What does production logistics mean?

Production logistics as a business discipline is a part of the logistics chain. Alternatively, it is also known under the synonyms “internal logistics” or “intralogistics”; sometimes it is referred to as “manufacturing logistics”. Production logistics is located between procurement and distribution logistics. There are also overlaps with these areas.

Production logistics comprises the planning, management and control of internal storage, transport and handling processes to ensure the flow of materials within the company. If there are several production sites, production logistics also covers inter-company logistics within the entire company.

Production logistics manages and controls all goods inventories and movements within manufacturing sites to ensure the optimal flow of materials throughout the value chain: from raw material storage to production and finished product storage.

There are two main aspects to this area of production and logistics:

• Warehousing: planning, control, monitoring and execution.
• Internal transport: stored goods, materials, articles, raw materials, auxiliary materials, operating materials, production parts and semi-finished and finished products.

The aim is to keep inventories low in incoming and outgoing goods. This reduces storage costs, accelerates the rate of turnover, increases the flexibility of the value chain and promotes optimization and savings in the production area.

Due to its broad objectives, the tasks of “productions logistics” are extremely diverse. These include:

• Selecting internal production locations
• Concluding contracts with suppliers
• Determining material requirements
• Establishing and expanding production segments
• Planning production logistics based on customer requirements and capacities
• Control internal transports
• Control of transports between different production sites, if needs be
• Plan inventories, e.g. to compensate for seasonal fluctuations

 
This gives production logistics a great deal of scope within the company and makes it crucially important for the company’s success and competitive advantages.