what is production logistics?

Production logistics characterises the phase between procurement logistics and sales logistics and aims to achieve the best possible combination between the flow of information, material and value during the continuous enhancement of production. Simplification, improvement, and savings are all to be achieved in production.

Production logistics is about ensuring each station in a production line has all the materials and any other resources it needs when it needs them, to create products. Quite simply, it’s the flow of materials inside a business or factory. 

The planning, control, and employment of the transportation and storage of raw materials, operating materials, auxiliary materials, spare parts, purchased parts, finished products, semi-finished products and related supporting activities within the production process are all part of production logistics. Any production processes should receive the right quality and quantity of production factors, and should also be coordinated spatially and time-wise.

When distinguishing between logistics types, it’s necessary to make an initial separation between internal logistics, such as procurement and storage, which is known as ‘intralogistics’, and external logistics, which involves transportation and order delivery, etc. From there, it’s then necessary to recognise that there are several basic types of logistics in the supply chain: procurement, manufacturing, distribution, and everything that relates to the after-sale. Below is a quick look at them:

Procurement logistics

Procurement logistics is all about managing the supply necessary for manufacturing and selling finishing products, semi-finished products, and raw materials. Companies have three main ways of managing their procurement logistics:

• Just in time: the business receives the materials when they’re necessary to complete production and not before, which removes the need to store them.
• Synced with production: Supply planning is performed with a view to anticipating manufacturing needs. You know in advance how much merchandise you’ll receive and whether you’ll be storing it temporarily.
• Safety stock: This approach consists of storing more than you need in case of any unforeseen circumstances, such as a change in demand or a supplier delay.

Ensuring efficient procurement logistics requires you to consider several different variables. These are namely:

• the selection of suppliers;
• the exact amount of stock you order;
• frequency of procurement;
• your inventory management model;
• and the load unit(s) you use to store, handle and transport the products.

Manufacturing logistics

Manufacturing logistics optimise the processes that take place from the purchase of the raw materials through to the creation of the final product. The main goal of this type of logistics is to reduce manufacturing lead times, the time from when an order for production is generated through to the completion of production of the order.

The two most common strategies are:

• Make to stock: The manufacturer produces the goods ahead of time and they’re then stored in the warehouse. The sales department only sells the goods available.
• Make to order: the manufacturer produces the order when they receive it from the customer.

Distribution logistics

Distribution logistics, also known as transport logistics, is all about ensuring goods reach the customer quickly and efficiently. A product can be attractive, functional, and affordable, but the customer must be able to receive it on time, in the right quantity, and in good condition. Otherwise, there’s little point in the product.

Distribution logistics comes into the picture after the manufacture of the product and covers transportation, storage of the product, order preparation, and delivery to the customer.

There are two main approaches to distribution logistics:

• Direct: the manufacturer is responsible for distributing the product to the final consumer.
• Indirect: instead of to end customers, the manufacturer sends the goods to wholesalers or retailers, who then sell them to consumers.

Reverse logistics

Reverse logistics covers the set of practices connected with managing product returns and refunds. You can classify reverse logistics into:

• Returns logistics: This type of logistics deals with items that are sent back to distribution centres. It’s the most common type of reverse logistics and has grown because of e-commerce.
• Waste logistics: This type of logistics addresses the recycling, treatment, and recovery of waste to take advantage of it or eliminate it to stop any damage to the environment.

The activities involved in reverse logistics are, in essence, the same as in other logistics operations; however, the operator must plan them properly so they don’t interfere with other warehouse operations.

Production logistics performs an important role within modern supply chain management, serving as the bridge between supply chain management and production management. As a result, production logistics plays a vital part in the creation of value.

One thing a manufacturer must avoid is production logistics becoming siloed, which could trigger a disconnect between sourcing and production if it does occur. Production managers might know where the materials need to be, but they must share this information with the teams in charge of the production plan and sourcing. If they don’t, production could slow down or experience disruptions.

You’ll have enough inventory to guarantee a smooth workflow, even if supply and demand in the market suddenly change, and won’t have to order raw materials immediately, which would be more expensive.

