%201.svg){kind=small}
Latest posts
Download resources
Procurement logistics: definition and important aspects for buyers
.jpeg)
Procurement logistics in a nutshell:
Procurement logistics encompasses all processes for planning, controlling and implementing the physical flow of materials from suppliers to goods receipt at the company. It is essential for purchasing, as it ensures the timely availability of required materials and optimizes logistics costs through efficient process design.
Example: An automotive supplier reduces transportation costs by 23% and lead times from an average of 5 to 2 days by introducing a milk run system in which three trucks pick up just-in-time parts from 8 suppliers on fixed routes every day.
Contents
What is procurement logistics?
Procurement logistics is a central element of supply chain management and deals with the planning, management and control of all material and information flows between supplier management and the company itself. It encompasses all processes from the determination of requirements and ordering to the receipt and storage of goods. The aim of procurement logistics is to provide the necessary materials in the right quantity, at the right time, in the right place and at minimum cost.
Core elements of procurement logistics
Significance for purchasing
In procurement, procurement logistics plays a decisive role in the efficiency and competitiveness of a company. It ensures that materials and goods are provided in a timely and cost-efficient manner, allowing production processes to be optimized and stock levels to be minimized. Effective procurement logistics enables purchasing to avoid supply bottlenecks, increase flexibility and improve customer satisfaction through reliable delivery times.
Procurement logistics: from traditional procurement to digital supply chain management
Building on the theoretical basis of procurement logistics, the immense importance of efficient material supply for a company's success is evident in practice. The procurement of goods and services must be as cost-efficient and timely as possible in order not to interrupt production processes and to secure competitive advantages. In view of global supply chains and increasing market dynamics, traditional procurement is facing considerable challenges, which necessitates a shift towards modern, digitalized approaches.
Old: Traditional procurement
Traditional approach: In traditional procurement logistics, orders were processed manually, based on simple demand forecasts and historical consumption data. Communication with suppliers was often by phone, fax or email, leading to delays and errors. Stock levels were kept high to cover uncertainties in delivery capability, which resulted in increased storage costs and capital commitment. The lack of transparency in the supply chains also made it difficult to adapt to market changes and led to inefficient processes.
New: Digital supply chain management
Supply chain management: The modern approach to procurement logistics relies on integrated and digital supply chain management. Procurement processes are automated and optimized through the use of ERP systems, electronic data interchange (EDI) and advanced planning tools. Real-time data enables precise determination of requirements and just-in-time deliveries significantly reduce stock levels. Leaps in innovation in AI and big data analytics enable predictive analytics, allowing companies to react proactively to market changes. Closer networking with suppliers via digital platforms increases transparency and agility in the supply chain, which ultimately leads to cost reductions and efficiency gains.
Practical example: Automotive industry
A leading automotive manufacturer transformed its procurement logistics by implementing a digital supply chain management system. By integrating suppliers into a common IT system, ordering processes were automated and communication was carried out in real time. This led to a 35% reduction in stock levels and lowered procurement costs by 20%. Delivery times were shortened by an average of two days and production capacity utilization increased to 95% due to higher material availability. These optimizations resulted in annual savings of over 50 million euros and significantly strengthened the company's market position.
Conclusion on supplier evaluation in procurement logistics
Conclusion:Procurement logistics forms the backbone of successful supply chain management. Significant increases in efficiency and cost savings can be achieved through just-in-time concepts in particular. Success depends largely on close cooperation with suppliers, robust processes and digital integration. Despite challenges such as susceptibility to disruption and geographical dependencies, new technologies such as AI and IoT offer promising solutions for the future of procurement logistics.
