Logistics has been evolving at a high pace together with the industry since the digital era began. The COVID pandemic has demanded a substantial number of changes and advancements in the supply chains and logistics processes. Thus, fresh solutions and methodologies have arisen to solve current challenges.
One of these changes has been the instability of the demand, a reality that has become more acute for the retail sector, where fluctuations were already common. Likewise, online stores have also been forced to offer more flexible logistics to respond to the latest spikes.
Elastic logistics, in this context, is a way in which we can deal with transportation and warehousing issues; gaps in the demand gaps; and the introduction of a new communication channel with customers called omnichannel, which demands competitive prices, free returns, and immediate deliveries; all of these are goals that we can hardly meet without having efficient logistics and an increasingly flexible and well-coordinated supply chain.
Elastic logistics: customized operations
Elastic logistics is a way to manage logistics, completely based on the demands of the market, by scaling a warehouse’s operations and resources so it can adapt to the peaks and valleys of the demand.
The first thing we achieve following this model is to adjust production, avoiding losses, and saving costs. In addition, we can dodge issues related to overstocking and shortages. To do this, we must know the capacity of the warehousing system, and be able to adapt warehousing to orders.
Elastic logistics is a real tool for increasing efficiency since it allows us to address all the orders without increasing costs while satisfying our customers. It offers more advantages, such as:
- Increasing control, traceability, and visibility of products and operations.
- Avoiding cost overruns in warehousing.
- Boosting customer loyalty.
- Adjusting costs to profits.
- Foreseeing shortages and overstocking.
- Managing new orders more efficiently during picking and shipping.
How to make the best of elastic logistics
Companies can follow some recommendations to implement elastic logistics and start benefitting from it:
Implementing a management software
We mentioned earlier that logistics management software, big data, and information and communications technology (ICT) increase productivity by making it easier for us to collect and manage data efficiently. In regard to warehouses, it is essential for their automation, which in turn increases the flexibility of our logistics and ensures the scalability of the set up.
We can use warehousing management systems and big data to predict the optimum stock levels for each location. Furthermore, a warehousing management system is essential to ensure the head of the logistics department has enough information to make the best decisions.
Using just-in-time to lower stock levels
Just-in-Time is a logistics methodology that helps us lower stock levels – and costs – to a bare minimum by buying only the necessary items at the right time and place. It implies great synchronicity from all players along the supply chain.
Preparing the warehouse to be more flexible
A flexible warehouse means having a storage area ready to solve any unforeseen events, with a warehousing system able to deal with peaks in the demand. Using heavy cargo shelves may be helpful because they can withstand up to a ton, or pallet racks, for example.
We can also procure a more elastic logistics by giving it to a third party. This article explains the advantages specifically for warehouses.
Hiring a specialized third-party logistics (3PL) company and giving professionals a complete vision of the inventory will make it easier for you to achieve the flexibility you want in all the logistics processes and, together with the commercial department, it will make it easier for you to analyze and predict future demand scenarios better.
Elastic logistics was born to lower labor and warehousing costs. Companies need only adopt management systems that allow them to synchronize the complete supply chain so they can offer an efficient and fast service.