Multi-category and multi-technology logistics


Physical distribution, also known as logistics, is the set of activities necessary to transfer goods from producers to final consumers.

The main functions of physical distribution are: deliveries management, inventory management (inventory management), storage (warehousing), material handling (materials handling) and transportation.

Logistics also deals with the effects that such activities, through the speed and reliability of the delivery of goods, can have on the customer in terms of purchase satisfaction.

The main objective of physical distribution is therefore the search for an optimal balance between the quality of the service provided to the greatest number of customers and the costs associated with the various levels of quality.

Just to satisfy this fundamental requirement, the design of the network (warehouses and distribution) is the distinctive element of a successful logistics.

The variability and volatility of the business, especially in recent years, necessarily requires that the logistics networks be constantly updated.

In a complex environment, characterized by multichannel and different technologies designed to support the different business categories, it is necessary to provide an adequate organization: efficient and at the same time capable of supervising all the different aspects of the function.



Typically the organization is the result of an evolutionary process that is strongly influenced by the origins from which it developed.

Often we are faced with "vertical" organizations that originate from the aggregation of different Businesses, once independent companies, with different Route to Market and above all different technologies (storage and distribution temperatures).

At best, there is a Corporate function, which was created with the aim of capturing synergies at the Distributive Network level, and which generates integration projects that in turn call into question the organization that increasingly assumes transversal characteristics .

On the other hand, the sudden changes in business scenarios tend to undermine the vertical organization which, weakening, to follow the logic of cost reduction, can become unsustainable in the medium term.


Future organizational vision

Following a logic of moving from a vertical to a horizontal management, the logistic function can be structured with extended process skills, where possible, to all the business / categories.

Imagining the world of logistics divided into two functional areas (Warehouse and Transport) and one of support (Development, Procurement, Administration / Costs) the organization could have the following characteristics:

1) Support
 a) Development
     i) Innovation
     ii) Projectuality
    iii) Process Optimization
 b) Logistic procurement
 c) Logistics costing (warehouses, transport, pallets, ...)

2) Warehouses
 a) Factory DC
 b) Single producer warehouses (outsourced management but only Nestlè product)
 c) 3PL warehouses

3) Distribution
 a) Primary Transport
 b) Export Transportation to third parties
 c) Last Mile Logistics
     i) Transhipment Point Management / Second Level Warehouses
    ii) Distribution Performance Monitoring
   iii) Compliance check

The establishment of the Business Logistics Partner can be useful to adequately support the businesses and represent the logistic requests / opportunities.
This role has the primary task of connecting the logistics processes in an E2E logic by exploiting the principles, rules and procedures deriving from a constant alignment inherent in the function governance model.

multiproducer platforms

The current economic situation puts the logistics in the foreground for the opportunity to create efficiencies in terms of costs of transport.
The theme of the platformer is of great interest and is a model to strive for the advantages it offers in particular as regards the level of service, the decrease of the costs and sustainability respect to the environment.

There are concrete experiences of producer and multi warehouses have been implemented by logistics operators are able to manage the service of handling and transport of producers with similar product categories.

The element value is the ability to treat the pool of producers as a single entity in terms of sorting and delivery.

Recent research by authoritative organizations are referred to as simple and immediate collaborative processes on the logistics component can guarantee a recovery in terms of efficiency that is close to 7% in consumer prices.

The new parameters help to evaluate solutions that have trade-offs between different assessment factors

• Collaborative replenishment city: reduction of CO2 emissions and traffic congestion, risk of increase in material handling

• Collaborative warehouse and distribution: reducing the overall cost of ownership (green buildings) at a cost of a possible complication of the infrastructure

• Returns Neighbourhood: reduction of CO2 emissions

• Reduced lead time: simplify storage infrastructure by removing unnecessary reduction inventory costs

• Reduce CO2 emissions through on-site production: high taxation to CO2 emissions from transport can push agents to move production facilities over the long term

• New KPI on transport costs, handling costs, mileage, CO2 emissions and lead time can be easily improved if you are using an integrated model

cross docking

The term Cross-docking is expressly refers to a method of distribution through which the flow of goods through an unbroken chain from the initial point of storage to the point of destination without the benefit of storage spaces in between.

