Micrologistics, a technique for optimizing internal logistics processes

Beyond a strategic and operational vision of the company, the logistics department needs to have tools that allow it to deepen its knowledge of the factors involved in the logistics chain of the organization. Micro-logistics provides a detailed perception of each of the processes and procedures, of the material and human resources that must be combined to ensure the success of operations and to optimize internal logistics processes.

What is micro logistics?

Micro logistics is a management technique that seeks to optimize the company’s internal logistics processes. To achieve this objective, it employs specific methods for needs analysis, planning objectives, monitoring activities and operations, studying results and implementing improvements. All this, with a high level of precision and detail, with the aim that the set of operational and administrative activities related to logistics translate into competitive advantages that ensure the effectiveness of the service, the perception of the desired quality by the customer and the profitability of the business activity.

Logistics management must not only be aligned with the company’s strategic objectives, but must also be integrated into each flow or value chain of each of the company’s product or service families. Among the tools that contribute to this is the use of value maps, which make it possible to identify these flows and specify the value from the customer’s perspective. This requires that the management team has integrated into its strategy the logistics processes embedded in the global supply chain, also considering those of its suppliers and customers.

For this reason, it is necessary for logistics management to form part of the management team’s organizational chart because its function is integrated into the company’s business model and, in addition, it must have first-hand knowledge of aspects such as supply strategies, financial resources, forecasts derived from marketing actions or supply or commercial area forecasts, among many others. This will help you to interact directly with all departments and align the planning of the company’s logistics processes with the requirements of their areas of activity.

For their part, logistics managers, beyond this strategic and operational vision, also need to have tools that allow them to deepen their knowledge of each of the factors involved in the organization’s logistics chain. It must also have a “micro” perception of each of the processes and procedures, of the material and human resources that have to be combined for the success of the operations.

Micrologistics helps to improve planning by providing programming and monitoring techniques that make it possible to continuously verify the achievement of objectives and, if necessary, to promote corrective measures that can be implemented quickly. These techniques necessarily involve the personnel, who must participate in the definition of objectives as well as in improvement programs and reviews.

Logistics management must provide personnel linked to the company, whether in-house or outsourced, with function manuals, procedural resources and documentary elements with as much detail as possible for each function. There are multiple resources in physical or digital format that can serve as a basis for each company to adapt to its requirements. Similarly, key performance indicators (KPIs) must be defined to evaluate the performance of each of the agents and elements involved in logistics processes, whether they are physical persons or material resources such as machinery, work areas or vehicles. This requires systematic monitoring of operations, supported by computer resources, with periodic and exhaustive analysis of each function, element and work station.

Scope of action of micro logistics

The scope of micro logistics covers all areas of the logistics process, from inbound logistics to reverse logistics, including supply forecasting, warehousing, inventory management, transportation and customer service strategies, as well as the analysis and evaluation of costs associated with internal and external operations.

Thus, for example, in the case of the physical distribution chain of a company dedicated to the import and export of products, the scope of micro logistics techniques will range from the reception of orders to the preparation and handling of cargo, the management of documentary elements, insurance, or the relationship to be established with the international logistics operator that will manage the operation. One of the achievements offered by micro logistics techniques is the increase of standards in operations, an aspect of great importance in a field such as international trade, with high levels of complexity, unforeseen events and external influences throughout the process. Standards make it possible to immediately identify any eventual abnormality and, consequently, to make decisions with agility and be able to take corrective actions to achieve safer and more effective operations.

Micro logistic & Lean Logistics

Micro logistics employs procedures from the Lean Six Sigma methodology, focused on gradual continuous improvement, which in the logistics field is particularly used to eliminate the work overload on people (driving personnel, handling of loads and materials, for example), reduce variability in processes (inventory levels, transport routes, document processes, etc.) and reduce inefficiencies (downtime of personnel, unnecessary searches, waits in the collection or delivery of goods, or damage due to poor stowage, among others).

Among the methods that can involve the entire organization, it is worth mentioning the so-called “total productive maintenance” or TPM, the “problem-solving diagrams”, the “5’S” technique applied to order and cleanliness, the “signaling systems” (Andon) or those dedicated to “failure prevention”, for example. This makes better use of available resources, such as machinery, manpower, materials and time. It also increases the safety of people and equipment, while reducing the costs of defects, overstocking, space, and parts used. The ultimate goal is to increase productivity, customer satisfaction, quality and, of course, cash flow.

Through this set of methodologies, micro logistics also makes it possible to optimize the use of packaging, the performance of vehicle fleets, freight transport units or transport routes, as well as to anticipate, prevent and detect errors before they become defects.

In the end, all of this has an impact on two highly significant aspects. On the one hand, it is possible to dedicate capital investments to areas of activity other than logistics and, on the other hand, the volume of externalized costs is reduced by reducing the impact caused by energy consumption in internal operations and non-optimized transport, which are a source of environmental pollution.