Logistics plan: what is it and what is it for?

One of the essential elements in any company is the logistics plan, which will be the strategy that will analyze and manage all the activities and processes that will allow to get from the raw material to the delivery of the product or goods to the customers.

What is a logistics plan?

A logistics plan is the strategy that a company follows to analyze and manage the logistics activities that take place in its business activity. It is determined by different phases, as well as by elements specific to each type of company and type of product, but, in general, all logistics plans seek to respond efficiently to logistics needs, reducing the costs of time and resources used in their execution.

How important is it?

The importance of the logistics plan is vital, since it is the strategy that will determine how things have to be done in this specific aspect of the company. Having a logistics plan makes it possible to follow a standardized protocol in the execution of logistics activities, which avoids improvisation and, consequently, the increase, or even loss, of business resources in the execution of logistics operations.

Main advantages

Improved productivity: First of all, it should be noted that having a logistics plan will have a positive impact on the company, improving its production capacity. By having a specific logistics strategy, all related activities are carried out more efficiently, which has a direct impact on increased production.

Reducing inventories: Another of the advantages of having a logistics plan is that it reduces inventories. This is achieved by having a better knowledge of the expected demand for the products manufactured. Consequently, production can be adapted to this demand, which reduces the use of resources needed for products that may not have a future outlook.

Develops information systems: Having a logistics plan also produces a large amount of information derived from the control and analysis of logistics operations. This information can be applied to develop a continuous improvement in all processes, which increases the efficiency of the company.

Coordinates all logistics activities: In addition, having a logistics plan allows coordinating all logistics activities from a single point of view and control, which improves their efficiency and operation as a whole.

Improves the company's profitability: Thus, having a logistics plan improves the profitability of the company as a whole, since the company's logistics activity is executed in the most efficient way possible and, consequently, this increases the overall profits of the business activity.

How to draw up a logistics plan?

The specific characteristics of each company and product must be taken into account when drawing up a logistics plan. However, in all cases, these plans are usually executed in three specific, well-defined and differentiated phases:

Procurement: In this first phase of the logistics plan, the company must manage all activities related to the procurement of raw materials needed for the development or manufacture of its products. This procurement should be in accordance with the demand for its products, which will avoid excess stock of raw materials.

Production: The production phase of a logistics plan involves all activities related to the production of the product, which also includes less visible but equally important internal logistics operations to ensure the supply chain throughout the process.

Distribution: The last phase of the logistics plan refers to distribution, and encompasses all activities related to the physical distribution of the final product, whether it is to be shipped directly to the end customer or to retail outlets that handle its sale.