What is logistics
Art and science of obtaining, producing and distributing material and product in proper place and in proper quantities
Logistics Management is a part of supply chain management that plans, implement and controls the efficient effective forward an reverse flow and storage of goods and services and related information between the point of origin and points of consumption in order to meet customers requirements.The objective behind this process is to provide the right product with the right quality at the right time in the right place at the right price to the ultimate customer. The logistic activities are divided into two broad categories they are:
- Inbound Logistics: The activities which are concerned with procurement of material, handling, storage and transportation
- Outbound Logistics: The activities which are concerned with the collection, maintenance, and distribution or delivery to the final consumer.
Difference between supply chain and logistic management
|BASIS FOR COMPARISON||LOGISTICS MANAGEMENT||SUPPLY CHAIN MANAGEMENT|
|Meaning||The process of integrating the movement and maintenance of goods in and out the organization is Logistics.||The coordination and management of the supply chain activities are known as Supply Chain Management.|
|Objective||Customer Satisfaction||Competitive Advantage|
|Evolution||The concept of Logistics has been evolved earlier.||Supply Chain Management is a modern concept.|
|How many organizations are involved?||Single||Multiple|
|One in another||Logistics Management is a fraction of Supply Chain Management.||Supply Chain Management is the new version of Logistics Management.|
1. Right Product
A company who offers this kind of service must first know the kind of products that they are going to handle and transport. Having the right knowledge will give you an advantage to properly and efficiently manage both your time and resources.
2. Right Place
The right product must be delivered to the right place. Courier services provided by an LMS company must have knowledgeable drivers as well as a systematic delivery system and tracking. Both customer and the provider must have a synchronized location tracking to ensure that the products are delivered to the right place.
3. Right Price
Pricing is very essential and all products and services. They must have an appropriate price value in order to track the company income and expenses. A good system for storing and updating the right prices ensures success in LMS.
4. Right Customer
Every LMS Provider must know their target market to identify the right customers. If they will offer their services to the right market, they have more chances of gaining leads and customers that will most likely to avail them. Some uses the traditional marketing while others use digital marketing to reach more customers around the globe.
5. Right Condition
Every product or goods that are to be entrusted by the customers to LMS providers must be stored and delivered with the right condition. This is where the specifications must be referred to in order to place it on required facilities to maintain its quality.
6. Right Time
Time is very important when it comes to logistics, clients are more concern on the time of delivery. That is why every service provider must know the right time to deliver the products and in a very efficient way. Every system has a tracking functionality to monitor all deliveries and making sure that they arrive on time.
7. Right Quantity
Knowing and specifying the right quantity is also one of the key in a successful LMS. Since most of the providers are third party, companies that relies on their service must be careful in sending the right amount or quantity of goods to be delivered. Thanks to our modern technological developments that 3PLs can now manage all quantities of goods to ship/deliver.
Following areas of Logistics Management, contribute to an integrated approach to Logistics within supply chain management
- Transportation, any mode of transportation plays an important roles in the movement of goods through supply chain management via. Rail, Road, Air, Water or Pipeline.Selecting the most efficient combination improves the value created for the customers.
- Warehousing, when inventory is not on the move between locations it may have to spend some time in warehouse, it is the activities related to receiving , storing and shipping materials to and from production or distribution locations.
- Third party logistics 3PLS, Providers actually perform and manage one or more logistics services ,Fourth party logistics providers are logistics specialists and play the role of general contractor by taking over the entire logistic functions for an organisation.
- Reverse logistics, it is the way to handle reuse, recycle and return of products that make the reverse journey from the customers to the suppliers.
Logistics value proposition
logistics value proposition managers must be able to balance logistics costs against the appropriate level of customer services, logistics are usually managed as an integrated efforts to achieve customers satisfaction at the lowest total cost therefore. service and cost minimisations are two key elements in logistics value propositions.Logistics shares the goals of supply chain management, to meet the customer requirements.