Is your Internal logistics helping your business grow, or holding it back?

Internal logistics is just as important as customer shipments

Variety is a great thing and can teach you a lot.  Over the last few weeks I have been helping

• a hospital
• an equipment company
• a mine
• a hotel

3 out 4 were concerned with internal logistics.  With all the focus that you see on commercial supply chains the criticality of internal logistics is often forgotten.  If your revenue engine is service delivery and not shipping products then you will not have a commercial oriented supply chain but your internal logistics are no less critical to the success of your business.  Unfortunately the internal support departments of an  organisation can end up being neglected until they start to impact the performance of the business.  Better, I think, to realise that internal logistics feeds and supports the service delivery and helps it to be profitable and grow.

The irony of the neglect is that internal logistics is usually pretty straightforward and (especially if it has been neglected) will not require a massive investment to significantly improve its performance.   A new layout of racking and stock that optimises stock storage and product flow can work wonders.  Small changes to the use of an existing system can work wonders in process efficiency.

If it is time for a major upgrade then you should know that Warehouse Management Systems are not just good for customer facing warehouses but also for internal logistics operations.  The simpler demands of internal logistics mean that simpler and cheaper WMS can be implemented, producing fantastic improvements in inventory accuracy and productivity. This will cut costs and let the front line people concerned with service delivery get on with their jobs, instead of worrying about whether they have the equipment and supplies they need to do the job.  

The big opportunity hiding in most internal logistics operations is that you need to spend a little more effort on the support processes to make big gains on the service delivery side.  Perhaps the classic example of this is in the retail sector where they have long ago realised that sending store display ready  stock to their retail outlets saves ton of money and time (and space) in the back of house retail store.  Clothes are shipped to the store on hangers, priced and ready to hang up; not in cartons requiring hours of sorting and preparation by retail staff before they hit the shelves.

So how could you change your internal logistics to better support your revenue engine?

If warehousing, logistics and supply chain are important to your business or your personal career then why not follow this blog by email or on Google+.  To tap in to the full benefits of business and career boosting ideas I suggest you join The Warehouse Performance Initiative.