Scribd
Upload
35 views

LOGISTICS

ewrywhenfakodowwnos qwjejwnkj dsfuy4unjknas wdjj asjdeaknjqwrhoiuebdcndjsbyur hsdbafgbs hew jl lfui euwhu

Uploaded by

Peachy Cam
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
35 views

LOGISTICS

ewrywhenfakodowwnos qwjejwnkj dsfuy4unjknas wdjj asjdeaknjqwrhoiuebdcndjsbyur hsdbafgbs hew jl lfui euwhu

Uploaded by

Peachy Cam
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 5

What is logistics?

Logistics is the process of planning and executing the efficient transportation and
storage of goods from the point of origin to the point of consumption. The goal of
logistics is to meet customer requirements in a timely, cost-effective manner.

Originally, logistics played the vital role of orchestrating the movement of military
personnel, equipment, and goods. Today, the term logistics applies to any context
that requires moving commercial goods within the supply chain.

Many companies provide logistics services to manufacturers, retailers, and other


industries with a large need to transport goods. Some of these logistics’ providers
own the full range of infrastructure, from jet planes and trucks to warehouses and
software, while others specialize in one or two parts. DHL, FedEx and UPS are
well-known logistics providers.

Typically, large retailers and manufacturers own major parts of their logistics
network. Most companies, however, outsource the function to third-party logistics
(3PL) or fourth-party logistics (4PL) providers. A business might turn to a 3PL
provider to manage specific aspects of logistics, such as warehousing, while
retaining some oversight of these operations. Businesses outsource all aspects of
logistics to 4PL providers, including oversight and management. Outsourcing an
entire supply chain relieves customers of time-consuming and costly logistics
processes.
What are the functions of logistics?
Transportation and warehousing are the two major functions of the logistics
industry. Transportation management focuses on planning, optimizing and
executing the use of vehicles to move goods between warehouses, retail locations
and customers. The transportation is multimodal and can include ocean, air, rail
and roads.

Not surprisingly, transportation management is a complex process that involves


planning and optimizing routes and shipment loads, order management, freight
auditing and payment. It can also extend to yard management, a process which
oversees the movement of vehicles and fleet management through the yards
outside manufacturing plants, warehouses and distribution centers. Carrier
management is an important aspect since the price, availability and capacity of
transportation carriers varies widely.

Logistics companies typically use transportation management system (TMS)


software to help meet the demands of transport-related logistics. There are also
niche applications, such as yard management systems and warehouse management
systems (WMSes).

Warehousing, or warehouse management, includes functions such as inventory


management and order fulfillment of customer demand. It also involves managing
warehouse infrastructure and processes; for example, in a fulfillment center, orders
for goods are received, processed and shipped to the customer. Most companies
use WMS software to manage the flow and storage of goods and track inventory.
Enterprise resource planning software vendors typically offer TMS and WMS
modules, as well as specialized components for inventory control and other
logistics functions.

Customs management, also known as global trade management, is often


considered part of logistics. The paperwork to show compliance with government
regulations usually is processed where goods across national borders or enter
shipping ports.
Why logistics is important.
On-time delivery of intact packages has always been important throughout the
supply chain process. However, it has become even more critical in recent years as
omnichannel commerce has becomes more common, with its same-day home and
retail delivery of customized products ordered from smartphones.

Suppliers, manufacturers, distributors and retailers have had to improve their


logistics processes to meet the demand for faster, more convenient delivery of a
large number and variety of goods. They also have had to better integrate their
processes and systems, implementing ways to improve supply chain visibility.

Understanding logistics in business


The importance of logistics is particularly clear when examining the business
supply chain. In business logistics, the individual processes involved in
transporting and storing goods are managed holistically and viewed by
management as one, unified system.

Some of the components that function as part of that unified system include the
internal teams and third-party contractors that handle forecasting and planning,
transportation, order processing, customer satisfaction and service, and
warehousing. Manufacturing plants may handle certain processes themselves but
then outsource other processes to outside entities.

A liquified natural gas terminal is an example of a business context where effective


management of multiple logistic processes is critical. Various teams must handle
the transportation, processing and storing of natural gas products. The many
moving parts involved must be well managed or else the overall process will break
down, a situation that could be dangerous given the volatile nature of natural gas.
Difference between logistics and supply chain management
Logistics management is an important component of supply chain management
(SCM), and the terms are sometimes used interchangeably.

Logistics management
Logistics management focuses on materials handling and managing the movement
of finished products as efficiently as possible. Sometimes, the terms inbound
logistics and outbound logistics are used to denote logistics for goods arriving at or
leaving a facility, respectively.
Another important category of logistics management is reverse logistics. This is the
process used to return a product to a distribution center for servicing, refurbishing,
decommissioning, and recycling. This is especially pertinent to e-commerce.

Supply chain management


SCM encompasses a much broader range of supply chain planning activities. These
include demand planning, sales and operations planning, and supply chain
execution, including strategic sourcing and transportation management.
Different types of logistics
There are several phases within a typical supply chain, from sourcing raw
materials, to creating or manufacturing the products, to delivering them to end
users or businesses. Each phase can use a different type of logistics. Inbound,
outbound, and reverse logistics are among these types, but there are others, such as
the following:

Procurement logistics. This encompasses finding and contacting the needed


suppliers for raw materials and anything else needed to begin the production phase.
It's important to choose the correct number of materials and have them delivered in
a timely manner.
Production or manufacturing logistics. Multiple processes are encompassed
here. These include the creation, in-house transport and storage of a new product,
as well as any efforts to optimize these processes and reduce the time and cost
required to meet a consumer's product order.
Distribution logistics. The timely delivery of a product to a consumer can take
place either directly, where a manufacturer is tasked with delivery to end users, or
indirectly, where a retailer or wholesaler is tasked with selling and delivering to
end users. Distribution logistics is also focused on optimization of packaging and
shipping methods.
Disposal logistics. This type of logistics spans the entirety of the supply chain
because every phase is prone to waste. It's similar to reverse logistics, yet different
in that it encompasses disposal processes as well. Residual materials can be
recycled or recovered to maximize efficiency; any material deemed unusable can
be disposed of.
The future of logistics
Artificial intelligence (AI) and automation will play important roles in how
logistics operates in the future. Transportation in particular and the logistics
functions related to it will rely on AI systems to automate repetitive tasks so
logistics experts can focus on more important or innovative work. Some logistics
providers are already using AI to track packages and predict transport-related
problems in the supply chain. Additionally, other technologies like radio frequency
identification systems are used to track the whereabouts and conditions of goods in
real time and provide automatic updates.

Meanwhile, driverless vehicle technology, such as driverless forklifts, delivery


trucks and drones, is likely to become commonplace in warehouses and warehouse
yards, as well as on highways. Challenges remain, but business will want the
efficiency they provide as they use data to identify the most optimal routes to
shorten delivery times.

Industry 4.0, the cyber and digital transformation of manufacturing, includes


logistics 4.0 as one of its subfields, in which emerging technologies are coming
together to modernize logistics. These include big data, AI analytics and IoT.

You might also like