costs
The development of plans based on air freight solutions – or hybrid plans – helps you place and optimize the financial, human, and technological resources of your entire supply chain.
It also facilitates the attention and execution of your team’s most robust daily activities (delivery to customers, production, raw material analysis), positively impacting operating costs and, therefore, the costs of your entire chain.
At Europartners Group, we design and develop air freight solutions tailored to your supply chain. We focus on your operations’ main needs and characteristics, contributing to the optimization of the resources of your entire company.
Why should you choose Europartners Group air freight services to help you reduce operating costs?
With 20 years of experience in the global logistics market, we specialize in time-sensitive air freight and time critical cargo solutions.
Besides multimodal alternatives, we offer comprehensive logistics consulting services and professionals dedicated to your company, with key account managers and in-house solutions.
We also have air freight consolidation services from different parts of the world to guarantee you the space you need to transport your goods on time.
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