REICHHART LogTalk: Distribution logistics | The last mile – key factor within the supply chain
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Project Manager Planning and Service Development Transport Logistics
In logistics, the last mile of the supply chain is a decisive factor. This is the point at which goods reach the retailer or the end consumer directly. Often dismissed as a matter of course, behind it lies a logistical tour de force. Interview with Timo Kirchner, Project Manager for Planning and Service Development of Transport Logistics at REICHHART Logistik.
What developments have shaped distribution logistics in recent years and how are you reacting to them as a logistics provider?
The development of online trade in particular is taking on a central role in distribution logistics, and not only as a result of the global Corona pandemic. According to a recent statistic*, the turnover in B2C e-commerce in Germany amounted to 59.2 billion euros in 2019, which corresponds to a growth of 279% in the last 10 years. This has a logical consequence for logistics providers like us. Efficient and intelligent logistics solutions are needed and must be adapted to the current requirements of the market. A paradigm shift is currently taking place in distribution logistics, which is largely influenced by market changes: the supply chain design is evolving from just-in-time solutions to a demand-driven approach. While both deal with the delivery and provision of goods in line with demand, the processes are initiated differently. Warehousing is a key factor here.
Why is it more important than ever to optimise the last mile?
As a logistics service provider, we always act in the interest of the customer and identify individual ways of optimising processes along the entire value chain. As already mentioned, requirements change over time and we have to react to them flexibly. What on the other hand remains equally important is the need to reduce costs and create a competitive advantage. This can be achieved through efficient and sustainable distribution. As a logistics provider, we are the link between production and the market. Our core task consists in planning and controlling the necessary processes and workflows. This requires above all a solution-oriented approach and economic thinking and action. There are many ways to design the last mile – the art lies in finding the appropriate approach in each case. For instance, we use synergies to fully exploit routes with several consignments from different customers or find solutions to existing infrastructural deficits. This is done, for example, by examining several of our client's locations in order to identify weak points and optimise logistical processes accordingly. This allows us, for example, to coordinate stock levels and deliveries while generating a win-win situation for the customer. Taking a look at current legal framework conditions and statutory regulations is, of course, also part of the process. A holistic perspective contributes to making the "last mile" economical for all parties involved.
Does distribution logistics only refer to the transport business?
Absolutely not. In distribution logistics, transport logistics, contract logistics and digital logistics go hand in hand. Cost savings in particular often require optimisation along the entire supply chain. For example, by taking the last mile into account when determining the location of the warehouse in order to map an effective delivery. Another decisive factor is the exact planning of interlocking processes, for example, by taking into account shortened delivery times. Data transfer between contract and distribution logistics plays an essential role here. Only then can it be ensured that the location of the consignments, also for the end customer, is guaranteed by means of scanning.
The last mile is a challenge for many companies. What influence does digitalisation currently have in this area?
Digitalisation has long become an integral part of logistics. In recent years, the traceability of goods has become increasingly important. Clients want real-time tracking. Whether in the B2B or B2C sector, customers want to know where their consignment is at all times. Ideally in real time. Cloud and tracking solutions using IoT connectivity are therefore in demand because they reflect the flow of goods more accurately and transparently than the QR codes and RFID tags used to date. With regard to route planning, route optimisation solutions in real time based on artificial intelligence are an indication that digital technologies are being applied to all areas. Track and trace systems allow to improve the quality of the logistics service in terms of delivery reliability, delivery flexibility, delivery time and delivery quality and generate noticeable added value.
In conclusion: What does sustainability in distribution logistics mean to you?
For me, the topic of sustainability is reflected in different situations. For example, in our consulting expertise as a logistics service provider, where we show different ways of achieving more efficient supply structures and provide a long-term plan for them. Because usually quick solutions with no strategic orientation do not lead to good results, are not sustainable and are also more cost-intensive. Furthermore, we attach great importance to socially sustainable personnel work. This means, for example, that we pay our drivers according to their performance and that their working conditions are socially acceptable. Another aspect of sustainability is future-oriented action. It is important to constantly question our own status quo and to examine new trends and developments, such as alternative drive options in the transport sector from electric mobility to the advancing development of hydrogen technology. After all, we want to continue to shape the logistics of the future.
Find out more about our range of services and how you can efficiently organise the last mile in distribution with REICHHART: REICHHART Distribution Logistics
The interview is available for download here: REICHHART LogTalk No. 3 - Distribution Logistics