Definition
Logistic Management is defined as a Supply Chain component that is structurally designed to meet the requirement of an organization, or its customers/clients. This is achieved through the control, planning, and implementation of goods or services through warehousing and the movement of such goods or services from a source of origin to a destination. Logistic Management is aimed at reducing the expenses of companies as they go about delivering utility to their customers.
In the construction industry, logistics management involves the accumulation and allocation of raw materials and labor. By adhering to industry best practices, project managers can design and facilitate a management process that works best for them.
Elements of Logistic Management
There are some elements of logistic management that project managers need to pay attention to when mapping out a strategy. Managers need to
- Choose a reliable transporter with the wherewithal to provide transport facilities locally or remotely
- Pick the best transport route and navigate risky terrain
- Identify the most efficient delivery method
- Utilize software and hardware, where necessary to handle certain processes
Functions of Logistic Management
Now, let us look at the various functions of logistic management that project managers deal with regularly.
- Order Processing
The very first phase or function of the management process is to order inventory from a supplier or manufacturer. The procurement department of the company places orders for construction materials like poles, wire, special equipment, and any other material necessary.
- Materials handling
The next function is the movement of ordered materials from the supplier’s warehouse to either the lay-down yard or directly to the project site at a scheduled time. This has to be done in the most efficient way possible so as to protect the materials from damage.
- Warehousing
This function is only undertaken if the construction company operates a warehouse or lay-down yard that is used to store materials. Some companies prefer to take materials to the project site to reduce storage costs.
- Inventory Control
Smart inventory control is important because it prevents companies from placing and paying for materials that they do not need. Inventory control is one way to reduce the financial outlay on projects and to maximize profit or working capital.
- Transportation
Transportation is another very important function in logistic management. How the company transports labor, equipment, and supplies are fundamental. Transportation costs money, which is why the process must be properly planned to keep costs under control.
- Packaging
Under logistics management, the packaging is of two types. The first type is the packaging of products to make them safe and ready to use. The second one is the packaging of products for onward transportation to a final destination. In the construction business, firms engage in the latter. This is true, especially when the items to be transported are hazardous and pose certain levels of risks to humans or the environment.
The logistics management process differs from one company to the next, but the goal is essentially the same for all construction companies. To minimize the cost and risk of procuring and transporting materials from one point to the next in the most efficient way possible.
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