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News Article

Making Efficient Logistics Operations a Reality

By Alejandro Enríquez | Fri, 11/27/2020 - 16:42

Efficiency in logistics requires a well-defined strategy to avoid the most common bottlenecks found in operations. Industry experts CONALOG, Grupo TM, and GED met to discuss opportunity areas in logistics while exploring common approaches that include fuel efficiency, routing, and technology.

"Main bottlenecks in logistics are found in storage and distribution, workforce, and time. There must be a balance between managing space to have enough stock while providing quality service. The number of doors we have at distribution centers will also impact our efficiency," said Gustavo Equihua, President of CONALOG, an association that gathers major logistics executives in the country. "Bottlenecks found in workforce involve not only the available workforce but skills as turnover rates remain a challenge. We need to ensure that there are processes that help newcomers to accelerate their learning curve," said Equihua.

Addressing security concerns is also an important element to assure efficiency. "We need to perform risk analysis on the products we are transporting and think about their value in informal or secondary markets. We are exposed to situations that are often out of control," said Alejandro López, President of Grupo TM, a company with logistics operations throughout North America with a portfolio that covers different industries including retail and automotive. López mentioned that best practices must consider specialized insurance policies, as well as technological features.

Equihua agreed on the importance of security, saying a "preventive approach is the best approach" to tackle security concerns. Meanwhile, Eric Villagómez, CEO of Green Energy Development (GED), said that having a pool of certified suppliers and customers could help in the risk assessment processes.

To implement comprehensive technology solutions, companies must explore different financial schemes. "There are traditional financial schemes. Self-financing is also another option but this requires strong financial capabilities. Companies should also take advantage of suppliers' financing schemes, which allow win-win relationships that can take into account sharing profits," said Equihua.

GED, one of the most relevant players in fuel management solutions, explained the advantages of having flexible financial schemes. "Zero-investment is one of our most attractive solutions for our customers, this includes ramping up self-consumption tank and fuel management solutions. ROI can be seen between eight to 12 months. Preventing fuel thefts, for instance, can represent savings of 10 percent on average," said Villagómez. López added that it is key to have a clear vision of where technology is needed the most. “When projects have a purpose, access to capital is easier.”

Experts agree that fuel management solutions are essential for more efficient operations. “Trusting that the fuel provider will supply on time with the right amount saves time and money. Trusting our workforce within and outside the company also saves time and money,” concluded Villagómez.

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Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst