How real-time information creates an ideal flow of goods

Stefan Seufert, CTO/Vorstand EIKONA AG
Light currents on a busy road, which represent the optimal flow of goods.

Anyone who moves goods will have to coordinate everyone involved in the process to achieve the greatest possible efficiency. This requires mastering two worlds at the same time: physical movements and the parallel flow of information. Effectively integrating them drastically improves process quality and safety. In other words, digital processes with real-time communication ensure an optimal flow of goods.


Logistics organises the storage and transport of goods within and across company boundaries. It controls both the flow of goods in the warehouse and from plant to plant and organises the accompanying flow of information. If this is done well, logistics costs will fall. This goes hand in hand with the optimisation of inventories and the delivery of goods:

  • At the right time
  • At the right place
  • In the right quantity
  • With the right characteristics

Goods flows are ideal whenever the flow of information and physical movements are synchronised.


What is meant by the flow of information in logistics?

Logistics orders are processed in small steps, starting with the customer's order. The logistics chain then starts with the procurement of goods from a supplier and ends with the fulfillment of the order. An order changes its status every time progress is made. Sharing this change with all process stakeholders in real time or near-real time is what the flow of information is all about in logistics. In other words, anyone who processes a logistics order not only learns about what they are doing – for example, packing goods for shipping – but also discovers the current status of the complete order. This may include the fact that the goods are waiting in the packing zone. This status is recorded at a physical interface with every goods movement. This way, the system also effectively registers what quantity of an item or product was removed from a specific storage bin during picking, what stock still remains at that location, and what batches the product is from.


Flow of goods and information

When several people are working on an order simultaneously, it is important to clearly assign them tasks for individual work steps. For example, they can be assigned to a specific storage area for picking. In addition, for the process to progress, it must be instantly clear when a certain task is completed and goods can move on to the next stage. This is important for shipping orders that have several pickers combining items from different zones of the warehouse. Picking has to be marked as completed in the software before these items can be handed over for packing and transport. This may be done in the material flow computer or warehouse management system. These systems then initiate the next task. To achieve this, companies must close their digital information chain, ensure seamless information flows without data re-entry and integrate all the software systems with each other. This is the only way to stop errors from copying information from paper and to synchronise the flow of information so that everyone has the latest information.


What requirements have to be met for an optimal flow of goods?

Aside from the point when the customer's order is received, the most important stages in planning the flow of goods include the production of an item, its staging, and its delivery to the recipient. The task of material flow control is to integrate all the links in the value chain into one process and coordinate them with each other. In addition, the individual areas of intralogistics have to be optimised in the end-to-end process:

  • Low article inventory
  • Low space requirements
  • Fast throughput times
  • Low staffing requirements
  • Low process costs

How does a digital information flow support the optimal flow of goods?

If you want to achieve an optimal flow of goods, you have to harmonise processes within and across organisations. This is best achieved when the digital flow of information is fully integrated – the most important step to ensuring an optimal flow of goods. It is characterised by process standardisation, high process stability and security of supply. When the structure is this clear, the alignment of the material flows is also clearly visible. This reduces the need for materials and goods and improves flexibility in logistics processes because less space is required. Consequently, linking all information related to an order is a particularly important step in optimising the flow of goods. Only then can the material flow computer (MFC) do an effective job of controlling communications and interactions between connected solutions, i.e. the enterprise resource planning (ERP) system, warehouse management system (WMS) and transportation management system (TMS). When the MFC coordinates these solutions, it essentially closes the value chain with control commands as it connects and synchronises all the links in the chain.

Conclusion

Optimal flow of goods requires stable processes and continuous flow of information

Companies achieve an optimal flow of goods when they:

  • Clearly define the requirements of their projects
  • Analyse, optimise and clearly describe their processes
  • Integrate all sources of information and software systems used with each other

They can optimise goods movements in inbound goods, order picking and outbound goods all the better if they also adapt the spatial configuration of their facilities to the integrated processes. They will benefit from an efficient end-to-end process with a nearly optimal flow of goods.


Stefan Seufert
Stefan Seufert
CTO

As a design guru, the software developer delves into logistics service providers' requirements like no other. He is passionate about exchanging information securely and efficiently and thus speeding up the physical logistics process.


Add a comment

Please calculate 6 plus 8.