by Logistics is the process of planning and executing the efficient transportation and storage of goods from the point of origin to consumption. The goal of logistics management is to meet customer requirements, in a timely, cost-effective manner. In simpler terms, it just means getting the product from manufacture to the customer.
In reality, logistics comes into the forefront when the manufacturer procures essential raw materials for the manufacturing process. It is an integral part of supply chain management. It will impact us one way or the other for the foreseeable future. Likewise in construction, most of the materials needed are transported to the site at different time intervals as per schedules. The delivery delays can cause excessive cost, time, and quality issues in the construction project.
To learn more about logistics we have listed out the type of logistics that are prevalent in the sector.
Inbound logistics
Inbound logistics refers to the procurement and storage of incoming raw materials and spare parts. From all kinds of FMCG companies to the automobile industry, this stage of logistics is present.
Inbound logistics includes all those activities, which are necessary to make the goods available for operational processes, at the time of their requirement. It includes materials handling, transport, stock control, and inspection to facilitate production. This is how Flipkart and Amazon acquire and store goods from various vendors. Construction companies store essential materials as well, material shortage or a pandemic like COVID 19 can always hinder work.
Outbound logistics
Outbound Logistics relates to customer service and distribution channels. That is the outward movement of finished goods, from the company to the end-user. Specifically, warehousing and transportation are important factors here. This is how Flipkart and Amazon deliver various products you ordered online from their warehouse. Outbound logistics in construction is most prevalent when construction companies opt for factory-made products like windows, doors, and kitchen cupboards. Prefab Construction also uses outbound logistics.
Now to explain in detail the delivery of goods and materials to the construction site, and how to use it effectively.
Construction logistics
To keep a construction site productive and successful, good planning is key. A construction project requires good material supplies that are well-coordinated with timetables, staffing plans, and equipment. Most importantly, clarity and structure on how vehicles, material, and people move outside and within the construction site creates a safer and more efficient work environment.
It is important to have a site logistics plan and should include a complete inventory of materials, equipment, labor, and tools needed for each stage of the project. Materials have to reach construction sites at short notice. This can have a huge impact on profitability. At the same time, the company may incur a huge loss when work gets delayed at various sites. Logistics management software like Jiax, Carego, WebXpress, or custom enterprise resource planning software can reduce save time and reduce expenses.
Here we explain the different modes of logistics which can help a construction site do better.
Third party logistics (3pl)
Here, the manufacturer or a company outsources transport and logistic activities to 3pl logistic providers. Third-party logistics provide services like transportation, warehousing, packaging, shipping, customs clearance and freight management services, etc. Times have changed, gone are those days you can only rely on your local retailers. Just like how you buy a product from various online platforms, now you can buy construction-related materials online and this enables you to buy better quality products at a better price. Companies like IKEA which recently came to the Indian market are going to be the game-changers.
Now products from across the country are available on a single platform without any additional cost. 3pl logistic providers enable us to get Various products and materials of better quality at a feasible cost. Thus, freight forwarding companies, and various Transport and courier companies like FedEx, DHL, Track on, Delhivery will be the core of construction Logistics.
Fourth party logistics (4PL)
A fourth-party logistics provider is an independent, singularly accountable, non-asset-based integrator. They will assemble the resources, capabilities, and technology of its own organization to design, build, and run comprehensive supply chain solutions for clients. 4pl logistics offers strategic business insights and consultative services in addition to logistics execution. A company can outsource the entire logistics management segment of business to a 4pl logistics provider.
Generally, 4pl logistics provider manages entire functions in the supply chain like procurement, storage, distribution, processes whereas 3pl mostly concentrates only on a single function. You can say 4pl logistics is an upgraded version of 3pl logistics. The world is in the midst of a change from 3pl to 4pl logistics, as this model is relatively a new concept and very capital intensive the change is not as swift as everyone expected it to be but it will reshape the world we live in.
Reverse logistics
Reverse logistics refers to the practices and processes set up for organizing product returns from points-of-sales to the manufacturer in order to repair, recycle, or dispose of these articles in the most cost-effective way. Returns on Amazon and Flipkart can be seen as an example.
3pl and 4pl logistics providers facilitate reverse logistics for construction materials and this provides confidence and safety for customers.
Conclusion
Overall it is safe to say that logistics management will play a key role in the efficiency and successful completion of all construction projects. Like many developed countries, India is on the verge of utilizing logistics to its true potential. It is expected to be one of the largest growing sectors for the next 5 to 10years in the country and this will simplify and create a level of efficiency that is currently lacking in the construction industry.