Glossary of logistics terms

In logistics, the analysis of streams, e.g. of particular groups of goods or destination groups, is used to determine the output of subsequent process nodes encountered by the given stream (e.g. preparation for completion, packing, etc.), which depends on the performance of the node’s specific element (e.g. human labour, device performance) and designation of the axis of time in which the given stream can be processed in each of the cited nodes.

The analysis of streams is an analytical tool which is perfect for modelling daily order profiles with a known number of personnel or target number of pieces in a stream. It also allows for determining the limit value of the stream of goods that can be processed in the 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 organisation of the company’s warehouse and logistics flow. The Detail Plan mainly takes into account the following:

• customer expectations
• warehouse system automation
• physical properties of goods and any special transport conditions
• goods flow stream analysis and optimisation
• demographic and social conditions in the plant’s vicinity (labour market capabilities, among others)
• infrastructure – surface capabilities of the lot, hall
• project funding
• 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. Argument of process experience and competencies: the fact of execution of a large number of projects in many disciplines causes the consolidation of the related experiences and provides a broader base of solutions – it is possible to add knowledge on the currently applied technologies and their usefulness in the process
2. Argument of supplier market familiarity: the database on potential suppliers is disproportionately bigger than an average logistics user and the knowledge on confirmed competencies not based on catalogue information is verified in practice
3. Argument of independence: greater independence of consultants from supplier influence, e.g. in trade talks or product advertising
4. Argument of a “broader horizon”: in logistics process automation projects, it is necessary to know the mutual impacts of particular technologies on one another, so that they supplement each other and not constitute “blockers” – this requires experience of both automation, mechanics, IT, process and operations logistics, construction engineering, fire protection, OHS, statics, ergonomics, goods stream process analytics
5. Argument of 3PL services competencies: when building a logistics centre with the intention of offering logistics services for other disciplines, it is necessary to have process knowledge for other, not only own, product groups
6. Argument of knowledge about project implementation and management: when executing a project, it is necessary to have a competencies supervision over sub-    supplier works and familiarity of their techniques, including regulating standards and criteria used to deem the given system as functionally correct
7. Argument of mediator: project executions will nearly certainly feature consequences of differences in interests – an impartial perspective is useful in this case
8. Argument of possessing planning instruments: possessing a set of tools to execute the process of flow analysis, conceptual planning, creating tender documentation, project management, commissioning supervision

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 starts with the identification of the basic sizes of logistic flows both in qualitative and quantitative terms (structures of tasks or orders processed in subsequent processes).

The results of statistical (static from the point of view of the time axis for the process node) or flow analyses (dynamic when determining the rate of flow from point to point in a process) become the basis for analysing and mapping future processes.

The initial process planning (high level¹) leads to the establishment of their operating definition, i.e. description of the assumed activities or course of the goods stream. In process definition we also use the methodology determining which parameters are/will be variables and what effects (process results) 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

The initial process planning leads to the establishment of their operating definition, i.e. description of the assumed activities or course of the goods stream. In process definition we also use the methodology determining which parameters are/will be variables and what effects (process results) we expect.

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

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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).
Stream diagrams can be used to present the flows in systems of any scale. They are also used to show balances in micro-scales (biology, genetics) and macro-scales (ecosystems, Earth’s energy balance). In the logistics and warehousing disciplines, they are used in relation to the flows of warehouse processes, including goods and energy.

Example: