Planning and control in logistics management

/ Logistics Management / By

Whether you have a logistics management business or work for an organisation when it comes to logistics you need to understand;

  1. The difference between planning and control
  2. Achieving balance between planning and control
  3. Responding to demand
  4. Loading, sequencing and scheduling

PRACTICAL LOGISTICS MANAGEMENT BUSINESS EXAMPLE

Let’s assume you run a 3PL (third-party logistics) company that handles warehousing and last-mile delivery for a fashion and consumer electronics brands.

The holiday season is approaching (e.g., Christmas or Black Friday), and your clients expect a surge in orders.

How can you apply planning and control techniques to manage this seasonal peak effectively?

Real quick…

Third-party logistics (3PL) are basically companies that fulfill and ship orders on behalf of the businesses that contract them

Common examples could be DHL, FedEx. Uber, bolt etc …its the degree of involvement that matters

Some of these companies don’t just handle transport logistics, they handle all the distributions, ware housing, fulfillment and shipping aspects of online sales

 

 

#1 THE DIFFERENCE BETWEEN PLANNING AND CONTROL IN LOGISTICS MANAGEMENT

What is planning?

Planning refers to the development of the sequence of activities that have to be accomplished over a given time period

In a business planning for a festive season this will mean doing things like;

  • Forecasting demand, for example, based on previous data they could expect a 40% increase on smart phone sales this season
  • Ensuring the warehouse is ready for operations
  • Prebooking carriers such as DHL or FedEX
  • Repositioning stock with high demand closer to last-mile hubs

What is control?

Control activities are the actions undertaken by organisations to bring a plan back on track.

Example of such actions are;

  • Using real time tracking software to monitor delays and reroute shipment
  • Adding more staff to a shift when need be

Practical Example

Assuming last year December Client A (a fashion brand) received 15,000 orders/day, and you are projecting the orders to be 20,000 this year but after promotions the orders are 25,000, in that case control kicks in.

You can enable overtime shifts, pull reserve staff, and prioritize express orders.

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# 2 ACHIEVING BALANCE BETWEEN PLANNING AND CONTROL IN LOGISTICS MANAGEMENT

As we know planning and control are important part of an organisation’s activities

But you can’t plan for every possible scenario. The key is to build flexible plans!

Practically, this could be something like planning to use 3 vans per given route but when volumes surge you can bring in 2 back up vans stored nearby

Operations planning involves deciding on the following;

  • Materials
  • Methods
  • Routing
  • Estimating
  • Scheduling
  • Delivery
  • Customer care

#3 RESPONDING TO DEMAND

Demand is the buyer side of things and it relates to what the buyer wants and is willing to pay for, supply looks at the seller side of things, basically what the seller is able to offer.

In our business example festive demand is volatile since it’s driven by marketing, promotions, and consumer trends.

If you poorly respond to this, we will end up having issues like stockout, delayed delivery or just mismatched orders

You can respond to this by;

  • Real time demand monitoring such setting up automate alerts when daily order volume exceeds threshold
  • Having safety stock by encouraging your client to send 20% more stock than forecast before the sales.

#4 LOADING, SEQUENCING AND SCHEDULING

This part of your planning and control in logistics management is mostly about execution and value addition which means you are answering questions like;

  1. When should a specific task be accomplished?
  2. What quantity should be produced?
  3. In what sequence should the tasks be accomplished?
  4. Are things going as planned?

What exactly will you be doing here especially since during peak season, efficiency in outbound logistics is crucial.

  • Loading: You will be ensuring that you maximize your vans loading capacity and prioritize fragile cargo
  • Sequencing: Pay attention to express and next day delivery by properly planning your delivery routes
  • Scheduling: You allocate early morning deliveries for the time-sensitive deliveries and you also pay attention to things like traffic, distance and delivery windows since these will affect when your deliveries arrive to their destination