When it comes to inventory control, there are several practices you could implement for a more effective inventory control system:

• Create an organised floor plan: You should organise your warehouse in a way that makes sense. The room should have correct signage and labels, and you should place the most popular items close to the shipping area for maximum productivity. As supply and demand change over time, modify your floor plan.
• Use clear labels and signage: Good labelling allows quick, more efficient fulfilment. You should have clear, concise labels on all racks, bins, and products. Inventory tags, barcodes, scanners, and RFID systems are all tools you can also use for easier inventory control.
• Apply cycle counting: Cycle counting entails counting items in small sections over specific cycles. Counting everything at once is time-consuming, whereas cycle counting makes it possible to keep your inventory control effective and identify inaccuracies quickly.
• Implement a warehouse management system: WMSs and inventory control systems allow you to track items efficiently and reduce potential human error. Barcode scanners, tags, apps, and other items provide you with easily accessible real-time tracking in these systems.

Packaging costs affect nearly every aspect of the supply chain, from the start of the production cycle, through to the handling and distribution phases. Good packaging design will help you to reduce the total cost of your logistics. Additionally, you’ll save money on related unnecessary expenses such as labour, transportation, lost sales, damaged inventory, and more.

As well as being functional, packaging should display intelligent design, be strategically designed, and be tailored to the needs of the customer:

• All products have their own characteristics, and the design of the packaging should take these into consideration. A customised packaging design is a way to do this and accommodate these features.
• Customised packaging will allow the business to fit more products into each container, shipment or truck, which will save them money.
• If you’ve optimised your packaging well, the packaging will facilitate safe, easy packing and loading.
• Packaging should be able to withstand the stresses of transportation and stop leaking or damage. These incidents can cost you time and money, and you’ll have to replace the damaged goods, which means engaging in a redundant process.
• The more space you save, the more you can save on overheads, and the faster employees can store the packaged products and access them when they need to.

Packaging performs many functions in the supply chain:

• Protective: The packaging must protect the goods from external factors and allow them to survive handling during transportation.
• Storage: The packaging should allow convenient storage at the same time as meeting storage requirements, since several different places may store a product before it reaches its final destination.
• Transport: Decent packaging makes easy handling, stowing and stacking possible during transportation, and it does so in a way that makes the most efficient use of the space available.
• Tertiary function: This relates more to the additional protective carrier that protects the first and second layers of packaging. This packaging performs an organisational function and groups individual products into one box. Since customers expect businesses to show consideration for the environment, it’s better to use environment-friendly packaging for this additional packaging.

Here are some tips to get more out of your packaging design:

Avoid redundancy in your packaging

Request the exact packaging needed for your production orders. To cover errors in production and keep waste to a minimum, you should only have a small percentage over the margins.

Source the correct raw materials

How you source your materials will depend on the product. Understanding in-depth every step of the workflow and identifying the necessary materials for packing can spare delays in production.

Optimise production and printing

Optimised packaging is important for the production and printing process. You should display barcodes, instructions, hazard cautions, identification and other relevant information clearly so it’s easy to see. Be sure to finalise the packaging design and confirm the packaging will contain all the necessary information. This is to avoid any last-minute changes that could have an unhelpful impact on the production or printing processes.

Manage transportation costs effectively

Transportation costs cover from manufacturer to distributors and activities involved in handling and storage. A more efficient packaging formation can lower your handling, storage and transportation costs, whether this is by land, air or sea.

Control packaging stock

You don’t want your operations to come to a stop just because you haven’t got enough packaging in stock; however, at the same time, and just like managing stored stock, you don’t want your packaging to take up too much space in your warehouse. When choosing your packaging provider, check they have short lead times and supply materials quickly.

Automating your packaging process

Material strength and quality aren’t the only aspects that make a difference. It’s much quicker to put together self-assembly boxes, for instance, than traditional boxes, and not only that but they also save tape. This goes, too, for self-closing boxes, and for boxes and packages prepared for returns. All of them make life easier for customers and, in reverse logistics, for you.

When it comes to automating your packaging process, you have a couple of useful options:

• Pallet stretch wrappers: These relieve operators of pallet assembly because they automate it, and they also save a lot of time. Often, they work together with pallet strapping machines and identification systems, which read codes automatically and transmit the information to the WMS.
• Filling machines: These machines place filler into the empty spaces in packages automatically. A filling machine can crumple up the brown paper, inflate air bags or create foam moulds to soak up impacts during transportation.

Creating ergonomic pick stations and order preparation

The prevention of occupational hazards is an aspect of the process that can influence productivity. Tired workers can make more mistakes and spend longer on tasks than necessary. Additionally, order conditioning can cause musculoskeletal disorders, due to the repetitive motions workers perform while standing for long periods of time. Equipping pick stations with anti-fatigue mats and regulating the height of work surfaces are two simple measures you can take.

