What is Integrated Logistics?

May 25 , 2022 | CATEGORY : SERVICES

Integrated logistics is increasingly seen as the backbone of businesses as it shores up operations from supply chain management and procurement to customer fulfillment, information flow, and returns. An integrated logistics system caters to customer demands, acquires information, stores, and dispatches goods, and coordinates delivery all confining to an intricate mesh of interconnected processes. With an integrated logistics approach, companies have a seamless set of processes across various internal departments. This aligns resources, increases transparency, and enables collaboration motivated toward customer satisfaction.

The global logistics market is growing significantly. According to Market Research Future, it is projected to witness significant gains by 2030, growing at a 7.25% CAGR between 2022 and 2030. Numerous factors have contributed to its growth, including the pandemic-induced boom in e-commerce.

In 2021, retail e-commerce sales amounted to approximately 4.9 trillion U.S. dollars worldwide. This figure is forecast to grow by 50% over the next four years till 2025, according to Statista. As shoppers and retailers transcend geographical barriers by embracing the digital route, they rely on robust and resilient logistics. Businesses are looking at integrated logistics to provide them the resilience and flexibility to navigate through a dynamically shifting supply chain.

Integrated logistics and competitive advantage

Companies that adopt integrated logistics systems aim to raise the bar in terms of resource utilization, operational efficiencies, cost savings, and customer experience. Retailers, who now face intense competition, want to gain the elusive advantage by quickly converting market opportunities into viable business avenues. Integrated logistics helps businesses by aligning all departments, processes, and resources in a cohesive manner and strengthening their communication channels. This, in turn, accelerates dispatch and delivery, the two foundational aspects of logistical operations.

  • Advantages of integrated logistics
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  • Higher collaboration and visibility
  • While every business aims to achieve a reduction in costs, better operational control, and streamlined processes with optimum utilization of resources, this remains a distant dream for many. Integrated logistics offers a centralized solution to establish more collaborative and interconnected working across all logistics functions and departments. Businesses can gain higher visibility and implement strategies for smooth and cohesive logistics processes.
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  • Increasing profitability
  • Higher visibility gives leaders and teams a broader view of overall operations, allowing them to use resources in the best possible ways and derive insights that can be used to explore new market opportunities. Having optimized the resources by removing overlaps, streamlining manpower, and implementing systems, companies can free up funds for growth and expansion strategies. 
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  •  Enhancing flexibility
  • The events of the past two years have driven home the importance of flexibility and agility for businesses. Businesses using integrated logistics stand to gain an important competitive advantage to navigate through market fluctuations and supply chain disruptions with higher levels of efficiency and assured safeguards against risk and a volatile market environment. A closer view at every point whether customer demand, sourcing, storage, dispatch, and delivery allows the business to take fast decisions and execute them. For example, they may scale up or down the supply based on the current market situation instead of spending money on storage. They may also re-route supply to a new market that is a rise in demand.

 

  • Efficiently managing operational costs
  • Ensuring consistent quality of service and customer experiences are high priorities for companies to keep their competitive edge. However, operational costs need to be under control for the business to remain viable. Integrated logistics can help streamline operations from end-to-end, by identifying and addressing infrastructure or process-related flaws and inefficiencies, while keeping costs to reasonable levels, whether in transporting, sourcing, procuring materials, or any other function of logistics.
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  • Reducing wastage
  • Losses incurred through wastage can prove costly for the company. Integrated logistics can address wastage by predicting customer needs and changing business cycles. Businesses using an integrated logistics solution will be able to conduct a systematic and planned purchase of raw materials, ensuring production schedules are met while building a more accurate calculation of delivery schedules. This is a huge boon as it helps reduce wastage, besides balancing and maintaining inventory at optimal levels.

 

  • Accessing relevant information
  • With more customer touchpoints going the digital route, there is an ocean of data that gets generated. Integrated logistics enables easy access to relevant data that provides insights into customer behavioral patterns and preferences, gaps in processes as well as changes in demand along the supply chain. Being informed helps businesses plan for all contingencies, deliver on time, and navigate changes with agility and flexibility.

 

  • Roads ahead with integrated logistics
  • Amid rising globalization and digitalization demands, businesses need the right logistics infrastructure to support their growth whilst mitigating their pain points. Integrated logistics providers offer businesses a wide array of services enabled by advanced technology solutions. Companies can manage supply chain operations in a centralized, streamlined, coordinated manner that stabilizes heavily interlinked nodes of operation while allowing them to tap into new market opportunities in a highly competitive world. 

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