Everything You Need to Know About Manufacturing Logistics

Manufacturing is an integral part of the industrial world. But while this fact is widely accepted, the ins and outs of manufacturing aren’t nearly as widely well-known — nor widely understood.

What are manufacturing logistics exactly? And why are they so important? Here’s everything you need to know about the basics of manufacturing logistics.

What is “Manufacturing Logistics?

The term refers to any process involved in the creation and/or storage of manufactured goods — and there are a lot of them. Everything from transporting raw materials to production lines at the start of the manufacturing process to delivering the final product to customers can be considered part of the manufacturing supply chain.

Careful inventory maintenance and extensive strategic planning are also part of the equation; peak operational efficiency within the manufacturing supply chain leads to higher levels of production and fewer costly delays, which in turn improves customer satisfaction.

The Three-Pronged Approach to Managing Manufacturing Logistics

Efficiently manufacturing any product is a complex endeavor. To keep all the moving parts straight and make this monumental task more palatable, the many (many) logistical processes involved can be filtered into one of three categories:

1. Materials: Everything that happens prior to raw materials being delivered to the production line.
2. Production: Physical product creation and storage.
3. Distribution: Any process involved in preparing and shipping a product to its final destination.

Each phase contains its own KPIs and performance metrics to monitor efficiency and highlight potential areas for improvement. The distribution phase, for example, might see companies track total transportation costs, order picking accuracy or the average number of days late for orders.

How 3PLs Can Solve the Biggest Challenges in Manufacturing

Supply chain challenges have a way of appearing unique to your specific business, but some obstacles that are more common than you might think. Here are the three most frequent issues our manufacturing partners face today:

1. Rising Transportation Costs. Fuel costs, global disruptions, inclement weather and other variables have conspired to make transport one of the top logistical challenges in manufacturing today. There are two major ways companies can help drive down transportation costs: increasing visibility and enlisting the help of a 3PL.

The first requires investment in the proper tools and technology to provide real-time tracking and alert notifications. Shipment visibility allows company transportation managers to view shipments at a glance and pivot quickly to alternative plans when drivers encounter unexpected delays. It also increases driver accountability by verifying which routes were taken and when deliveries were made. This data helps your business ditch unreliable carriers and minimize shipping times with optimal routes.

The second involves outsourcing the entire transportation responsibility to a reliable 3PL, saving money on multiple fronts. 3PL partners are already equipped with all the tracking tech, carrier contacts and shipping assets needed to move freight — some (including First Call) even offer in-house warehousing services. Turning your logistics over to a 3PL also means saving on payroll for carriers and workers’ compensation insurance, as these costs would be covered by the 3PL.

2. Regulations and Compliance. Every state has specific regulations that must be followed when producing and shipping goods. If you’re shipping internationally, the bureaucratic hoops involved in getting products through customs can be even more of a nightmare. Failing to have all compliance paperwork in order before your shipment can create significant delays and result in unnecessary fines or fees.

The best way to manage this obstacle is to maintain familiarity with local laws in each area you ship to. Large international companies are able to do this by designating shipping managers for specific areas, but most other companies choose to solve their compliance issues by utilizing a 3PL. A 3PL’s entire job revolves around knowing the requirements for local law enforcement and ensuring compliance issues are mitigated before they can cause disruptions.

3. Maintaining Inventory. Inventory is one of the most difficult parts of the job. Customer demand fluctuates, production schedules change and material shortages always seem to crop up at the most inconvenient times. With so many factors affecting how much inventory is needed at any given time, logistics managers have to carefully study consumer habits and review industry forecasts to project upcoming demand and shortages.

Fortunately, 3PL servicers don’t just handle shipping; they also can assist with storing finished products and raw materials in strategically located warehouses so you don’t use up valuable space at the factory. They’re also the perfect partner to help implement an effective inventory management system and provide real-time visibility into your current inventory levels, which will help you avoid stockouts and reduce losses from excess inventory.

First Call Is Here to Help

These are just three of the many logistical challenges manufacturers face each day — the sheer number of moving parts involved in logistics management can appear overwhelming at times, which is why it pays to outsource where you can.

with the shipment and storage of goods and materials, so you have more time to focus on improving factory productivity and material sourcing. If you’re ready to take your manufacturing logistics to the next level, contact us today!