In-Plant Logistics Processes, Challenges, and Best Strategies: Guide 2024

Optimizing every step of the production process is crucial for successful supply chain operations and management. But what happens after raw materials arrive and before finished goods exit your factory doors? That’s where in-plant logistics comes in. This often-overlooked aspect of supply chain logistics plays a critical role in ensuring a smooth flow of materials, components, and finished products throughout your facility.

This comprehensive guide covers everything you need to know to optimize your in-plant logistics operations, improve production flow, and boost efficiency. Learn about the challenges of inefficient plant logistics, why efficiency is important, and the best tips on optimizing in-plant logistics management to gain a competitive edge.

In-plant logistics is not a dark matter anymore! Let’s begin.

What is in-plant logistics?

In-plant logistics, also known as internal logistics, refers to the intricate and systematic management of materials, goods, and shipment movements within a manufacturing facility. This includes the reception, handling, and storage of inbound raw materials, components, and parts as they enter the plant, as well as their transportation to various production lines and workstations. Throughout the production process, work-in-progress items are carefully moved between different stages to ensure seamless workflow and efficiency. Upon completion, finished goods are then transported to designated storage areas before being prepared for outbound shipment.

The meticulous coordination of these internal movements is crucial for maintaining production schedules, minimizing delays, and ensuring that shipments are correctly balanced, secured, and compliant with all regulations. Effective in-plant logistics ensures that every movement within the plant is optimized for efficiency, safety, and cost-effectiveness, contributing significantly to the overall success of the supply chain.

Key In-Plant Logistics Processes to Know About

Let’s capture the entire flow of logistical processes within a plant, highlighting the critical steps involved in managing the movement of goods efficiently and securely.

1. Gate Entry and Vehicle Registration: Upon arrival, the vehicle undergoes a security check to ensure it meets safety and compliance standards. Vehicle details, driver information, and shipment documentation are recorded in the system.

2. Weighbridge Check-In:

Inbound: The vehicle is directed to the weighbridge for an initial weighing to record the gross weight, ensuring accurate weight tracking for inventory and compliance purposes. The recorded weight is documented and linked to the vehicle and shipment details.

Outbound: The empty vehicle is directed to the weighbridge for an initial weighing to record the tare weight. The recorded weight is documented and linked to the vehicle and shipment details.

3. Dock Assignment: Based on the type of materials and the availability of docks, the vehicle is assigned a specific dock.

Inbound: This step includes scheduling and coordinating the arrival of vehicles to minimize wait times and congestion.

Outbound: The assignment is based on the shipment schedule and dock availability, coordinating the departure of vehicles to minimize wait times and congestion.

4. Loading/Unloading:

Inbound: Equipment such as forklifts or conveyor belts are prepared for unloading materials from the vehicle. Materials are checked against the purchase order and shipment documentation to ensure accuracy in quantity and quality.

Outbound: Forklifts, pallet jacks, or conveyor belts are used to load the vehicle. The load is verified against the shipment order to ensure accuracy and completeness. During loading, the placement of the shipment within the vehicle or container is carefully planned to ensure it is properly balanced and there is no risk of damage during transportation.

5. Quality Inspection: A quality control team inspects the materials for any damage or discrepancies.

Inbound: Samples may be taken for further testing. Inspection results are documented, and any issues are reported immediately.

6. Weighbridge Check-Out:

Inbound: After unloading, the vehicle returns to the weighbridge for a final weighing to record the tare weight (vehicle weight without the load). This ensures the weight of the unloaded materials is accurately recorded. The net weight of the received materials is calculated by subtracting the tare weight from the initial gross weight. The recorded weight is documented and linked to the vehicle and shipment details.

Outbound: After loading, the vehicle returns to the weighbridge for a final weighing to record the gross weight. The net weight of the loaded materials is calculated by subtracting the tare weight from the gross weight. This step ensures accuracy in shipment weight for billing and regulatory compliance. The recorded weight is documented and linked to the vehicle and shipment details.

7. Material Handling and Storage: Materials are tagged and labeled for easy identification and traceability. They are then transported to designated storage areas using material handling equipment and organized systematically in the warehouse for efficient retrieval. The allocation of yard space for different types of goods is determined based on demand, storage requirements, and turnaround time.

8. Inventory Management: The inventory management system is updated with the newly received materials. Inventory levels are monitored to ensure optimal stock levels are maintained. A yard management system enables real-time tracking of inventory, vehicles, and personnel, facilitating communication between different departments and stakeholders.

9. Order Processing and Picking:

Outbound: Customer orders are confirmed, and picking lists are generated. Materials or finished goods are picked from the storage areas based on the picking lists.