In practice this means that the finished products leave the warehouses of manufacturers already established for single destination without undergoing any intermediate process of storage and ventilation is therefore evident that this process only applies to flows that require delivery through regional warehouses or consolidation.

The positive effects that this process generates the Distributor are related to different areas:

- Working capital (decrease / reset stock)
- Reduction in physical space inventory (lower costs of storage / handling)
- Reduction error handling due to less need to move the product
- Best warranty in terms of traceability

Aspects that impact the counterparty (Producer) are summarized as follows:

- Increased cost of handling (typically related to the increased Picking)
- Decreased saturation in transport (with economic and environmental impacts)
- Increased frequency of deliveries
- Increased chance of damage to the goods (due to less stable pallets)

From the point of view of consumers:

- The risk of stock-out increases (less than infallible Planning systems)

It is quite clear that the decision to move towards a model of this type must take into account the benefits and costs that generates the entire chain.

One way to mitigate the impacts to the Producer (which will cover all expenses) is to share the benefits through a revision of the "Discounts Logistics".
In conclusion a project related to the implementation of cross-docking must be very carefully considered with utmost attention to the components:

- Costs / Saving
- On Shelf Availability (Out Of Stock)
- Environmental impact (CO2 emissions)



A system of traceability of the materials consists of a set of organizational procedures, instruments of physical input / output data, and a kit suitable software to manage and coordinate information acquired in such a way as to determine the sequence of displacements which has been subject a certain set of material.

The level of detail and precision of the traceability system varies depending on the purpose which it is intended to obtain, that affect many of the parameters characterizing the system.

Among these parameters, the most important are:

• materials to be traced, or the list of products that must be the object of observation for the traceability system;

• the granularity of tracking, namely the specification of the elements to be traced, that is, the definition of the groupings of material that must be tracked, for example packs, or packages, or pallets;

• rentals tracking, ie those who produce, give, receive or process elements to be traced, the set of locations tracking, with the characteristics of each location, determine the area of ??traceability, ie the boundaries to ' interior of which the system is active and competent, and outside of which the system loses its effectiveness.

The main purpose of the traceability system

The necessity of having a traceability system stems from the ability to invoke material proved unsuitable for food use.

Of course, the system must allow the call - as defined below recall - all materials charged, but shall not extend to materials not affected by the problem; task tracking system is precisely to make such a distinction, which may be more or less accurate depending on the organization of the system.

The granularity tracking

The choice of granularity tracking is the result of a compromise choice given to balancing costs for the survey of traceability and recall costs of materials, taking into account also the techniques of identification of materials subject to recall.

In the case in which the choice was to adopt a granularity of tracking at the level of single pallet will have to be provided for the following consequences:

• each pallet must be marked by a marker able to uniquely identify the pallet;

• it is assumed that every single pallet, at the time of its initial production, is composed of a single material code, and all equivalent for the purposes of recall, in other words the materials belonging to that pallet, if unfit for use, must all be recalled without exception;

• all relevant transactions for the traceability system must indicate, in addition to the material code (expiration date, lot number) identification of the pallet.
Leases tracking

The traceability system shall provide for the monitoring of the following types of locations tracking:

• factories;
• the copackers;
• distribution centers;
• conveyors with deposit;
• dealers;
• end customers recipients of goods sent directly from the distribution centers, and conveyor with storage, or factories.

Each operation relevant to the traceability system shall indicate, among other necessary data, even the identification codes of the locations involved in the transaction tracking.

project charter

According to a famous historical phrase "The beginning is the most important part of a job." On 30 April 1492, King Ferdinand and Queen Isabella of Castile released a paper which provided the ships of Christopher Columbus and the men necessary to the discovery and acquisition of islands and a continent.

This document was the realization of the dream of Columbus, after many years of hard work he was able to convince the monarchy of the benefits of the project, and it sponsored its effort to necessary resources. Moreover, in view of the potential dangers, there was an agreement for the promotion of Columbus to admiral and governor in the event of conquests. This historical 'project charter' ended with the discovery of America, and with considerable wealth to the royal house, to Christopher Columbus and Spain.

Unfortunately, this example of a successful project is the exception, not the norm.

