Logistics planning: key lessons

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This article was published in the April issue of International Cement Review in 2021.

Logistics planning: key lessons

From dusty roads in remote places, to the bustling streets of Hong Kong, and the highways and byways of Europe, INFORM has been providing logistics planning software to many big and medium-sized players in the cement, ready-mix and aggregates industry. Today, with over 1Mt shipped daily by dispatch teams using INFORM’s algorithms, the company imparts lessons learned through experiences along the way.

by Thomas Bergmans and Dirk Schlemper, INFORM GmbH, Germany

In the mid-1990s, Redlands in France (now LafargeHolcim) was the first to optimise its logistics operations. Today, dispatch teams around the world use INFORM’s algorithms to ship a combined volume of over 1Mt daily. The following is a short list of key lessons that the company and its customers have learned over the last three decades.

Lesson one: the optimised shovel

When working on a small DIY project in the backyard, a shovel is often the perfect tool. In contrast, when looking to exploit a limestone quarry, the tools required will rise in size and complexity. The same applies to digital tools in supply chain management.

When talking to potential customers, usually the very first sentence INFORM hears is: “We need to optimise our supply chain.” However, optimisation is a term used loosely. It affects many aspects along the supply chain and depending on what needs to be achieved, different solutions are available. Some are suited to help a company digitise logistics while others enable a plant to embark on the road to digital transformation. Here are some examples:

  • Using an online platform to assign jobs to hauliers instead of telephone or fax is digitalisation. Connecting that platform to an optimisation tool to automatically select the best haulier for a job based on a multitude of different criteria is digital transformation.
  • Using a mobile app to create an electronic proof of delivery (E-POD) is digitalisation. Using E-POD data in real-time and feeding it into a transport optimisation tool that automatically updates the entire truck delivery schedule and enables immediate customer and haulier billing is digital transformation.

At the outset of vendor discussions, many companies have not defined their goals, ie, they do not know whether they need a shovel or a big yellow machine to “optimise” their supply chain. The fact that logistics is not part of the producer’s core competencies might serve as an excuse here. However, after rounds of discussions and different options and price tags on the table, all too often some producers have picked the shovel although the excavator would rather have met their goals. Or worse, they expected the shovel to deliver the same results as the excavator.

Lesson learned: a good tool improves the way you work. A great tool improves the way you think.

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