Logistics plays a significant role in ensuring a business runs seamlessly. Through streamlined logistics, a business will achieve its set goals. Besides, top-notch customer experience and general customer satisfaction can be achieved through proper logistics system management. But then, what is logistics system management? What are the key features of solid logistics system management? How do you build such a system to streamline business processes? These are among the many insights you’ll get from this blog. Keep reading.

What is a logistic management system?

Logistic management is a process in supply chain processing that facilitates planning, managing, storing, packaging, moving, and distributing products in a company. The process is a two-way operation that includes forward and backward operations.

The forward processes include receiving & processing orders, checking orders & setting the inventory, picking & packing products, dispatching the products, and finally, choosing a suitable transportation route to facilitate faster delivery of the products to customers.

The backward process, on the other hand, revolves around handling returned products or failed shipments, fixing things, and finally recycling or reusing the products.

Managing these processes manually can be complex, exhausting, and prone to a lot of errors. That is why it is crucial for businesses to set up a logistic management system to help streamline all these processes, whether for forward operations or backward operations.

A logistic management system is a collection of software tools and resources used to optimize and automate warehousing, stock management, fleet management, and product delivery to respective customers.

Key features of a logistic system management

For a logistic management system to be fully effective and reliable, it requires the following features and functionalities to enhance its purpose.

• Inventory management

This feature in a logistic management system is meant to track and monitor stock and the processes involved. It tracks and manages information about the movement of products, inventory levels, and valuable insights to help the teams make informed decisions.

The inventory management team, through the inventory management feature in a logistic management system, can determine the appropriate timelines to add more goods and products, the quantity to order, and the appropriate storage place.

• Supply chain management

A streamlined supply chain management procedure enhances the success of any business. In logistics, there is a need to coordinate and integrate several parties to complete the supply chain. For instance, there are suppliers, manufacturers, distributors, and finally, retailers. All these teams need to collaborate seamlessly to complete the supply chain process, hence the need for a supply chain management feature in a logistic management system.

Among the key elements to consider under supply chain management are streamlined communication and collaboration, which enhance transparency. With this in place, the business will be able to facilitate the right product delivery to the right customer at the right timeline, thus ensuring customer satisfaction.

• Warehouse management

Many activities take place in warehouse management. The process revolves around planning, controlling, maintaining, and automating all warehouse activities. Therefore, the warehouse management feature in a logistics management system is a collection of tools and processes that facilitate product management right from arrival to storage to tracking, and finally dispatching them accordingly.

• Transportation planning

A logistic management system cannot be complete without the transportation planning feature. The process is all about selecting a suitable means of transport, considering safety measures, and selecting appropriate carriers, bearing in mind factors such as timely delivery of the product and the costs involved.

On matters of transportation decisions, always think of the effectiveness, speed, and environmental impacts besides just costs. As a way of enhancing transportation processes, you can integrate real-time tracking and route optimization technologies to facilitate the entire process.

• Order Management

The order management feature in logistics system management facilitates the processes of processing orders, from receiving the orders to accepting payments and final to completing orders.

The process also simplifies paperwork for the supply process, warehousing, and, finally, shipping of orders. The unique functionality of the order management feature is its ability to detect fraudulent activities which is key in safeguarding business dealings.

What’s more, companies can easily automate the process of receiving and fulfilling orders, all through a single interface.

• Demand Forecasting and Planning

As a company, it is vital to have a feature that can forecast future trends in relation to your business performance and demands. With this feature in the logistic management system, it becomes easy for a company to analyze business trends and make viable decisions in the procurement, production, and distribution departments. The process is all about evaluating customer behaviors, industry trends, and historical data in relation to a specific business. In the end, a company can manage inventory seamlessly, avoid stock outs, and optimize resources such as storage facilities and transportation means.

• Freight management

Freight management features in the logistic management system facilitate the process of managing and tracking the delivery of products. Freight management also handles route optimization, documentation & compliance, and tracking the freight. Above all, the feature provides valuable insights by producing analytical and general data reports concerning best freight management practices.

• Risk management

Logistics is without any doubt, a process involving many risks. For instance, regulatory changes, labor strikes, natural disasters, and transport disruptions are some common risks involved in logistics procedures.

Therefore, it is vital to put in place a strategy to identify such risks and create a strategic plan to overcome and mitigate such risks before they strike.