If - as regards the field of information technology - it is based on many research studies, or if you take into consideration a number of projects that have not gone well, we can assume that many of them do not reach the goals desired because of a variety of reasons such as a definition inadequate, insufficient planning, lack of determination, etc., and this entails for organizations losses of money, of customers and of time.

The research of the last twenty years in the field of information technology and the techniques for project management have shown that the support of top management is the most critical success factor in a project. Organizations where managers more effectively supported and supported a project showed greater credibility with regard to obtaining positive results and to overcome problems during the life cycle of the project.

In addition, projects without adequate sponsorship - yet completed - have product features so poor that most users do not believe they can be counted among the successful projects end.

This preface describes how the project charter is a better solution, consolidated experience, can increase the chances of success of the project through better communication, well-defined roles, and a conscious and firm adhesion of contact key before starting the operation. The project charter is the document that you comply with all individuals and all groups interested in the project.
What is 'Project Charter'
The charter of the project can be defined as the document, signed by key individuals, formally authorizes the creation of a project, ensuring the involvement of management and ensures the availability of resources needed to bring the project to fruition.

The charter of the project means that roles and responsibilities are clearly understood by all those who are interested in the project, before it takes startup. In addition to this is a formal agreement whereby all the key individuals may share a common vision regarding why the project is put into operation, the time interval during which it must be developed, products of the project, focus of the project and responsibilities. The charter of the project takes into account:

• Roles, responsibilities and activities.
• A framework for the management of the project.
• Ability of management to the project.
• Referrals and key partners.
• Evaluation criteria to be used at the end of the project to judge the outcome.

The project charter provides a consolidated overview and high-level project. It is one of the first steps in project planning, but this does not have to be confused with other types of documents to support the investment decision, as this should already have been taken before the project charter.

A project charter is not even a 'Project Plan'. The project plan is more detailed, and is developed only after the approval of the charter. The paper constitutive project constitutes a summary of all the documents specific planning and products which are studied at the beginning of the project, among which we can mention:

• Planning for the focus of the project.
• Scheduling.
• sequencing of activities.
• Planning of resources to be allocated to the activities.
• Estimation of task durations.
• Scheduling of project phases.
• Estimation of costs involved.
• Estimation of expected cash disbursements.
• Planning for quality control.

The project charter is an effective tool for planning high-level used in the very first phase of the project, and a daily communication tool that can be continuously used as a reference, it also serves as a quick reference guide for the direction that a summary about that what the project concerns, because it has been put in place, those who are interested, what are the roles and responsibilities, what are the lead times provided, and what is the general approach to the project. It can also help new members of the project team to familiarize faster.

The charter of the draft standard is never changed during the life cycle of the project. Is created at the beginning, which was approved by key individuals, and signed before any work can be started. Of course, the charter can be updated, but only if all parties involved agree on changes to be made. In any case, it is understood that its primary purpose is the authorization to proceed and the involvement of all relevant figures.
The responsibility for ensuring that the project charter is made and approved in-chief is the project manager.

The development of the charter can not be accomplished only by the project manager, as it is a document which basically outlines an agreement on what should be done and when.

The project sponsor must therefore assume an instrumental role, and enable the project managers to gain a solid understanding of the environment and the choices that led to the decision to undertake the project.

methodological approach

From a general point of view all the project activities can be placed in the general scheme shown in Figure below, which classifies them into five major groups: starting, planning, execution, control and closure.


While starting, controlling and closing have mainly to do with the project management, planning and executing most relevant to the activities necessary to obtain directly the objectives of the project, that is, its product, or the introduction in the company a new integrated management system (in technical jargon: ERP, Enterprise Resource Planning).

In particular, the planning, as well as deal with other aspects equally important in the overall management of the project, lay down in advance:

• What needs to be done,

• by whom,

• when.

Everything is decided at the planning stage - which flows into the summary document called Project Plan - is the guide which will trace the journey of the next run, giving it direction and controllability.

While representing the foundation of the run, the project plan, however, does not make explicit many aspects that concern and affect this phase, including:

what were the principles and concepts that have guided the development of the project plan;

has been interpreted as the global scenario in which the project is intended to develop;

What are the guidelines for the implementation of specific activities, which tools to use to perform the activities better.

strategic projects

Nowadays, there has to operate in a complex environment involving uncertainty, competition and rapid change.

