Internal logistics is the management of material flows from the processing of incoming goods to the workplace and from there all the way to shipment. In the value stream, internal logistics creates an opportunity for production to succeed in its own goals – for example, in terms of balance management and timely and accurate material deliveries. Internal logistics is often thought of as a secondary function next to the core functions, although in fact it enables and enhances daily production operations.
The company’s strategic priority areas should be chosen carefully, so that the core functions get a sufficient boost for development. You cannot and should not strive to be the best at everything. Internal logistics should be outsourced to an expert who makes and develops it as a main priority in their own business and utilizes development ideas across industry boundaries with their own customers and product development. Then the focus of development for the client company is focused on its own core functions such as product development and product manufacturing.
In the internal logistics service, everything always starts from the production needs of the customer and the customer company, and the service and functions are always built on a case-by-case basis. As a rule, the puzzle is assembled from standard building blocks that have been tested and found to work. In order for the operation to be perfectly stitched together to meet the needs of production, customization is needed, for example, in the scheduling of the distribution of materials, parts or components and, on a case-by-case basis, in system integrations. The best possible operating model and operational development can be achieved by looking at the whole together with the customer. A strong part of HUB Logistics’ operations is that we spar with production needs and operating models “outside our own box”. Self-discipline and “thinking outside the box” are firmly in the spine.
With inventory management, you improve efficiency and minimize errors
Well-implemented internal logistics creates added value in itself. Especially if you operate with your own inventory management system, you can generate a lot of data for the customer about the material flow and the production situation, which is a significant springboard for development activities.
Balance errors, picking errors and timing problems in material deliveries, as well as the loss of information on the location of goods, are traditional challenges encountered in warehouse management. It causes turbulence in production and is usually visible to the end customer as delays and faulty products, and naturally as a loss of efficiency.
Every industrial operation has internal logistics in one way or another. The first step is to separate internal logistics and production into their own functions, in which case you can be good at both. A production worker is not always the best person to collect efficiently or to keep inventory accounting balance management at a good or excellent level. These are not the main functions of a production employee, and these areas cannot usually be measured very precisely.
The second step is also familiar from other operating environments: the tools must be in good condition. Inventory management systems are created to support balance management, continuous inventory, efficient collection, maintenance of location information and easily customizable documentation. In addition to systems, another important tool is the transport equipment used in internal logistics. Why use a forklift to transport one pallet at a time, when the right parts and components can be delivered with trolley delivery – and even more so with demand control, so that production is not filled with materials that it does not need at that very moment.
Mikko Heinilä
HUB Logistics’ business director and all-rounder in internal logistics, who has the ability to solve the knots of companies’ logistics with a relaxed and sure grip.
