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Logistics: Introduction and Basics

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What is logistics?

The process of acquiring, storing, and transporting materials to their eventual destination is referred to as logistics. Identification of potential distributors and suppliers, as well as their efficacy and accessibility, is part of logistics management. Logistics managers are called logisticians. The term “logistics” was coined by the military to describe how military personnel procured, stored, and transferred equipment and supplies. The word is increasingly extensively used in the business world to describe how resources are managed and transferred across the supply chain, notably by firms in the manufacturing industry.

Many private firms specialize in logistics, serving manufacturers, merchants, and other industries with a high need for goods transportation. Some companies control everything from jets to trucks, warehouses, and software, while others focus on only one or two aspects. Well-known logistics companies include FedEx and DHL.

Functions of Logistics

The two main tasks of logistics are transportation and warehousing.

  • Transportation

Transportation management is concerned with the planning, optimization, and execution of the movement of products between retail locations, warehouses, and customers using vehicles. Ocean, aviation, train, and road transit are all possible modes of transportation. Management of transportation includes route planning and optimization, order management, freight auditing, and payment, among other things. Because the pricing, availability, and capacity of transportation carriers can vary greatly, carrier management is critical.

To address the demands of transportation-related logistics, most logistics businesses utilize transportation management system (TMS) software. Yard management systems, for example, are specialized applications.

  • Warehousing

Inventory management and order fulfillment are examples of warehousing or warehouse management. It also includes overseeing warehouse equipment and operations, such as in a fulfillment center, which receives, processes, and fulfills orders for items (shipped to the customer). To handle the movement and storage of products as well as track inventory, most businesses utilize warehouse management system (WMS) software.

Customs management, also known as global trade management, is typically included in logistics since the documentation required to demonstrate compliance with government laws must often be completed as products cross national borders or enter ports.

Importance of logistics

  • Optimization of productivity

Increasing insight into a company’s supply chain may help it run more efficiently. For process optimization and to minimize possible interruptions, company management can use the analyzed data and tracked movements of products in and out of a firm from a transportation management system.

  • Hassle-free delivery process

Logistics management is critical to getting your items to the right place at the right time. Furthermore, by selecting an experienced team of specialists, properly organized logistics assist assure rapid and safe shipping, warehousing, and delivery of items to clients.

  • Regulation of supply chain

Logistics is a crucial part of a successful supply chain since it helps firms that deal with product manufacturing, shipping, warehousing, and delivery boost their sales and profitability. A dependable logistics solution may enhance a company’s value and public image.

  • Contentment of customers

Customer satisfaction is critical to a company’s long-term success. Good logistics management results in dependable methods that assist satisfy consumer demand with excellent services. Every time a better and/or timely delivery is met, a firm might gain repeat orders by building goodwill for the provider.

Classification of logistics

  • Procurement logistics: Deals with the acquisition of materials.

  • Manufacturing logistics: The administration of acquired components and supplies, distribution within a plant, product management, packing, and shipment to the warehouse are all examples of production logistics.

  • Sales logistics: Delivery from the warehouse to wholesalers, retailers, and consumers is known as sales logistics.

  • Recovery logistics: The movement that recovers and recycles items, containers, and packaging that have served their purpose is known as recovery logistics or reverse logistics.

  • Recycling logistics: Recovering and Recycling Recyclable Products and Containers is part of the recycling logistics process.

Automation in logistics

Artificial intelligence (AI) and autonomous vehicle technologies will play significant roles in the future of logistics. AI is already being used by certain logistics companies to better track shipments and forecast transport-related difficulties in the supply chain. Meanwhile, self-driving forklifts, delivery trucks, and drones are anticipated to become more ubiquitous in warehouses, warehouse yards, and highways.

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