Logistics is widely known as the process of coordinating and moving resources such as equipment, food, liquids, inventory, materials and people from one location to the storage of the desired destination. It was originally a military-based term that was used to describe how the military force obtained, stored and moved equipment and supplies. In the supply chain and business sense, logistics is the management of the flow of things between the point of origin and consumption, so to fulfil the requirements of consumers or corporations. The logistics of the aforementioned resources involve the integration of production, packaging, warehousing, transportation, security, materials handling and information flow.
The different categories of logistics are:
- Third Party Logistics (3PL)
- Fourth Party Logistics (4PL)
- Inbound Logistics
- Outbound Logistics
- Reverse Logistics
- Green Logistics
- Construction Logistics
- Digital Logistics
- Military Logistics
Logistics Management
Logistics management focuses on the efficiency and effective management of daily activities concerning the production of the company’s finished goods and services. This type of management forms part of supply chain management and plans, implements and controls the efficient, effective forward, and reverse flow and storage of goods. This process, as mentioned, happens between the point of origin and the point of consumption in order to meet requirements set by customers. The main aim of logistics management is to allocate the right amount of a resource or input at the right time. It is also ensuring that it gets to the set location in a proper condition while delivering it to the correct internal or external customer.
Effective supply chain and logistical procedures are important as they reduce costs and maintain & increase productivity. Substandard logistics on the other hand lead to late deliveries, failure to meet consumer requirements and in the end, ultimately causing the business to crumble. Consumers consistently demand better service, and this has prompted supply chain role players to aim to provide fast, accurate and quality service. Logistics management is responsible for making certain that this aim materializes, and that customer satisfaction is established.
Logistics management is also crucial for creating visibility into any company’s supply chain. As historical data is analyzed and the movement of goods is tracked in real-time by advanced transportation management systems (TMS), logistics uses this information for process optimization and the avoidance of potential disruptions.
Additionally, supply chain visibility creates ground for major cost savings in operations. Proper logistics management procedures increase revenue and give businesses control over inbound freight; allow for the organization of the reverse flow of goods; keep inventory at optimal levels; and utilize freight moves on the proper transportation modes. These factors all contribute to cutting costs.