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What Is Logistics Management

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Mbokigwe Mwambungu
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69 views

What Is Logistics Management

Uploaded by

Mbokigwe Mwambungu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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What Is Logistics Management?

Logistics management is the process of managing the activities that are


required to transport goods from its source to the final customer. That process
involves a series of logistics activities such as order processing, material
handling, packaging, warehousing, transportation and customer service
management.

The logistics management process is used for tangible goods such as raw
materials, finished products, equipment and machinery to food or other
consumable items. A person who works in this field is called a logistician or
logistics manager.

Logistics Management vs. Supply Chain


Management

Logistics management is a subset of the larger supply chain


management. Supply chain management plans, implements and controls the
efficient flow of storage, goods, services and related information from the point
of origin to the point of consumption. This is done for the purpose of meeting
the requirements of customers.

Logistics management in business works across industries. It aims to manage


the fruition of project life cycles, supply chains and resultant efficiencies. As
businesses grow more complex and expand into a global marketplace,
business logisticians have evolved into something called supply chain
logisticians.

With logistics management in manufacturing, the focus is twofold: inbound


logistics for internal functions and outbound logistics for the external flow from
the point of origin to the point of consumption. Logisticians focus on inventory
management, purchasing, transportation, warehousing, consultation and the
organization and mapping of these processes.

Logistics Activities

Logistics management is a process that consists of logistic activities, also


referred to as functions that allow organizations to implement the types of
logistics management explained above.

1. Warehousing or Warehouse Management

A warehouse is a physical place where goods are stored when they come out
of production. But warehouse management can be strategically used by
companies to excel in the market. For example, the location of a warehouse
can play a significant role by allowing companies to deliver their products
faster than their competitors. Warehousing automation can also help
companies cut labor costs.

2. Order Processing & Fulfillment

Order processing and fulfillment is the process of receiving an order, ensuring


payment terms have been met, checking the production capacity and
availability of stock and preparing the order for transportation. Another
important aspect of order processing & fulfillment is to document transactions
and make sure the warehouse inventory is updated whenever an order is
fulfilled.

3. Material Handling

Materials handling refers to the movement of goods in a warehouse.


Companies need to plan their warehouse layouts carefully to help their
employees clearly understand where to find the products that are ordered by
customers. Some warehouses for big companies can be very large, so it’s
important to plan carefully to avoid any logistic inefficiencies.

4. Packaging

In logistics management, the packaging doesn’t focus on the aesthetics of the


product packaging for the final customers, but instead on how well the product
is packaged for transportation in terms of storage space efficiency, breakage
prevention, packing cost and ease of handling. If packaging meets these
requirements, it can help companies save money and facilitate its logistics
management process.

5. Transportation Management

Transportation is the process of delivering products or materials from their


warehouse to the final customer. This is the most expensive logistics activity
and therefore, is a step that should be planned carefully to
minimize manufacturing costs. Logistic managers need to find the most
efficient transportation schedule and method of transportation such as rail,
truck water and air.

6. Inventory Management

Keeping an inventory of products at the warehouse is costly for businesses


and may affect their profitability. For this reason, the goal of inventory control
is to gauge customer demand to maintain an inventory level that satisfies it,
but without causing overcosts. Some manufacturing methods such as lean
manufacturing or just-in-time manufacturing allow businesses to manage their
inventory costs.
Why Is Logistics Management Important?

The purpose of logistics management is about finding more efficient and


effective ways to move resources and products from conception to completion
and, finally, to the customer. But the driving force of these actions is to meet
customer demand and provide the best service possible to retain customers
and maintain their satisfaction by meeting their product requirements.

As customers demand better service, there’s a need to ship faster, more


accurately and with a high level of quality. It’s through logistics management
that customer satisfaction is achieved.

But that’s not the only benefit. It also helps to create visibility in the
business’ supply chain. By analyzing historical data and tracking the real-time
movement of goods, logistics managers can better the flow of materials and
avoid potential disruptions.

Therefore, logistics management helps drive up revenue. It improves


customer service and adds to the company’s good reputation and brand,
which in turn creates new and more business. With more visibility into the
supply chain, there’s the opportunity to save costs in operations, by controlling
inbound funds, keeping inventory at the right level and organizing the reverse
flow of goods.

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