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The rise of the logistics manager

04/02/2022


In the past, working in a warehouse – or even managing it – was certainly not considered a very sexy job. In contrast, today the warehouse and its managers are recognised as vital contributors to the bottom line and are part of a larger management activity called ‘logistics’. Today’s company heroes, in marketing (or sales for that matter), understand that they have to work closely with logistics to keep the business afloat. So, what has happened in recent decades to bring about this great change?

Horrea Galbae

The Horrea Galbae, a warehouse complex near Ostia. © Sailko.

A brief history of warehousing

We all know, of course, that a warehouse is an environment where we store goods (‘wares’) for commercial purposes. Its purpose originates from our very early days, when ancient civilisations relied on storage pits to protect surplus food. The Romans were the first to create larger facilities. The Horrea Galbae, a warehouse complex near Ostia, was bigger than most of our modern warehouses, covering no less than 21,000 m². Centuries later, most warehouses were constructed around ports to facilitate trading.

Things accelerated when the industrial revolution began in the mid-18th century, propelled by mass production. New forms of power, like hydraulics and electricity, along with modern storage systems, reshaped warehouse design. To many people the forklift truck is the typical warehouse machine, continuously fetching and delivering goods from A to B. Its role in the development of the modern warehouse cannot be underestimated.

Logistics relies on marketing

Despite its fundamental and growing importance, the warehouse continued for many years to be seen as a dark and dusty place. Students at universities dreamt of careers in sales, healthcare, management or perhaps even in accounting, but not in the physical transport and handling of goods.

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More recently, warehousing has developed a brighter image and is a more attractive and fulfilling career choice. It is clear that the modern logistics or warehouse manager does much more than just counting inventories or occasionally preparing a sales order. When we look at what goes on in a warehouse, we see a very different reality now. Although it is still a storage space, its role also covers complex tasks like receiving, kitting, repacking, picking and grouping orders; packing, checking and labelling them; and finally dispatching goods. To keep inventory high enough to avoid lost sales but low enough to run efficiently, logistics needs timely and accurate sales forecasts.

The manager’s responsibility stretches way beyond the warehouse, as suppliers, carriers and brick-and-mortar shops, as well as e-commerce businesses, need to be involved as well. Besides accuracy, proper analytics help in making the right decisions. Reading trends helps you to predict the popularity of particular products and much more. Good forecasting enables you not only to keep the optimum level of inventory but to spend less time on managing operations. In short, the forecast dictates the work.

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Needless to say, the modern warehouse manager organises and controls a large workforce. With the help of modern IoT tools, scanners, RFIDs and many other technical devices, his or her staff can play their part in making and keeping the business successful. However, they can’t do their job well without sales forecasts and detailed information on campaign plans from the marketing department.

Marketing relies on logistics

Does this mean that marketing is still the driving force of a company? No, because marketing has a similar dependency on the logistics department if its efforts are to be successful. Marketing may still hold the primary responsibility for attracting customers and generating sales, but the two departments actually have more in common than most of us realise. In particular, they both have customer satisfaction as one of their main goals! Logistics contributes to achieving that in many ways:

  • Marketing aims to deliver choice to the customer. This is only possible if the logistics department stores a large number of SKUs (stock keeping units) and keeps accurate records of each item’s location.
  • Similarly, at the front end of the business, the web shop needs to show real-time stock to avoid disappointments.
  • After ordering, the goods are picked and packaged. The quality of this process influences customers’ perception of the company. Clever packaging can enhance its environment-friendly image if, for instance, boxes are cut to the right height or selected to minimise the need for filling material.
  • Customers want to be kept informed on the status of their order – for which the logistics department provides all data.
  • Wrong T-shirt? When customers return goods, they expect to receive the desired smaller size within a few days – or a prompt refund.
  • When we leave it late to do our online Christmas shopping, we still expect a timely delivery. This puts enormous pressure on the logistics department. Christmas is just one of many sales peaks during the year which logistics must handle effectively to keep customers satisfied.
  • If marketing wants to develop segmented approaches for various customer groups, the warehouse has to cope with all these differences if the strategy is to succeed.

These are just a few examples where marketing makes promises to the customer which cannot be fulfilled without well-prepared logistics operations and systems.

Co-operation and communication are key

We have looked at business from two different angles: marketing and logistics. Crucially, if a company is to offer the right products to the right customers in the right place, these two complementary business operations must co-operate.

First and foremost, this co-operation is made possible through modern IT technology and tools, like a warehouse management system (WMS) connected to the company’s enterprise resource planning (ERP) system. This ensures that both departments can work with accurate data.

To improve things further, logistics managers are increasingly being invited to join their marketing counterparts in the board room. However technologically advanced their data sharing might be, customer satisfaction ultimately depends on regular and intensive communication between the two.