Some of the best ways to mitigate logistics-related risks include having strong protocols to manage crises, having several means of transportation, maintaining safety measures always, and having different suppliers.

• Reverse logistics

What if the goods that have been already dispatched are returned? The process can be complex and daunting, hence the need to have a streamlined process to complete the returned goods. Reverse logistics is a feature in the logistic management system that manages all the processes of returned goods, including their status. The feature also keeps you updated with the returned goods processes.

• CRM- Customer Relationship Management

This is for 3PL – a third-party logistics service provider. It is a feature that facilitates the process of managing customer details.

With a customer relationship management feature, you can store all the details about a customer’s order, including payment information, product order date, approximate delivery timelines, and product details. Of course, these details are key in managing any concerns in relation to a particular client and their respective orders.

• Integrations

Logistics management systems enhance the overall logistics processes by integrating with other systems that streamline business processes. Examples of these integrations include procurement management software and enterprise resource planning. With such integrations, it becomes easy and seamless to complete all logistics procedures, including sourcing of materials, the buying process, and materials delivery, then from production and finally to distribution of ready products.

• Supply chain visibility

In the logistic management system, you’ll need a feature that connects all the concerned parties, i.e., the customers, suppliers, and carriers, for a seamless working environment. This means you need to include the supply chain visibility feature to complete this requirement.

With this feature, it becomes easy for a business to track all the orders from the start to the end. This helps in estimating accurate delivery timelines and keeping end users informed about the progress of their orders.

What’s more, the supply chain visibility feature in the logistics management system helps businesses minimize lead times, optimize operations, and identify issues, if any, within the supply chain. This fosters customer satisfaction and enhanced productivity.

Why you need a logistic system management: top benefits

So, why, as a business, would you need a logistic management system? How will it benefit you? Let’s find out below.

• Better customer experience

When a customer orders some products, it takes some steps and time until they get their goods delivered. Logistic management system facilitates the processes of packaging, storage, handling, and distribution of products until they reach the end customer successfully and in good shape.

With a solid logistic management system, it becomes easy to automate such processes, which in turn accelerates the delivery timelines, a key element that enhances customer experience.

What’s more, such a system provides valuable insights to a business about customer preferences. The business, in turn, can tailor its services and processes to align with what specific customers prefer.

• Reduced Operational Costs

It can be costly and time-consuming when you handle logistics processes manually. With the many activities involved, such as stock control, warehousing, handling of materials, and storing of products, a good logistic management system automates the processes, thus cutting down on some expenses.

In fact, a well-designed or advanced logistics management system can effectively suggest the best routes to specific locations by evaluating past data to cut down on transportation expenses.

• Improved visibility

A solid logistic management system provides better visibility into the processes and activities involved. This makes it easy for the concerned parties to point out potential issues and find a suitable plan to avoid such issues. This saves good time and resources in supply chain activities.

• Increased efficiency and productivity

Logistics management is a daunting and complicated process which makes it hard to maximize resource utilization and achieve the requirements in a timely manner. However, with a logistic management system, all the processes are streamlined, which enhances business efficiency.

With an automated process, a logistic management system eliminates or reduces potential risks, ensures quality standards are maintained, and ensures no deviations or defects. All these processes enhance business efficiency, which in turn improves overall business productivity.

• Customer satisfaction boost

A proper logistics management system eliminates issues such as missed or late deliveries. This creates a positive customer experience, which creates a good relationship between customers and the business at large. The high level of transparency in the logistics management system between service providers and customers is what makes the business stand out.

How to build a logistics system management

With all the benefits a logistic management system has to offer, you definitely need one for your business. The process is simple, and you can always tailor it to align with your business dealings. However, if you find the process challenging, don’t hesitate to outsource logistic management system development from Aalpha Information Systems. Our experts will ensure you get a logistics management solution tailored to meet all your business requirements.

Nonetheless, when building a logistics management system, follow the steps outlined below:

• State the objectives & scope of the project

Before you figure out any step, now what you want to achieve with your logistics management system. This step is all about highlighting your objectives and the scope of your logistics system solution.

