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AdexinBlog5 real-world logistics management examples: Learn from success stories and best practices

5 real-world logistics management examples: Learn from success stories and best practices

Jul 10, 2024
7 min

Most success stories in logistics come from a combination of experience, technology, the ability to change, and, of course, logistics strategy. These four elements are crucial in creating the most successful implementations, change management, and digital transformation in the logistics industry.

This article reveals 5 logistics management examples that have changed the logistics industry forever. Here, you can also learn what triggered these changes and the results. We define the outcomes of these changes based on insights and personal experience that we gained while working with various companies in the logistics industry.

If you're a small or medium-sized business, this article will help you gain industry knowledge. Moreover, it can also give you a hint about where you should focus your business to remain cost-effective and competitive at the same time.

Logistics meaning with example

Logistics is a complex process that concentrates on warehouse and inventory management to plan warehouse space and take care of all transportation means. The last one can cover intralogistics and road freight. The subject of logistics is also deeply tied to technology development such as blockchain in supply chain management, digital twin, and other business logistics processes.

A great example of logistics' meaning can be given by some companies that complete the picture of this vibrant landscape with various modalities. So, the best idea is to provide you with an example of an existing organization that operates in multiple industries. To be most accurate, we can give an example of a business with fulfillment services.

An example of a logistics business is UPS, which is in the US market. United Parcel Service (UPS) was founded in 1907 in Seattle, WA, USA. The company delivers over 15 million packages daily to 6.1 million customers in more than 200 countries and territories. UPS employs over 500,000 people; its stock value is about $136.31 in 2024.

UPS is the largest logistics company, extending its services to many industries. There is no particular niche that UPS doesn't operate in within logistics. UPS operates on a hub-and-spoke model, providing contract logistics services with packages coming in through distribution centers and then being sent to one or more hubs to be sorted and forwarded to their destination. The best achievement of UPS, we think, is one of the best: their one-day delivery package service for small packages. This means you can get a package within 24 hours anywhere worldwide (with some exceptions). 

Areas that UPS operates in
Areas that UPS operates in

Here are examples of logistics that UPS operates in:

  • Intermodal transport. The way of transport that mixes rail, road, and sea for efficient movement of goods, optimizing costs and transit times.

  • Air freight. Fast and reliable air transport for urgent deliveries, including overnight and temperature-controlled services.

  • Road transport. This is a comprehensive road transport solution for domestic and international shipments, including LTL and FTL options.

  • Forwarding. This area concerns the management of global freight logistics, handling customs, documentation, and cargo insurance for hassle-free international shipping.

  • Supply Chain Solutions. UPS SCS offers extensive management services, including logistics, distribution, inventory optimization, and industry-specific solutions, such as healthcare and retail logistics.

  • Ocean Freight. UPS customers can get cost-effective international ocean transportation services using full-container-load (FCL) and less-than-container-load (LCL) services.

  • Customs clearance. UPS often uses external companies to handle customs, but it also has a substantial department worldwide to handle customs issues. This one assists with import/export compliance, document handling, import duties, and regulatory compliance.

  • Reverse logistics. UPS efficiently manages returns, product recalls, recycling, and waste management.

How to optimize reverse logistics management with software

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Naturally, UPS hasUPS has many competitors these days, and domestically, they are the US Postal Service (USPS) and Federal Express (FedEx). Stronger competition is even internationally, where companies such as DHL, TNT NV, Royal Mail, and Japan Post are trying to push UPS from its dominant position.  

Logistics case studies: 5 logistics examples

UPS is a great example of logistics. It clearly shows that the business is good in four elements, among which we can find a great strategy. In this case, we should consider what happened during the Corona crisis. UPS, which possesses UPS Healthcare Logistics, achieved enormous turnover by supporting logistics activities with shipping medical goods during the pandemic. That was a great strategy adaptation to shift its business towards healthcare at that time.

Beyond UPS, we can call 5 other strong examples that, in addition to their core parcel delivery services, can expand your knowledge about logistics strategies and management. See some short case studies to get insights into strategy, technology adaptation, and the ability to shift operations.

We set up several problems that occurred in the logistics and explained how businesses tackled these problems.

Examples showing the efficient logistics by businesses 
Examples showing the efficient logistics by businesses 

Demand Fluctuations and Capacity with Supply Chain Management

Logistics companies, most of the time, struggle with fluctuations. Decreasing demand for one product cannot be compensated by rising demand for another. From this aspect, we can conclude the following: demand for products can fluctuate, creating challenges for internal logistics resource allocation (e.g., trucks, staff).

An excellent approach to solving these issues is fostering long-term relationships with clients. We have observed this based on XPO Logistics, a company from the US. By offering a range of contract lengths and adaptable solutions, the company caters to changing market conditions and evolving client requirements while fostering long-term partnerships and customer satisfaction. The key deployments by XPO Logistics:

  • Flexible staffing can't handle peaks; outsourcing can offer a solution.

  • Better managing service providers with multiple clients, allowing them to balance demand fluctuations from different industries.

Flexibility vs. Efficiency in the global supply chain

Companies often keep their logistics management in-house to maintain direct customer contact and respond to changing customer demand planning. This creates control in management and limited flexibility but helps maintain efficiency. Here is the challenge posed by this approach: Finding a balance for internal management that allows for direct customer interaction and quicker response to changing needs without losing efficiency.

FedEx is an example of a company that has handled this issue, but it is not unique because many companies have faced similar problems:

  • FedEx prioritizes efficiency and resists schedule changes while improving its pricing model.

  • They prioritize flexibility while maintaining a certain level of efficiency, which helps companies and their customers with outsourcing.

Personnel and Equipment for effective logistics management

The availability of personnel and equipment in a company conducting logistics activities in-house entails responsibility for personnel matters such as recruitment, selection, and training. Sufficient equipment must be available for any necessary repairs. Companies face this challenge: At a certain point, In-house logistics require managing personnel (recruitment, training) and equipment maintenance. This requires upfront investment in logistics infrastructure to prevent failures in equipment and all business processes.

An excellent example of how these issues are handled is DHL. They outsourced logistics management, which was quite a relief for the company and allowed for overhead cost reduction. They identified that different customers have varying needs by industry, enabling them to deploy a more suitable management model for each facility. The final DHL’s takeaway was:

  • Outsourcing can be cost-effective if it offers a higher return on investment than internal management, especially when financial resources are limited. 

  • Moreover, outsourcing such as using third-party logistics relieves this burden but reduces control over staff and equipment.

Future Trends and Technology through automation and inventory management

The impact of emerging trends and concepts is now heavily focused on technology in logistics methods. The high-tech industry has brought changes to different sectors of the logistics industry. These trends are expected to influence many major changes over time. The major challenge here is: Technology adaptation for various logistics modes, including warehouse automation, intralogistics, and energy efficiency.

DSV from Denmark is an example of a logistics company that has handled this challenge. They initially created their own DSV fulfillment factory with a significant investment in automation in a single facility. By establishing a modernized center as a testing and development site, they expanded automation adaptation to other facilities. DSV has fostered technology and adapted trends as an early adopter of technology in small areas of their operations.

Global transportation and logistics management

Everything is becoming increasingly expensive, and global transportation is no exception. When we need to ship quickly, we typically use air freight, which has become more expensive due to environmental considerations. Transportation costs are among the top challenges facing the freight logistics industry, as they constitute one of its primary expenses. Global transportation has become a pressing issue. Here is the defined challenge: Air freight has become highly expensive and has faced significant international criticism due to the lack of green policies for air shipping, which affects the brand image and leads to lower shipping volumes.

A good example is KLM Cargo, which has implemented sustainable transportation models for air cargo and fuels to lower its carbon footprint. KLM Cargo aims to optimize air shipping costs and improve its brand image for future orders despite the challenge of increasingly unpredictable shipping volumes.

Here are some good examples of how to deal with the latest challenges in the logistics industry. The main lesson for small and medium-sized companies is that no logistics challenges can be overcome. We've given you a glimpse of how it works. In the next part of this article, we will reveal how companies can truly achieve their business goals by positioning themselves effectively in the market.

Top 10 examples of logistics technology adapted to real-life

There are several ways to leverage technology in logistics. One of the best approaches is to learn from others' experiences. Fortunately, plenty of high-tech developments currently available on the market can be utilized in your logistics. 

Let's explore together what is worth considering:

1. Warehouse automation for accurate inventory control

Many logistics companies like Amazon and Alibaba have implemented advanced robotics and automated systems in their warehouses, such as autonomous vehicles. These technologies help optimize inventory management, order picking, and packing processes, improving efficiency and reducing operating costs.

2. Route optimization software for efficient routes

Companies such as UPS and FedEx use sophisticated route optimization software. These systems analyze various factors, such as traffic patterns, delivery locations, and package sizes, to determine the most efficient delivery routes. This reduces fuel consumption and emissions and increases delivery speed and customer satisfaction. Very often, these companies build logistics management software tailored specifically to their needs.

3. Tracking and monitoring using IoT for logistics service

IoT (Internet of Things) devices are increasingly used in logistics to track shipments in real-time. These devices provide precise location data, monitor environmental conditions (such as temperature and humidity in the case of perishable goods, in other words, FMCG), and alert logistics managers to any potential problems or delays. This technology provides better visibility and control over the supply chain, leading to better decision-making and customer service.

4. Transportation management for more effective logistics

Transportation management systems (TMS), provided by companies like Oracle, SAP, and IFS, are used to manage freight. These systems help in managing and optimizing freight movements, carrier selection, and freight costs. However, relying on large logistics management software providers may not always meet the specific needs crucial to your business. Opting for a custom-built TMS system tailored to your business requirements can provide the same affordability as off-the-shelf solutions while ensuring it addresses your unique operational needs effectively.

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5. Fleet management system for better customer experience

Fleet management systems (FleetMS) are used to track and manage fleets of vehicles. These systems provide real-time monitoring of vehicle locations, maintenance schedules, driver behavior, and fuel consumption, helping to optimize fleet operations and reduce costs. Implementing a comprehensive FleetMS that covers all transportation modalities can be challenging, especially in highly saturated transportation environments. Customized FMS solutions can address specific needs such as loading and route planning, ensuring efficient and effective fleet management.

6. Supply chain control tower to reduce costs

Supply chain control towers integrate data from various sources across the supply chain to provide real-time visibility and control. Examples include SAP's Supply Chain Control Tower and Oracle's Supply Chain Management Cloud. These platforms enable proactive management of supply chain disruptions, inventory levels, and demand forecasting. SCCT systems can be complex, and we highly recommend getting a custom SCCT system rather than an off-the-shelf one.

7. Enterprise resource planning system

Enterprise resource planning systems (ERP), such as SAP ERP, Oracle ERP Cloud, or Microsoft Dynamics 365, integrate and manage core business processes across an organization. In logistics, ERP systems can operate as inventory management software, procurement, finance, and customer service operations, providing a unified platform for data management and decision-making. If you have small and medium-sized businesses, you can get a custom ERP system developed at a lower fee than purchasing those from the market.

8. Document management system for better quality control

Document management systems, such as MS SharePoint, are used to digitize and organize documents related to logistics operations. These systems facilitate efficient storage, retrieval, and sharing of shipping documents, ensuring compliance with regulatory requirements and improving team collaboration. In any case of need, you may need your DMS system only for POD or invoice management. Both instances are characteristics of SMBs. Here, you can also benefit from custom DMS system development.

We have successfully implemented a DMS system at one of our clients. In this case, the implementation enhances the quality of shipping document management with built-in security and compliance features that enable on-time document generation and digital document flow through all departments. This solution also provides a competitive advantage as it improves network management.

9. Warehouse management system to improve logistics processes

WMS software manages warehouse operations, such as Warehouse Management from Manhattan Associates or Blue Yonder (formerly JDA Software). Warehouse management systems optimize inventory storage, picking, packing, and shipping processes, improving warehouse efficiency and accuracy. You can also get your modern WMS system tailored to your business needs.

10. Order management system to gain a competitive edge

OMS platforms, such as IBM Sterling Order Management or Salesforce Order Management, streamline order processing and fulfillment. These systems manage orders from receipt to delivery, optimizing order routing, inventory allocation, and customer service, increasing overall order management efficiency. Custom OMS systems can guarantee more efficiency and remain more cost-effective.

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Summary on logistics management

In today's dynamic logistics landscape, the key to success is a powerful combination of experience, cutting-edge technology, adaptability, and a constant drive to innovate. Industry giants such as UPS, XPO Logistics, FedEx, DHL, and DSV serve as excellent examples.

It should be clear that these leaders have achieved significant performance improvements if they proactively address challenges and take advantage of technological advances. Greater customer satisfaction and overall operational advantage can be achieved. From advanced automation and customized management systems to strategic partnerships, their short stories demonstrate the transformative power of innovation in logistics.

Adexin offers custom solutions designed specifically for your business. We provide affordable options that can help you achieve superior efficiency and effectiveness, regardless of your business's size. Contact us today to learn how we can help you implement cutting-edge custom logistics solutions and strategies. Together, we can optimize your logistics, reduce costs, and strengthen your competitive advantage.  Join us on the journey to logistics excellence.

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FAQ

What are the four key elements that contribute to successful logistics management implementations?

The four key elements are experience, technology, change capability, and logistics strategy. These elements are crucial for successful implementation, change management, and digital transformation in the logistics industry.

Can you give an example of a logistics company that has successfully adapted to fluctuations in demand and capacity issues?

An excellent example is XPO Logistics. The company copes with fluctuations in demand by maintaining long-term relationships with customers and offering flexible solutions. It also manages multiple service providers, which allows it to balance demand across industries.

How has FedEx dealt with the challenge of balancing flexibility and efficiency in logistics management?

FedEx prioritizes efficiency while maintaining flexibility, improving its pricing model, and ensuring a certain level of operational efficiency. This approach helps FedEx and its customers effectively manage outsourcing without losing control of logistics processes.

What role has technology played in DSV's logistics management strategy from Denmark?

DSV implemented technology through significant investments in automation at its order fulfillment facility. This initial deployment served as a testing ground, allowing DSV to expand automation and modernize operations at other facilities, which fostered early adoption of technology.

How has KLM Cargo dealt with the challenge of expensive and environmentally criticized air freight?

KLM Cargo has dealt with this challenge by adopting sustainable transportation models and using green fuels. This approach not only helped reduce air freight costs but also improved the company's brand image and readiness for future orders by addressing environmental issues.

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