10. Preparation for Loading:

Outbound: Items are packaged securely to prevent damage during transit. Packages are labeled with relevant information, including destination, handling instructions, and barcodes for tracking.

11. Documentation and Compliance: Required shipping documents, such as the bill of lading, packing list, and export/import documents (if applicable), are prepared and handed to the driver. Compliance with all relevant regulations and safety standards, including those related to hazardous materials, security, and environmental protection, is ensured.

12. Final Inspection and Sealing:

Outbound: A final inspection ensures the load is secure and complies with safety standards. The vehicle is sealed with tamper-proof seals to ensure the shipment’s integrity during transit.

13. Exit and Departure: The vehicle is cleared by security and allowed to exit the plant. Yard operations are monitored and managed to ensure that goods and vehicles move smoothly through the facility, promptly addressing any issues or delays.

By integrating these comprehensive and coordinated processes for inbound and outbound shipments, manufacturing plants can optimize their in-plant logistics, enhancing efficiency, reducing costs, and improving overall supply chain performance.

Key challenges of poor in-plant logistics management

India’s logistics cost per GDP is 13%, the blame for which is mostly borne by the poor road infrastructure or the unique geographical challenges of the country. However, the pandemic revealed deeper problems in the overall logistics setup where transportation on the road was not the sole culprit. Operational bottlenecks inside warehouses or manufacturing plants greatly impacted overall supply chain logistics performance

• Delays and congestion: Poor management and truck scheduling result in delays at multiple points, from gate entry and vehicle registration to loading and unloading docks. This leads to congestion and longer vehicle turnaround times. A lack of synchronization in yard processes causes bottlenecks, misallocation of resources, and excessive wait times, especially during peak periods.
• Inventory management issues: Inaccurate weighbridge records and poor handling and storage practices lead to incorrect inventory counts, resulting in overstocking or stockouts. Inefficient yard management exacerbates these issues by failing to allocate yard space optimally and manage vehicle movements effectively. This impacts production continuity and increases carrying costs.
• Quality control compromises: Delays in the quality inspection process can slow down logistics flow or allow substandard materials into production, affecting product quality. Manual processes prone to errors and lack of real-time tracking hinder effective quality control, leading to increased rework and returns.
• Increased costs: Inefficiencies in material handling, storage, and shipment preparation lead to higher labour costs, increased use of material handling equipment, and potential fines for regulatory non-compliance. Extensive demurrage or detention charges due to delays at the shipper’s site further inflate costs. Improving management processes can minimize these charges and provide substantial financial benefits.
• Safety and compliance risks: Inefficient processes create safety hazards, such as improper handling of hazardous materials or unsecured loads. Lack of real-time visibility and manual record-keeping result in compromising compliance with regulatory standards. This can lead to legal and financial repercussions.
• Poor customer satisfaction: Delays and errors in order processing and shipment preparation lead to late deliveries and incorrect orders, negatively impacting customer satisfaction. Human dependency on overall coordination and the inability to view real-time activities exacerbate these issues, damaging the company’s reputation.
• Lack of real-time visibility: The inability to view the actual location of vehicles within the plant stages hampers proactive management of operations. Without real-time tracking, it is challenging to identify and address issues promptly. This results in a reactive approach, increasing inefficiency and confusion in logistics processes.
• Operational bottlenecks: inefficiencies create bottlenecks at various stages, from initial weighing to final loading. Manual processes and poor yard synchronization lead to routing errors and resource misallocation, disrupting the smooth flow of goods and materials.
• Communication breakdowns: Lack of effective communication between departments and stakeholders due to manual data entry and outdated records results in misaligned schedules and uncoordinated efforts. This overall operational chaos affects logistics performance and efficiency.

Why it is important to ensure good in-plant logistics

Investing in efficient in-plant logistics isn’t just about internal efficiency; it’s about propelling your entire supply chain forward and creating a foundation for sustainable business growth. Here’s why it’s essential:

• Enhanced operational flow: Efficient management ensures smooth movement of materials and products through various stages of production, free of any bottlenecks and delays.
• Accurate inventory control: Precise inventory tracking and handling prevents overstocking and stockouts, ensuring material availability for production. This reduces waste, lowers carrying costs, and supports just-in-time manufacturing strategies.
• Improved quality assurance: Carefully handled materials and timely quality inspections minimize the risk of damaged or substandard materials entering the production process, which maintains high product quality and reduces the need for rework and returns.
• Cost savings: Reduced unnecessary movements and handling of materials cut down on labor costs and equipment usage. Additionally, minimizing delays and improving scheduling reduces the likelihood of incurring demurrage and detention charges.
• Safety and Compliance: Strict adherence to safety protocols and regulatory requirements reduces the risk of accidents and non-compliance penalties, maintaining a safe and compliant operation.
• Enhanced customer satisfaction: When shipments are prepared and dispatched on schedule, customers receive their orders on time and in good condition. This reliability strengthens customer relationships and enhances the company’s reputation.
• Real-Time Visibility and Control: Transparency and real-time visibility into the movement of materials and products allow for proactive decision-making and quick response to any issues.
• Strategic Planning and Coordination: Real-time data fetched from optimized in-plant logistics processes allows the logistics teams and other stakeholders to manage operational bottlenecks proactively.

