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Procurement logistics: definition and important aspects for buyers
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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
Introduction to procurement logistics
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 suppliers 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.
Efficient procurement logistics through just-in-time
The implementation of just-in-time (JIT) in procurement logistics minimizes stock levels and optimizes material flows. By precisely matching deliveries to production requirements, excess stock is avoided and resources are used efficiently.
Practical example: JIT at a car manufacturer
Situation: An automobile manufacturer wants to reduce storage costs and increase production flexibility:
- Demand planning: real-time production data is shared with suppliers.
- Supplier selection: Partnership with reliable suppliers in geographical proximity.
- Order processing: Automated ordering processes based on current demand reports.
- Transport logistics: Daily, synchronized deliveries directly to the assembly lines.
Result:
- Stock levels reduced by 30%.
- Faster response to market changes.
- Cost savings through reduced space requirements and less tied-up capital.
Evaluation and strategic findings
✓ Critical success factors
→ Supplier integration: Close collaboration and transparent exchange of information with strategic suppliers for synchronized JIT processes
→ Process stability: standardized, robust logistics processes as the basis for reliable JIT deliveries
→ Digitalization: real-time-capable IT systems for precise demand planning and supplier integration
⚠ Challenges and limitations
→ Susceptibility to disruption: Increased risk of supply interruptions due to minimal buffer stocks
→ Geographical dependency: effective JIT implementation requires geographical proximity to core suppliers
→ Weighing up costs: Balance between inventory reduction and increased transportation costs due to more frequent deliveries
Future trends and implications:
"The integration of real-time tracking and AI-supported forecasting is revolutionizing JIT procurement"
→ Predictive analytics for more precise demand forecasts
→ IoT-based transport monitoring
→ Automated milk run optimization
→ Digital twins for logistics simulation
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.
