Logistics

Reviewed by Anjaneyulu | Updated on Aug 27, 2020

Introduction

In general, logistics is the comprehensive planning and execution of a complex operation. In a general business context, logistics is handling the flow of items between the point of origin and point of consumption to satisfy consumer or corporate requirements.

The logistics-managed resources that include tangible products such as materials, equipment and supplies as well as food and other consumer goods. Physical item logistics usually involves the integration of information flow, managing products, production, packaging, distribution, transport, warehousing, and often security.

Importance

Although many small businesses concentrate on developing and manufacturing their products and services to serve customer needs better, the business will fail if those products cannot meet consumers. That is the most significant role logistics plays, and the logistics affect other business aspects too.

Coordinating resources to facilitate a timely delivery and use of materials may make or break an enterprise. And on the customer side, if goods cannot be produced and delivered on time, customer satisfaction can decline; thus, hurting the profitability and long-term viability of a company.

Components

Logistics management may include some or all of the following business functions:

  • Inbound Transportation
  • Outbound Transportation
  • Fleet Management
  • Warehousing
  • Materials Management
  • Order Fulfilment
  • Inventory Management
  • Planning Requirements

Role of Logistics

Logistics does have several roles. The most well-known position of logistics is sales logistics, i.e. to transfer products from the producer to the consumer. In addition to the sales logistics, it can also be divided into four other positions depending on the sector—logistics in procurement, logistics in development, logistics in recovery, and logistics in recycling.

The functions of logistics include transport/delivery, storage, packing, freight handling, inventory management, and information processing. Many of these processes have been put in place to deliver goods to the customer efficiently and on-time from the production site or plant.