Also read: How Digitalization Reduces Turnaround Time (TAT) In Plants

Optimizing In-Plant Logistics with Actionable Strategies and Technology

Efficient in-plant logistics management is crucial for maximizing efficiency, reducing costs, and enhancing overall supply chain performance. Let’s discuss some of the key strategies to optimize these processes, along with the role technology plays in achieving these goals.

Plan and schedule shipments effectively

Create detailed schedules for inbound and outbound shipments. Coordinate vehicle arrivals and departures to minimize congestion and ensure smooth throughput.

Establish a centralized control tower

Set up a control tower to gain real-time visibility into all logistics activities within the plant. This centralized hub allows for better decision-making and rapid response to issues. Use live stage-wise TAT monitoring on a dashboard to identify and address bottlenecks immediately, optimizing operations and ensuring faster processing and dispatch.

Automate material handling

Implement automation for routine tasks using automated guided vehicles (AGVs) and conveyor systems. This reduces manual handling, minimizes errors, and increases operational speed. Leverage automated weighbridges with RFID and GPS technology to capture tare and gross weights accurately, eliminating manual data entry and reducing fraud.

Integrate departmental communication

Develop integrated systems to ensure seamless communication between production, warehouse, and shipping departments. This reduces miscommunication and enhances coordination and workflow.

Optimize yard and dock management

Deploy a yard management system to enable real-time tracking of inventory, vehicles, and personnel. Optimize yard space allocation and use automated dock scheduling to minimize wait times and congestion. Utilize a digital loading bay supervisor portal to get real-time status updates on loading activities, vehicle allocation, and dispatch scheduling, reducing vehicle waiting times and ensuring timely dispatch.

Implement real-time inventory tracking

Adopt accurate, real-time inventory management systems to prevent stockouts and overstocking. Use robust processes for cycle counting, demand forecasting, and replenishment management.

Enforce safety and compliance protocols

Implement and enforce safety protocols, including proper training for employees, clear signage, and the use of personal protective equipment (PPE). Maintain regulatory compliance through automated checks and digital workflows for vehicle and driver compliance management.

Utilize data analytics for continuous improvement

Leverage data analytics to identify inefficiencies and areas for improvement. Use comprehensive analytics dashboards to monitor performance metrics and trends, enabling stakeholders to make informed decisions for strategic planning and continuous improvement.

Foster a culture of continuous improvement

Regularly review and optimize logistics processes. Implement feedback mechanisms and performance metrics to address inefficiencies promptly and drive continuous improvement.

Leveraging Technology in In-Plant Logistics

Deploy real-time visibility tools

Use technology to achieve real-time visibility into the movement of materials and vehicles. Implement live stage-wise TAT monitoring and digital loading bay supervisor portals to maintain proactive management and swift issue resolution.

Implement automation and robotics

Adopt automated systems like AGVs and conveyor belts to streamline material handling and transportation. Integrate automated weighbridges to capture weights accurately and reduce manual intervention.

Integrate IoT and sensor technology

Utilize IoT devices and sensors for real-time monitoring of equipment and inventory. Support predictive maintenance and reduce downtime.

Utilize advanced planning systems

Employ AI and machine learning algorithms for dispatch planning, route planning, and load optimization. Ensure efficient resource use and timely execution of logistics activities with automated vehicle and driver compliance management.

Adopt comprehensive software solutions

Implement integrated plant logistic solutions like TMS or WMS that cover all logistics processes, from inventory management to shipment tracking. Automate document generation and ensure seamless integration with logistics operations.

Harness data analytics and business intelligence

Use data analytics tools to gain detailed insights into logistics operations. Analyze data-backed actionable insights on comprehensive analytics dashboards to identify inefficiencies, optimize processes, and make informed strategic decisions.

By implementing these strategies and leveraging advanced technology, manufacturing plants can optimize their in-plant logistics processes, leading to enhanced efficiency, reduced costs, and improved overall supply chain performance.