To be competitive you have to be well organized and must have adequate support systems, which can among other things be able to respond quickly to market changes.

In addition to this, due to globalization, that business must be conducted in order to be competitive on a global level, and we can not afford to compete exclusively with local competitors.

Only companies that are on guard and are distinguished from others are able to survive, and in this context it is shown that an integrated management system can be an important tool to gain a competitive advantage.

As a result of this project is to be interpreted as strategic and not merely instrumental, because an ERP - if introduced properly - provides leverage to increase efficiency, and ultimately to achieve the company's goals . And the fact that it is a project of strategic nature means the first and most important effect: the personal involvement of management in the project, as a sponsor and member of the Audit Committee.

organizational impacts

Each ERP system provides a wide range of features to facilitate the implementation of the Eastern business processes more meaningful.

All of this happens in the context of an ideal organizational model developed by the designers of the system to enter the functionality offered by the product as part of a coherent logic.


So far so good, as it would be technically impossible to design a complex system such as an ERP without having any reference point day, and even more so because it is often the case that companies that adopt an ERP appreciate the logic and focus on their internal organization accordingly. This is the case - at least in the face of the most serious-products because the experience of the designers is somewhat broader than that of the company that acquires the product, because in order to reach an abstract model they have taken account of the experience gained in a large number of companies, and these experiences have summarized the most significant ideas, the best ways to work day.

ERP Whatever you choose, it proposes an abstract model of business organization!

However, it remains a fact: the ideal organization proposed ERP remains the ideal, and as far as can be willing to consider and adopt new and interesting ideas there will always be points of divergence between this organization abstract and necessary to run concrete production, sales, purchasing, etc.. the reality in which the company operates.

(A) Only these features may be introduced in the company without organizational impact, or at least with an impact planned
(B) Functionality offered by the ERP system that are foreign to the corporate present, and that can not be taken
(C) functionality required but not present in the ERP system

At this point it is clear that introducing the company (any company) an ERP system (any ERP system) has an inevitable impact on the organization. What entities could be this impact depends on many factors, but if the project is handled with care can be derived from all the precise choice of strategy, operate according to clear objectives.

There are two extreme approaches to tackle projects of this type.

The first is to be aware of the product, understand the organizational model that it proposes and adapt its organization so that it fully reflects the proposal, in the hope that this will lead to a more rapid use of the product and in some cases even a Streamlining business processes.

The latter requires an additional effort in terms of analysis and implementation to balance the need for change induced by the new system and the development of new functionality to the specific business (not represented in the system).


The simple adoption of an ERP system is not in itself a sufficient condition to ensure that you get the ultimate end for which it was acquired: make it work within the organization, it is accepted and used to the best of its possibilities.

And 'now consolidated experience that the introduction of an ERP system has so a substantial component of the Information Technology (IT), but this must be perfectly aligned and integrated with the organization, business processes and people.

As for the people that experience is gained - also internationally - from the mistakes made in the past, where traditionally the implementation projects of ERP systems divided them into two separate classes: on the one hand the members of the project team, dedicated to engineer "the most efficient and productive" and on the other future users of the system, members of the organization, who would then have to use it, respondents only sporadically and mostly only for matters of technical detail.

An approach of this kind produces a system that does not reflect either the current organization, or its planned development, top-down and unknown users, who will from day to day have to be productive in a strange environment and that this will often be forced to somehow circumvent the system to fit into the usual organizational schemes, but it can meet the needs of every day. And 'This is the best way to undermine the potential of a modern ERP system, full of all the most recent and promising technological opportunities, maybe just adopted to replace the previous system now considered inadequate.

The conceptual breakthrough is needed in recognizing that the appearance of more care is not technological but rather the organization and that the organization is composed of people who work together to shape it properly, and that therefore belongs to knowledge, experiences and the ability of people who need to rely on to set up a system to be successful and lasting, a system perceived as an evolution and not as an imposition.
In a project of ERP implementation is
people in the organization that
determine the quality of the result