What is Logistics?Logistics is used more broadly to refer to the process of coordinating and moving resources – people, materials, inventory, and equipment – from one location to storage at the desired destination. The term logistics originated in the military, referring to the movement of equipment and supplies to troops in the field. Show
Logistics vs. Supply Chain ManagementLogistics and supply chain management are terms that are often used interchangeably, but they actually refer to two aspects of the process. Logistics refers to what happens within one company, including the purchase and delivery of raw materials, packaging, shipment, and transportation of goods to distributors, for example. While supply chain management refers to a larger network of outside organizations that work together to deliver products to customers, including vendors, transportation providers, call centers, warehouse providers, and others. Logistics ComponentsThe management of logistics can involve some or all of the following business functions, including:
Why Logistics is ImportantAlthough many small businesses focus on the design and production of their products and services to best meet customer needs, if those products cannot reach customers, the business will fail. That’s the major role that logistics plays. But logistics also impacts other aspects of the business, too. The more efficiently raw materials can be purchased, transported, and stored until used, the more profitable the business can be. Coordinating resources to allow for timely delivery and use of materials can make or break a company. And on the customer side, if products cannot be produced and shipped in a timely manner, customer satisfaction can decline, also negatively impacting a company’s profitability and long-term viability. Global supply chains are essential to worldwide commerce, and the underlying logistics involved in sending, receiving, moving, and storing goods is central to that success. It’s no surprise that the terms “supply chain” and “logistics” have become conflated and are often confused with each other. Despite some individuals and organizations using the words interchangeably, there are many important differences between the functions, capabilities, inputs, and outputs of each. The quickest distinction to make is that supply chains are responsible for the overall sourcing, processing, and delivery of goods to the end customer, while logistics specifically focuses on moving and storing goods between different supply chain organizations. We’ll break everything down and explain the key differences between logistics and the supply chain. Logistics is a Subsection of the Supply ChainThe Council of Supply Chain Management Professionals states that logistics is, “part of the supply chain process that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer’s requirements.” That’s a bit of a mouthful, so let’s break it down. Logistics is a Part of the End-to-End Supply Chain ProcessThe most important distinction is that logistics is a distinct part of the supply chain and is essential to good supply chain performance. A supply chain may have many different types of logistics and logistics companies within it, all dedicated to helping the supply chain run smoothly. However, each logistics operation is only responsible for a unique and self-contained part of the supply chain. Logistics Plans, Implements, and ControlsBecause logistics providers are responsible for their part of the supply chain, they will:
Logistics Moves Goods from Place to PlaceGood logistics management is all about efficient transport and storage. Logistics providers use a variety of land, air, and ocean assets to move goods quickly and efficiently. They take advantage of containerization for moving goods between types of transportation, known as “intermodal” transport. Logistics Stores Goods Until They Are Needed ElsewhereOnce goods have reached their destination, logistics providers will store them in warehouses or other facilities. They will keep goods until they are needed further down the supply chain, whether that’s another supply chain organization or for delivery to an end customer. Logistics Distributes Products to the End CustomerSome logistics businesses specialize in distribution—delivering goods to the final customer, typically known as “Last Mile Delivery.” Types of Logistics OrganizationsEssentially, if goods are being transported or stored, that’s a logistics process. There are many types of logistics businesses, including:
In short, logistics is a limited, distinct part of a larger, collaborative supply chain network. Supply Chains are the Overarching Framework for Sourcing, Manufacturing and Supplying ProductsNow that we understand what logistics is, it’s worth expanding our scope and looking at what the overall supply chain actually represents. The supply chain represents the connections and collaborations between suppliers, manufacturers, logistics businesses, wholesalers, retailers and end customers. The supply chain process starts when an organization gets an order for a product or service, and finishes when that product or service is successfully delivered to the end customer. Supply chain management is a function that oversees and directs the manufacture, transportation and delivery of goods and services between their origin and their final destination. Supply Chain Management Works Across Multiple OrganizationsThe overall supply chain brings together multiple partners to source, manufacture, transport, store, supply and sell goods:
Supply Chain Management Can Also be Responsible for Other AreasSupply chain management often controls other aspects of the order, inventory and supply chain process.
Ultimately, a strong supply chain provides a competitive advantage to every organization that’s involved. While the overall supply chain is responsible for marketplace success and revenues, logistics plays a critical, central role in ensuring raw materials, parts and finished products flow smoothly through the global supply chain. Blume Logistics creates a robust network for logistics tendering, tracking, event capture, POD verification and settlement initiation. By connecting a global ecosystem of multi-modal carriers to manage every move, Blume Logistics unites carriers—from ocean to rail to long haul—with first- and last-mile drayage for real-time event and cost tracking. What is not included in logistics?Any activities such as movement of ordering from one table to others, quoting pricing decision for movement of one product to the next terminal, booking orders, preparation of documentation, MIS for transportation record supply system for supplying materials will be considered not a logistics even they are indirectly ...
What are the 4 types of logistics?Logistics can be split into five types by field: procurement logistics, production logistics, sales logistics, recovery logistics, and recycling logistics.
What are the 4 major logistics functions?How Logistics Functions ?. Order processing.. Inventory Management & Control.. Warehousing.. Transportation.. Logistical Packaging.. Monitoring.. Is inventory a part of logistics?Involved as part of the supply chain, logistics inventory management includes various aspects as control and supervision of purchases from the customers, maintenance of stock storage, command on the product sale, and order fulfillment.
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