Logistics Planning: Important Factors
Planning of logistics synchronizes warehousing, transportation, and inventory between supply chain partners and within the firm. The planning of logistics incorporates vehicle availability, overall movement demand and pertinent movement cost into a general decision support system, which aims at minimizing overall freight operating cost. There are three crucial factors to consider in logistic planning apart from transportation. The factors include resource utilization, simultaneous resource consideration and supply chain visibility. Supply chain visibility is necessary concerning status of supply chain resources and inventory and location.
Apart from enabling the valuation and management of information, visibility also necessitates tracking of resources and supply chain inventory. Supply chain is paramount in that it requires special management to emphasize need for activity and resource planning to either prevent or minimize latent problems. Simultaneous Resource Consideration is very important in planning system because it considers material requirements, capacity, combined supply chain demand and constraints. Materials, transportation capacity, storage and production are the main constraints to meet requirements of the customer, which signify facility and the physical restriction of the processes.
Simultaneous Resource Consideration, which is the second plan in logistics planning put into consideration transportation and storage constraints. To achieve desired supply chain performance, capacity constraints and simultaneous consideration of relevant requirements is necessary since it will help to identify trade-offs in situations where functional costs like storage or manufacturing can lead to lower total system cost. Decisions made on supply chain management and logistics influence greatly many enterprise resources such as inventory, production, transportation equipment and distribution of equipment and facilities. Since resources consume a considerable amount of working asset of a firm, functional management must focus on consumption of resource within its reach of accountability.