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LogisticsZone

Introduction to Logistics

Getting your Logistics right means that you will have the right items and resources in the right places at the right time, saving time and costs, improving service and customer satisfaction and encouraging better project integration.

LogisticsZone aims to provide a point of reference for the growing interest in this topic.

Improvements in logistics can be achieved at every stage in the construction process. For those with a basic to intermediate understanding of logistics management this fact sheet highlights some of the opportunities.

What is logistics ?

Logistics comprises the physical and management process to optimise the flow of goods, materials, equipment and people from their source to the point of use. Logistics is often seen as storage and transport management, yet this is far from the whole picture. There are many interfaces in logistics and each of them creates opportunities for improvements or errors. Good pre-planning, which includes structuring the interfaces and putting in place the means to monitor the process are vital to a successful outcome.

The benefits of good logistics

Good logistics ensure that the right items and resources are in the right places at the right time.

Logistics in practice

Applying logistics best practice involves commitment, effort and attention to detail. This fact sheet lists some of the key areas to consider in drawing up a logistics programme and indicates areas which could yield opportunities for improvements in existing programmes.

The role of the Logistics Manager

On large projects it might be necessary to appoint a logistics manager in a dedicated, full time role. For smaller projects the role can be combined with wider project management responsibilities. In both cases, authority and support from senior management is essential. The logistics manager should be appointed as early as possible in the project life cycle so that logistics can be considered at the design stage when it is possible to make changes to accommodate good practice.

Logistics Strategy and Planning

Strategy and planning should be top priority for the Logistics Manager. The detail will depend on the nature of the project but objectives could include:

Structuring the process

Setting up service level agreements at each interface is a good practice. Such agreements will define roles and responsibilities and how performance at each interface will be measured. Simplify the interfaces wherever possible and consider whether the number of interfaces can be reduced. For example by reducing the number of suppliers. Consider using information technology to link all parties, perhaps via an extranet on the worldwide web. This will make communication faster and more accurate and ensure that everybody is looking at the same and latest version of information.

Monitoring time and costs

Consider how much time is spent at each stage in the process and how much that time costs. Examine how much time is spent dealing with materials, for example. Look at the processes for receiving them, sometimes unannounced, chasing up orders and counting and checking quantities. On smaller sites this is often done by skilled craftsmen taking them away from key added value activities and adding to the real cost of the project. These activities are often hidden or are an accepted part of the job but significant savings are possible.

Focus on customer service

Clear targets for customer service are important whether the customer is external (a paying customer) or internal (working for the same organisation but still requiring a service). Setting and meeting customer service levels is a key component of best practice logistics. It is essential to meet customers to understand their needs. Questions could include:

The answers to these questions often lead a thorough review of how goods and services can be delivered most conveniently and at the lowest possible costs.

Organising the site

Opportunities for best practice improvement exist in virtually every corner of the site:

Case Study - BAA at Heathrow

At Heathrow Airport, the British Airports Authority (BAA) has established a materials consolidation centre. The centre operates established warehouse management techniques, to receive all bulk deliveries and re-deliver them to the point of use during the night. Benefits include local traffic mileage reduced by 20,000 kms, re-use of assets, cost savings of 2.5% and a reduction of 80% in incomplete tasks due to lack of materials. Although Heathrow Airport is very large, the processes used can be applied very successfully on smaller sites.

Information Management

Good information management is important in effective logistics. Consider some of the following to enhance how data is gathered and viewed.

Measurement

Measurement provides the basis for improved forecasting of activities, improved scheduling and better risk management. It can contribute to certainty in a construction programme in relation to project timing. It can keep staff working to plan.

Key Performance Indicators

Monitoring specific and relevant key performance indicators (KPIs) will indicate current performance and trends, and show where action needs to be directed. Key Performance Indicators should be aligned to the overall project objective in terms of completion time, cost and customer satisfaction. (For more information on KPIs, please visit KPIZone). Activities which could be measured and used to develop logistics KPIs include: