Document Management System in Logistics
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In this article we look at the specific benefits of a good document management system in the logistics business. We look at the business of logistics. We also look at the kinds of documents generated by the business. Finally, we look at how a logistics business could benefit from using a good document management system.
What Is Logistics?
When you bought that cheap pencil made in China, did you wonder how it reached you all the way from some factory located in a remote part of China?
The answer is: Logistics. It was logistics that made the pencil available at the store near you.
Logistics has been defined as the art and science of managing and controlling the flow of goods, energy, information and other resources like products, services and people, from the source of production to the marketplace. More specifically, it involves having the right item in the right quantity at the right time at the right place for the right price.
Project Management
Logistics management does not simply involve assembling all the requirements. You cannot just get these from wherever available and dump them all at the site. The following additional tasks are key to good logistics management:
- Sequencing and scheduling the requirements to identify when the requirements for each item would arise,
- Locating the right quality of items that would ensure a successful commissioning and subsequent operations of the project,
- Procuring these and transporting to site at the best available prices and other terms, and
- Arranging for the proper storage of items delivered at site until needed to prevent damage or loss.
A large number of documents would typically be generated during the above processes. These include:
- List of project requirements and/or purchase requests
- Time schedules indicating required dates
- Specifications and cost estimates
- Tender documents where bids are invited
- Supplier and transporter quotations and comparison statements
- Reports on quality and performance evaluations
- Correspondence with suppliers and transporters
- Purchase order copies
- Inspection and compliance reports
- Invoices received from suppliers and transporters
- Payment documents
- Inventory records relating to receipts, issues and balances
- Item movement records (internal transport to final consumption)
- Accounts payables
Document Management:
Up to the second information
A good Web-based tracking system could keep constant track of each item on its way from point of origin to point of consumption. You would then become aware of any bottlenecks and could take immediate action (most likely a Web-based action) to tackle these.
Each shipment is assigned a tracking code and all the nodes on its path would use this code to update its receipt and dispatch. The updating would be done to relevant documents at a central server. By accessing updated documents, concerned persons would be able to monitor the shipmentâs progress.
Logistic Functions
In the following functions, good document and information management is essential for effective performance.
- Inventory: Documents generated would include Goods Received Notes, Material Requisitions from consuming departments, Materials Issue Acknowledgments, Accounting records, Bin Cards, Inventory verification reports, List of reorder points and Goods replenishment requests. A centralized computer-based system could eliminate the need for many paper documents and could speed up transactions. Such a system would also enable concerned persons to verify current availability of needed materials.
- Purchasing: Documents would include Suppliers lists, Purchase requests, Invitations to quote or bid, Quotes and bids received, Comparison reports, Correspondence and negotiation records, Supplier assessment reports, Purchase order copies and Inspection reports. A Web-based system could make locating and communicating with prospective suppliers, even if they were located at the other end of the world, far easier. All communications could be put on record without difficulty. This system could be integrated with the internal inventory system for error-free synchronization.
- Transport: In these days of tracking numbers and worldwide shipments, it is absolutely essential to have Web access to track all shipments. When integrated with purchasing and sales systems, the status of each purchase or sale order could be tracked from commencement to completion. Pending overdue orders could then be flagged for immediate attention.
- Warehousing: Similar to inventory, a centralized system could not only speed up transactions but also enable availability verifications. Considering that the warehouses could be located at geographically spread locations, true logistic planning operations could be carried out to deliver merchandise to different markets in an optimized manner. Times and costs could thus be minimized.
- Planning & Organizing: Information is the key input for effective planning and organizing. With the kind of centralized and up-to-date information availability ensured through the systems outlined above, it would be far easier to assess requirements, explore alternatives, collect information, communicate with suppliers, transporters and distributors, and continuously monitor performance.
The Document Management System
A Web-based system integrated with internal systems could transform conventional logistics management beyond recognition. It would now be possible to manage operations of a global scale even more easily than those within a small geographical area.
A Web-based system means that much of the information would be stored on a server accessible over the Internet. As a result, outside persons could access up-to-date information from wherever they are. The only requirements would be that they should have an Internet connection and should be authorized to access the document.
Business Benefits
The following specific benefits would result from a Web-based and integrated logistics management system.
- Better control over logistic operations making it possible to achieve desired goals and performance standards
- Speedier business transactions and internal operations leading to higher business volumes
- Possibility of getting requirements from the best sources worldwide at lower costs and better quality leading to enhanced profitability and customer satisfaction
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