In this step, do the following:

• Think of what the logistic management system is required to deliver, including the features, functionalities, and specific services the system will offer to stakeholders and users.
• Next, think of the tasks such a system is expected to perform. Is it real-time tracking, route planning, inventory management, or order fulfillment process?
• Define the dynamics through which your system will operate. These include regulatory compliance, technology required, resources, and budget.
• Finally, figure out the development timelines, testing procedures, and deployment. Establish reasonable deadlines that will help you achieve business objectives with your logistics management system.

• Structure the platform architecture

Next, figure out the platform architecture’s overall outlook in relation to what you’ve defined in the first step. Don’t forget to factor in the components, structure, and ease of operation. This will ensure you create not only a robust logistics management system but also a system that aligns with your core business objectives. Under this step, do the following:

• Define the logistics management structure as you establish the interaction and relationship between different components within the structure.
• Point out individual components that make up your logistics management systems. These components include transportation planning, warehouse processes, stock control, and order management, among many others.
• Highlight the core tasks and functionalities of your logistics management system. Examples include verifying payments, handling order processing, and facilitating seamless customer communication.
• Select hardware components, including storage devices, servers, and any other physical equipment relevant to the overall functionality of your system. You can then integrate the relevant software components into your structured architecture.
• Create the network infrastructure that facilitates communication between components. Make sure you factor in data security requirements, latency, and bandwidth to enhance seamless operations.

• Implement and test the system

At this point, you have your logistic management system in place. You only need to execute it and test it to complete the process. To do this, implement the below added tasks:

• Make the system live and accessible to users. Perform the deployment process systematically, ensuring you deploy all the functionalities and components successfully.
• Monitor any issues you may notice when implementing the system. Strategize a practical issue-resolution process, if any, to facilitate a streamlined deployment process.
• Next, perform testing to validate the functionality of your logistic management system. The system should perform well and be reliable in relation to the business objectives you highlighted in the first step. While doing testing, include different instances, such as during peak operations, normal, and during failure.

When testing, allow user involvement to collect valuable feedback that will help you improve the system’s functionalities, user interface, and general user experience.

• Regular maintenance and performance optimization

Having a fully functional logistic management system isn’t all. You need to continuously monitor the system and optimize its performance. Under this step, perform the following tasks:

• Track performance metrics with real-time data analytics tools. These activities and processes include monitoring general supply chain visibility, transportation reliability, stock turnover rates, spotting any challenges, and monitoring order fulfillment times.
• Track and evaluate trends in performance to notice issues and strategize how to resolve the issues based on the insights.
• Create a long-term solution to resolve the system’s challenges and issues.
• Determine if there are any opportunities that will enhance the system’s functionality and implement them.
• Keep reviewing the workflows, set processes, and system configurations to enhance its efficiency.
• Perform regular security checks to ensure your system aligns with the set laws and guidelines in a specific industry.
• Perform resource optimization, including human, software, and hardware resources.
• Scale the system accordingly.

Conclusion

A logistic management system creates a simplified platform for businesses to enjoy streamlined processes. The benefits of such a system are vast, with top-notch customer experience and satisfaction topping the list.

So, if you are struggling to implement reliable logistics management procedures in your company, it is a clear indication that you need a logistic management system tailored to meet your business vision.

FAQs on Logistic management system development

How much does it cost to build a logistic management system?

The cost of building a logistic management system varies depending on several factors like the unique project requirements, the complexity of the system, the team handling the project, features and functionalities of your system, among many other factors.

In anycase, the cost of building a logistic management system can range anywhere between $30,000 and $250,000 or even more.

Who should have a logistic management system?

Most businesses with supply chain and logistics processes would benefit a lot from alogistic management system. Ecommerce, manufacturing, distribution, and retail are among the business types that require a logistic management system to streamline their operations. With such a system, such businesses would benefit from inventory management, order management, and proper planning to align with industry requirements.

What is the best stack to use in a logistic management system?

To create a robust logistics management system, you need several technologies, as explained below:

• Programming languages – C++, Python, or JavaScript, among others.
• Database management system – NoSQL or SQL databases.
• Frameworks – Spring or Django, among others.

Ideally, you should choose a tech stack you or your team understands better and a tech stack that will help you accomplish the vision you have in your logistics management system.

Back to You!

Looking to develop a logistics management system for your business? Our software development company, Aalpha Information Systems, is here to help! Contact us today to successfully build a customized solution for your logistics needs.