Glossary of logistics terms

Stream analysis is used in logistics planning for individual commodity groups to determine the throughput of subsequent process nodes in the path of a given stream (e.g. preparation for picking, packing, etc.), which depends on the performance of the process node (e.g. human labour, equipment performance) and to determine the time in which a given stream can be processed at each quoted node.

The analytical method of stream analysis is ideal for modelling daily order profiles with a known number of staff or target number of items in a stream. It also makes it possible to determine the limit of a stream of goods that can be processed in a given warehouse with the existing or planned technical infrastructure.

Benefits resulting from using automation in warehouses:

• reduction of the time of process execution
• increase in the warehouse’s performance
• increase in the accuracy of the executed work
• lowering warehousing costs
• increase in control over the warehouse inventory
• improvement of the flow of information
• better utilisation of the available human resources
• reduction of the number of errors (caused until now by the human factor)

What is worth noting when planning warehouse automation?

• identification of unprofitable flow areas
• Key Performance Indicators (KPI) analysis
• determination of the ROI (Return on Investment) in financial and time terms
• determination of the costs of machinery – both of its purchase and use

Detail Plan - detailed planning of the facilities and organisation of the warehouse and logistics flow in the warehouse. The Detail Plan mainly takes into account:

• determination of technical parameters of machinery and equipment
• degree of automation of warehouse systems
• physical properties of goods and any special transport conditions
• goods flow stream analysis and optimisation
• infrastructure – surface capabilities of the lot, hall
• planned growth and opportunities for expanding the project

You will find more information on detailed planning here.

Logistics consulting is key when an enterprise features the following:

• a logistics problem affecting other company departments and requiring a quick solution
• incorporation of a new investment requiring the development of new processes
• activities aimed at limiting costs
• employment restructuration

The following arguments speak for the participation of logistics consultants:

1. process competence and experience: the fact of having carried out a large number of projects in many industries consolidates the related experience and provides a larger solution base - including an orientation to emerging technologies on the market, their possibilities and weaknesses in relation to the specific use case.
2. good knowledge of the supplier market: the database of potential suppliers is disproportionately larger than that of the average logistics user, as well as knowledge of proven competence not based on directory information but verified in practice
3. independence from the technology supplier: greater independence of consultants from the influence of the supplier, e.g. in sales discussions or when advertising the product, including specific conditions of use and actual performance achieved in practice
4. a broad horizon of knowledge: in logistics process automation projects, it is necessary to know how the various technologies interact with each other so that they are complementary and not mutually exclusive - experience is required in the fields of automation, mechanics, IT, process and operational logistics, construction, fire safety, health and safety, statics, ergonomics, process analytics, goods streams and human behaviour when interacting with automation elements
5. Competence for 3PL services: when building a logistics centre with the intention of offering logistics services to other industries, process knowledge is required for other product groups in addition to own products
6. knowledge of the implementation and management of the project: during the implementation of the project, it is necessary to have competent supervision of the work of subcontractors and to know their techniques, including the standards governing and the criteria by which a system can be considered functionally correct and accessible to the user at the level implied by the standards or the commercial contracts concluded
7. mediator: project implementation is almost certain to give rise to situations arising from differences in interest - this is where an objective view and the ability to find a position acceptable to all parties to the project come in handy
8. having planning instruments: having a set of tools to carry out the process of flow analysis, conceptual planning, creation of tender documents, project management, supervision of vendor-independent start-up and resources

Each process mapping must include the following elements:

• process beginning and end
• process structure
• point of entry and exit to and from the process of its components
• definition of the actors taking part in the process (suppliers, employees, etc.)
• who is the process owner (in terms of using its result) or who is responsible for its supervision
• performance evaluation criteria (in practice, a maximum of 4 evaluation indicators are used, because an excessive number of them can cause mutual exclusion and process blockage in consequence)
• impact on the entire process chain – this can include, e.g. indicator of usefulness to develop the final result, the so-called success share indicator
• measurement tools
• criteria and tools for process control
• resources (human, assets, IT, etc.) intended for process execution and affecting its costs
• scenarios of deviation from the primary process
• process documentation

The MASTER PLANNING process begins with the identification of the basic volumes of logistical flows from both the quantitative side and the structures that influence the choice of technology.

The results of statistical analyses (static from the point of view of the timeline for a process node) or dynamic analyses (determining point-to-point process flow rates) become the basis for analysing and mapping future processes.

As a result of pre-planning (high level¹), an operational definition of the processes is created, i.e. a description of the assumed activities or the flow of goods. In the process definition, we also use methods to determine what parameters will be the variables and what effects (results of the process operation) we expect.

Building each master plan is based on the same principles, but ultimately there are no two identical master plans. Each of them is individually adapted to the following:

• company building
• infrastructure
• order specification
• devices and automation
• customer needs

¹⁾ Often encountered in practice an in talks with the customers expression based on the assumption that the initial planning process cannot include the consideration of process particulars with a depth typical for process algorithms

It includes the collection of general data on the following topics:

• the product itself
• its distribution
• number of employees
• current state of automation
• current stream flow
• development opportunities and needs
• analysis of logistics processes and their performanc

A logistics process includes, among others, the following:

1. determination of analytical data
2. stream analysis
3. planning of processes to be implemented
4. graphical design of the distribution of processes in space and time
5. establishment of the investment budget, amount of required personal resources, return on investment
6. functional analysis of processes​

The name of the diagrams is derived from the name of Matthew H. Sankey, an Irish engineer who was first to apply the aforementioned method to demonstrate energy losses during steam machine operation (1898).

Flow charts can be used to represent flows in systems of any scale. In the logistics and warehousing industry, they are used for the flow of warehouse processes, including goods and energy.

Example: