Documents in the Logistics Industry
It Is Logistics That Keeps the Economy Moving
Logistics involves adding value to something through geographical repositioning. For example, you move raw materials from the point of origin, say iron ore from the mines, to points where they are needed, say steel mills thousands of miles away (probably in a distant country). Sometimes this value addition might involve nothing more than making the item saleable by making it available at an outlet near you.
It is logistics that makes products, services, energy, information and even people available in the marketplace. If these remain at their points of production, only small quantities might ever be sold.
Logistics in Practice
In practice, logistics in not confined to movement of goods and services. Rather, the logistics manager plans and organizes the management of inventories, purchasing, transport and warehousing. To use a catchphrase, logistics involves making the right things in right quantities available at the right places at right times and right prices.
Let us look at logistics in practice in two important areas - Project Management and regular Business Operations - and the documents typically generated in the process.
Logistics in Project Management
Implementing a manufacturing project typically involves assembling a lot of things at the selected location. Premises have to be constructed by bringing in needed supplies and personnel. Equipment have to be located, compared, procured and transported to site. Utilities like power, water and fuel supplies have to be arranged in time to start operations. Workplaces have to be organized in a manner that aids productive working.
The logistics manager responsible for facilitating the above would typically attend to the following:
- Schedule the requirements for each item. Working with the project manager and his staff, the logistics manager would create a detailed schedule of what is required by when.
- Locate sources for each requirement and negotiate the best possible terms for acceptable quality items.
- Initiate procurement action and arrange for transporting the items from supply sources to project site, again on best possible terms.
- Arrange for inspection of qualities and compliance with agreed prices and other terms before accepting each item.
- Organize warehousing and accounting of the various items received till they are needed.
The following is a list of typical documents used or generated at this stage:
- List of project requirements
- Schedules indicating required dates
- Specifications and cost estimates
- Tender documents where applicable
- Quotations from suppliers and transporters, and comparison statements
- Quality and performance evaluations
- Correspondence with suppliers and transporters
- Purchase order copies
- Inspection and compliance reports
- Supplier and transporter invoices
- Payment documents
- Inventory records and accounts
- Internal transport and external shipment records
- Accounts payable
Logistics During Business Operations
Once operations start, the aim would be to see that each machine and workstation is supplied with needed materials in a manner that helps maintain a high degree of productivity. The products of the business would also require logistical support to ensure that they reach the markets in right quantities at right times. The logistics manager would work in close cooperation with the marketing department to ensure that marketing does not suffer from inefficient deliveries. The new set of documents generated by this function include:
- Notes of discussions with prospective distributors
- Correspondence
- Distribution and transport contracts
- Replenishment requests and shipping documents
- Invoice copies
- Transporter invoices
- Documents evidencing payments from customers
- Documents of payments to transporters
- Accounts receivables and payables
Conclusion
Without logistical support, business operations would remain small, confined to local limits. The variety and scale of business operations we see now would not have been possible.
We look at document management in logistics industry a separate page.