Logistics— I am sure it’s not your first time hearing this word. But, how much do you know about logistics and logistics management?
You don’t have to sit in bafflement to answer this question. Just keep reading the blog. This blog will cover all your logistics and shipment-related doubts.
Let’s see!
Logistics is defined as the process of linking and transferring resources like equipment, foods, items, liquids, and people from one location of storage to the desired destination. Logistics originated as a military term, it was used in the military to explain how the military forces stored, obtained, and moved equipment and supplies to different locations.
However, from the business and supply chain point of view, logistics can be understood as the management of the flow of items between the point of origin and consumption, to fulfill the requirements of the users or enterprises.
Logistics can be differentiated into the following categories:
- Third-Party logistics (3PL)
- Fourth-Party Logistics (4PL)
- Inbound logistics
- Outbound logistics
- Reverse logistics
- Green logistics
- Construction logistics
- Digital Logistics
- Military logistics
Logistics Functions
The two major functions of logistics are transportation and warehouse management. Logistics management focuses on planning, evaluating, and executing the utilization of vehicles to shift goods between warehouses, retail points, and customers.
Transportation is an intermodal type and comprehends ocean, air, rail, and roads. As it is foreseeable, transportation management is a complex process as it comprises planning, route optimizing, shipment loads, order management, auditing, and payment.
Warehouse management, aka warehousing, is also included in logistic functions and is responsible for inventory regulation and order accomplishments. It also includes managing the warehouse framework, where orders for items are received, processed, and shipped to the consumer.
Apart from this, customs management (global trade management) is also considered an integral part of logistics to show abidance with government protocols for the goods that have to be delivered across national borders or enter shipping ports.
What Do You Understand By Logistics Management
Logistics management aims to improve the efficiency and effectiveness of management regarding the production of finished goods and services.
Logistic management includes supply chain management taking part and planning to control efficiently and effectively the forward and reverse flow of supplies.
Logistics management focuses to allot the accurate amount of resources at the correct time.
But, why exactly supply chain and logistic management are important?
Logistical procedures and supply chain management are important because they reduce costs and improve overall productivity.
Customers always demand better services, and to provide the best service to the end-users, the supply chain tosses the players to provide fast, accurate, and quality service. With logistics management, a few things become certain, such as materialization and customer satisfaction.
Logistic management is responsible for creating visibility in the company’s supply chain. Because through proper logistical management, the data is analyzed and the movements of the goods are tracked in real-time with the help of a futuristic transportation management system (TMS).
A proper logistics management procedure will let you generate revenue and provide you with business control over the inbound freight. All these factors will contribute to cutting costs.
Logistics and Supply Chain Management: Two Different Things
As you all know by now, we are aware of logistics management. Moreover, logistics management is an integral part of supply chain management. Although the two terms seem similar and so are often used interchangeably, both are different.
Logistics puts emphasis on moving products and materials as efficiently and quickly as possible, and supply chain management includes a broader range of supply chain activities and supply chain execution.
Types of Logistics Management
- Supply
- Distribution
- Production
- Reverse
Supply
Logistics supply management includes planning and coordination of materials required in a specific location and at a specific time to offer short to production. The supply management must have transportation of the materials and storage along with plans instead of managing the level of supply at different stages so that the flow of material is aligned with the requirements.
Distribution
It is about evaluating how the supplied and stored material is deployed to the location where it has to be delivered. The distribution logistics include delivering the materials, i.e., loading, unloading, and transportation, tracking of freight, and accountability of use.
Production
Production logistics manages the stages of combining supplies into a product. This encompasses coordination in manufacturing or arranging processes for applications like military production. The production logistics include the staging of items to coordinate with all the logistics steps.
Reverse
Reverse logistics handles the recall of goods and supplies from the goods assembly process.
The Importance of Logistics
The on-time delivery of packages has always been and will always be an important part of the supply chain. And today, it has become more like a critical mission due to omnichannel commerce offering same-day home or retail delivery of customized products that are ordered through smartphones and have become more common.
Due to this, suppliers, producers, distributors, and retailers have had to refine their logistic operations to meet the end-users claims.
We at NitroXpress offer several logistics and SCM-related services. Reach out to us for a great logistics experience.