What is Logistics Management?

Logistics has become a prominent department of the internal structure of any organization nowadays. The process of planning, carrying out, and managing the effective, sufficient movement and storage of goods, services, and related data from the place of origin to the site of consumption to satisfy consumer demands is known as logistics management. It controls the flow of traffic into and out of the institute.

The sales, finance, procurement, and human resources modules of ERP (Enterprise Resource Planning) systems are frequently connected with the logistics management modules. More intensely specialized logistics management applications concentrate on supply chain planning and execution, transportation management, and warehouse management. Consequently, it is a part of the organization that controls resources and performs tasks by utilizing expertise, technology, and specialized skills.

Origin of The Concept

The French word “logistique” or “loger,” which means storage, is where the term “logistics” first appeared. According to the client’s needs, logistics in English refers to a system that moves resources, information, and items from the point of origin to a destination. Communication, transportation, inventory control, raw material control, and packing are all aspects of logistics. A component of the supply chain called logistics uses time and space to give goods more value.

The idea of logistics has been introduced previously. The history of logistics management dates back to the 19th century when the military first used it as a recognized procedure and job requirement. Before the WW1 broke out, the British Army was the first to deploy logistics management. A military supply chain system was built by creating infrastructure, including roads, railroads, ports, airfields, supply stores, and vehicles to move troops and weapons. After starting the continental distribution of agricultural goods in the late 19th century, the United States developed a system for distributing industrial goods. Ultimately, this led to the US’s official introduction of Logistics Management Science in 1964. The public sector has, up until now, integrated logistics management into its daily operations.

What is Logistics Management?

The goal of logistics management is to strategically plan the acquisition, transportation, and storage of raw materials, manufactured components, and finished inventory (as well as the information flows related to that) through the organization and its marketing channels to maximize current and potential profitability through the efficient filling of orders.

Logistics is the regulation of resource movements within the supply chain as well as the management of transportation. Any other sectors between production and consumption, such as storage facilities, are also covered. Thus, logistics refers to the movement and storage of items inside and outside a firm. Being able to deliver the right resources at the right time is the aim of logistics management. By employing efficient logistics management, a corporation can save expenses while increasing customer satisfaction.

An illustration of how logistics is employed in the natural gas sector is managing the pipelines, vehicles, storage locations, and distribution hubs that handle oil as it is changed along the supply chain. Again, Nike’s supply chain is based on three key organizational principles:

• Cost-cutting
• Outsourcing risk reduction through diversity
• Management of its impact on the environment

These tactics are monitored and tracked by the logistics management system.

Logistics is utilized more extensively to manage and move resources, people, materials, inventory, and equipment from one area to storage at the desired destination. The transportation of supplies and equipment to troops in the field is referred to as logistics in the military. The emergence of e-commerce and the quick expansion of the online ordering market has made logistics one of the fastest-progressing sectors in the world. As a result of logistics’ ongoing evolution, many businesses have formed intending to optimize the supply chain in unthinkable ways.

Again, The Council of Supply Chain Management Professionals (CSCMP) explains that logistics is a broad term encompassing the planning and executing the efficient flow of products and services from the source to the point of consumption. Essentially, these systems support the transportation of goods worldwide. For example,

Elements of Logistics

The logistics elements further help explain what logistics activities and processes are undertaken in a supply chain. There are five core functions of logistics management.

1. Storage, warehousing, and materials handling
2. Packaging and unitisation
3. Inventory
4. Transport
5. Information and Control

Logistics and Technology

Utilizing trends like supply chain integration, machine learning, artificial intelligence, and the internet of things will help the management system stay ahead of the curve (IoT). Knowing these trends in logistics is more crucial than ever, given that customers now demand more from organizations in terms of real-time communication, technology, and delivery schedules. Innovative technical solutions impact many businesses, particularly the logistics industry.

• Automation
• Blockchain Technology
• Artificial Intelligence and Machine Learning
• Internet of Things (IoT)
• Transportation Management Systems (TMS)

Modern consumers are technologically aware, which leads to higher expectations from companies. They expect exceptional customer service, prompt deliveries, real-time visibility, and flexibility. Businesses must stay caught up in technological developments because logistics technology can only meet the consumer’s needs. The only companies that will last over the long term are those that advance with technology.

Digital change is occurring across all industries quicker than anticipated. Most businesses would not have needed to get ready to move to digital when the pandemic hit quickly. Nevertheless, they embraced logistics technologies as soon as they could to meet the issues the pandemic posed. The logistics industry must combine quality, speed, and integration with satisfying everyone throughout the value chain. As we head into 2023, logistics companies will have their job cut out because they can only stay competitive by keeping up with technological advances.

Interesting Facts About Logistics

The large field of logistics management includes distribution, packaging, and shipping. However, the business has seen tremendous transformation in the last few decades due to different innovations. Here are a few of the fascinating supply chain and logistics statistics.

• Logistics management employs more than 5 million people, including Transportation and Warehousing.
• Logistics management and supply chain management software and technologies are a huge part of the market, and the requirements increase by 9% yearly.
• About 2.5+ billion online shoppers are a substantial part of logistics management.
• Outsourced logistics reduce overall costs; shipping alone is about a trillion dollars in the industry.
• Across the world, $8 billion is spent on moving goods over road transportation, and logistics management ensures it’s efficient and effective.

Bottom Line

Logistic management is essential for a more efficient way of conducting organizational function operations. It deals with raw material management, transport, storing, and distributing goods and services. Managing complex operations while dependent on logistics is a strategy manufacturers use to maintain efficiency, limit costs, and satisfy consumer expectations. Given the fame of e-commerce behemoths like Amazon, logistics now goes beyond transporting commodities from one place to another. Sometimes referred to as logistics, these activities aim to improve customer satisfaction. Technology’s influence on the logistics industry will only increase as it continues to alter how we live, changing how firms efficiently and quickly deliver their items to customers. Logistics may not be the first consideration when making an online or in-person purchase, but it is integral to every purchase we make. So it has become a broader part of the business industry worldwide in the last few decades.

Reference

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2. Stock, J. R., & Lambert, D. M. (2001). Strategic logistics management (Vol. 4). Boston, MA: McGraw-Hill/Irwin.
3. Bramel, J. (1997). The logic of logistics: theory, algorithms, and applications for logistics management. Springer.
4. Chiu, H. N. (1995). The integrated logistics management system: a framework and case study. International Journal of Physical Distribution & Logistics Management.
5. Sople, V. V. (2009). Logistics Management, 2/E. Pearson Education India.
6. Buurman, J. (2002). Supply chain logistics management. McGraw-Hill2002.
7. Myerson, P. (2012). Lean supply chain and logistics management. McGraw-Hill Education.
8. Kahn, K. B., & Mentzer, J. T. (1996). Logistics and interdepartmental integration. International Journal of Physical Distribution & Logistics Management.