Manage order operation with a WMS

The way in which you organise tasks for order preparation can affect the handling of your packaging materials. Using a WMS can help you to:

• order and sequence conditioning tasks;
• guide you in choosing the right size packaging for each parcel;
• help you to verify and identify orders.

The focus of production management is on achieving a smooth production process that includes efficient planning and control of business operations. Its function is to achieve the right balance:

• right quality;
• right quantity;
• right time;
• right cost.

The ultimate aim is to optimise your manufacturing with your current capacity. This means deciding on the best process for the business, which could be:

• repetitive manufacturing: a round-the-clock production that manufacturing process automation such as robotics and conveyors belts make possible;
• discrete manufacturing: a production line that manufacturers various products and must be set up and adapted to suit the product;
• job shop manufacturing: a more lowkey process in which the manufacturer creates bespoke products in workstations and production areas;
• batch manufacturing: a process in which the manufacturer produces a product in the necessary amount to meet the customer’s demands;
• continuous production: a round-the-clock production process, but one which tends to deal with raw materials such as gas, liquids and slurry.

Here are the functions of production management in more detail:

• Production control: In this process, you monitor the process to confirm everyone is executing the correct plans in the manufacturing process. This is to make sure everything is running smoothly and to react quickly if production deviates from the plan.
• Production scheduling: This is a critical part of production management and involves scheduling when production will start and finish.
• Cost and quality control: This aspect of production management is all about producing the highest quality product at the lowest possible cost. Not only saving money for the business is important here, but pricing the product more fairly for your customers is as well.
• Machine maintenance: You don’t want all your tools and machinery to break down or underperform and bring production to a halt, so you’ll have to keep this equipment in good condition.

The importance of production management

Production management is essential. If you don’t manage production well, the business could struggle to produce orders and you could lose customers. Understanding the importance of production management empowers you to:

• Accomplish business objectives: Analysing your production and operations will allow you to meet business aims by producing goods and services efficiently that meet the requirements of your customers.
• Bolster your brand image: You’ll be able to build a reputation as a company that manufactures quality products and offers them at fair prices.
• Reduce your manufacturing costs: If you optimise your manufacturing output, either by not having resources hanging idly around or by working out the best way to manage your inventory, you’ll be able to reduce your manufacturing costs.
• Become more competitive: the certainty that the right products will be delivered at the right time and in the right quantity will make the company competitive in all the relevant markets.
• Optimise resources: Good production management will optimise labour, equipment and resources during production. This can reduce waste levels and create a positive, well-balanced working environment for employees. Work/life balance and green initiatives have become important aspects of business life, and a production management process that optimises the use of resources can deliver on both of these.

Operations management is similar to production management but addresses the day-to-day running of the business. The purpose of operations management is to ensure business operations and production run smoothly and efficiently within the business. Operations management includes addressing administration, factory-level and service management.

Operations management focuses on the customer. Satisfied customers are a sign that things are going well. Despite the customer focus, handling resources also falls into the domain of the operations manager. The business wants to keep the customer happy but wants to do so with the least wastage possible and make the most of its resources.

Operations management carries out several main functions:

• Product strategy: From raw inventory management to routing manufacturing, in operations management, you must develop plans and tactics that allow you to achieve a lean inventory and smooth flow. This is to gain a competitive edge over other businesses offering the same product(s) in your industry.
• Product design: This is where you investigate whether your product meets the needs of customers and is following the market trend. Even though your product caters to their requirements, people’s needs and wants change. You must be able to adapt your product or service in line with the trends and predictions.
• Forecasting: Demand planning enables you to understand how your product is performing in the marketplace. Then you can decide your next steps. That might be to increase production, decrease production or even halt production altogether.

Ultimately, the main difference between production management and operations management is that the former is all about monitoring and managing product manufacture, whereas operations management concentrates on the services on offer to the customer and on the work, the business must do to finish the product.

We’ve produced a variety of solutions to help businesses transfer materials and other loads safely and efficiently from the loading bays of their premises to their truck trailers, and vice versa. We’ve also produced a solution to help you shift goods more easily around your warehouse. Depending on your budget and your requirements, you may prefer a manual solution or choose a more expensive but also even more efficient automated option.

Our manual loading solutions require a little work from employees, but they’re safe and highly efficient. They’re easy to install and will help your employees deal with heavy loads much more comfortably. We offer the skate and track, the built-in rollerbed and the modular rollerbed, the latter also coming in a specially tailored option for warehouses.

Our automated loading solutions make life even easier. They require the mere push of a button to get things moving in or out of the trailer.