Logistics in the supply chain is the planning and execution of efficient transportation and storage of goods from origin to consumption, aiming to meet customer requirements in a timely and cost-effective manner.
It comprises five major components: planning, storage, warehousing, materials handling, packaging, inventory control, transportation, and information and control.
The overall supply chain is a network of businesses and organizations working in a sequence of processes, including logistics, to produce and distribute goods. In this blog, you will get to know its meaning, roles, and different types.
What Is the Meaning of Logistics?
Logistics is the organization and implementation of complex operations. It involves resource organization, storage, and distribution. Its origins can be traced back to the military, where it involved moving people, materials, inventory, and equipment from one location to another. Logistics problems can negatively impact a company’s financial performance.
Also Read, Difference between direct and indirect freight loading
The Role of Logistics
Order Processing
Order processing is essential for the accurate and timely delivery of customer orders, involving teams in distribution centers or warehouses. It involves picking, packaging, and delivering goods to carriers, with a workflow consisting of five steps.
Inventory Management
Inventory management logistics is crucial for efficient goods flow and customer satisfaction. It tracks inventory from purchase to sale, identifying trends and ensuring sufficient stock. Maintaining a competitive advantage and responding to changing market circumstances are two of the primary goals of logistics inventory management.
Warehousing
Warehouse logistics involves the physical flow of products during receiving and shipping, encompassing organization, movement, and management. It includes pest control, damaged goods handling, safety policies, human resources, and customer returns. It is essential for supply management logistics and focuses on warehouse organization, receiving, accounting, and stock placement.
Also Read, How Do Brokers Find Direct Shippers?
Packaging
Packaging is crucial for the safety and quality of goods transported and delivered to customers. It covers individual units of an item, protects the environment, and is essential for production, use, transport, storage, and marketing. Equipment for shipping includes things like boxes, tape, and seals. The packaging process begins with the design of the packaging and forms a holistic system, ensuring the safety and quality of the final product.
Cargo Handling
Cargo handling is the process of loading, unloading, transporting, warehousing, picking, and sorting cargo logistics internationally in warehouses and logistics centers. It involves six main tasks: assortment, inventory, transportation, storage, sorting, and picking. The freight cargo industry’s output and quality are profoundly affected by these activities. Logistical expenses rise as a direct result of freight handling losses. Our services provide consulting, planning, technical advice, and operational implementation for all tasks from a single source.
Transportation
The transportation industry is a crucial part of logistics, focusing on the movement of goods through ground, ocean, and air conveyances. Efficient transportation is crucial for the survival of distribution services, ensuring low investment and the safety of goods. Transportation services can be divided into infrastructure, vehicles, and operations, allowing communication and trade between parties. The most cost-effective way to ship and when it will arrive depend on how fast and efficient the shipping is.
Different Types of Logistics
Supply Chain Management
Supply chain management (SCM) is a high-performance business model that links major business processes within and across companies, driving competitive advantage. SCM involves the storage and shipping of goods and services across the supply chain, starting with raw materials and continuing through manufacturing and distribution. It encompasses activities like marketing, product development, finance, and customer service. SCM encompasses traditional logistics, marketing, new product development, finance, and customer service to ensure a seamless and efficient delivery of products to market.
Reverse Logistics
Reverse logistics is a supply chain management process that involves returning goods from customers to sellers or manufacturers, starting at the end consumer and moving through the chain to the distributor or manufacturer. It is crucial for businesses to offer returns to customers, helping them recover their money after the product’s life cycle has ended. This process can involve refurbishment, disposal, or resale of the product.
Freight Forwarder
Freight forwarding is the planning and coordination of commodity movement across international borders, involving tasks like warehouse planning, freight cargo insurance, and customs brokerage. CIFFA recognized its importance in 1948, ensuring efficient and timely goods flow. Freight forwarders act as intermediaries between transportation companies and businesses, managing the entire process from storage to customs clearance. They work with road, rail, water, and air shipping companies.
Air Cargo
Air cargo, also known as air freight, is the transportation of goods through an air carrier, offering high-speed, time-sensitive shipping to any location worldwide. It is a valuable and reliable mode of transportation, allowing businesses to meet customer demands and establish credibility. Air freight logistics are essential for small and mid-sized businesses, as they allow them to participate in international trade quickly and efficiently. Airport security ensures the highest level of security for all cargo entering and exiting the country.
Final Wording
Overall, logistics manages the supply chain for a company. The process needs to be handled well. The company’s supply chain should be effective and efficient.
Success depends on improving the customer experience, despite the difficulty. Improving processes can help. Making products better is important. Filling orders faster is also necessary. Logisticians boost sales and increase business profits with smart, data-based plans.
Also Read, Best 9 Ways to Improve the Procurement Efficiency in Business
FAQs
What are the seven principles of logistics?
The 7 principles of logistics in supply chain involve delivering the right product to the right customer in the right quantity, condition, place, time, and cost at the right place, time, and cost.
What are the three main activities of logistics systems?
Logistics systems consist of four main activities: purchasing, inventory, warehousing, and transportation. Supply chain management involves firms collaborating to leverage strategic positioning and improve efficiency.
What are the four key processes in logistics?
Logistics systems involve three main activities: suppliers, manufacturers, distributed fulfillment centers, warehouses, and shipping.
