It is a key concept of the supply chain. Indeed, it is composed of different flows, physical and informational. Logistics flows thus include all the processes that stagger the life of a product, from its manufacture to its marketing, including its storage, packaging, transport, distribution, etc. In other words, each flow involves a certain number of steps, but also raw materials as well as human and material resources. We invite you to learn more about the different types of flows that can be distinguished in terms of logistics as well as solutions to manage and optimize them.
The Different Logistics Flows
- Internal flows, also known as production flows: concern the circulation of materials in the company’s production and transformation network. This includes operations such as the storage of raw materials, machining, handling, etc.
- External flows: are divided into two categories.
- Supply flows are located upstream of the production chain and concern the movements applied to the materials between their supplier and the warehouse.
- Distributionflows: this time located downstream, these flows concern finished or even semi-finished products, which pass from the warehouse to the end customer.
Logistics flow management strategies
Production methods involve logistical flows of different types, which have specific advantages and disadvantages.
1. Push flows or “push” flows
In pushed flows, production is based on the demand forecast. This so-called “make-to-stock” method, therefore, consists of producing a good before the order, based on orders placed and the market situation. The company, therefore, commits resources without being completely sure of selling its products. Overstocking and the risk of shortages in the event of an unexpected increase in demand are the main disadvantages of this method. It cannot apply to perishable foodstuffs. On the other hand, it helps to strengthen customer satisfaction since delivery times are considerably reduced.
2. Pull flows or “pull” flows
A pull method of production is based on actual demand. Production is launched when the order is effective: it is “pulled” by demand. Thanks to this system, the company avoids overproduction and waste. It also reduces storage costs. On the other hand, delivery times are extended. The “make-to-order” method is generally applied in the food industry. It also allows the company to be responsive to specific requests, product customization for example.
3. Just-in-time or just-in-time flows
When producing just in time, a company relies on very short production and delivery times. Pushed or pulled, production is planned as closely as possible to demand. The main advantage of this method lies in the reduction of stocks and the costs associated with them and in the speed of delivery times. It is based on precise coordination of all the players in the production chain since it requires regular supplies upstream and high transport frequencies. Just-in-time (JIT) production is applied in the industrial sector, particularly in the automotive industry. Amazon Fulfillment centers are also difficult to find https://soonerlogistics.com/amazon-warehousing-and-fulfillment/
With a good CA 3PL, you can comprehend the different logistics flows and go for the one that suits your business best.