What is Logistics?

Logistics as a term is used more generally to refer to the action of coordinating and moving different resources – materials, inventory, people, and equipment – from one location to storage at the defined destination or area. The logistics as a term is born in the military, referring to the movement of equipment and supplies to troops in the field.

Logistics vs. Supply Chain Management

Logistics and Supply Chain Management are terms that are often used reciprocally, but they are indicating to two aspects of the process.

Logistics refers to what happens within one company or organizations , including the purchase and delivery of materials, packaging, shipment, and transportation of goods to distributors, for example while SCM refers to a more extensive network of outside company that work together to deliver products to customers, including, transportation providers, warehouse providers, vendors, call centers, and others.

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Logistics Components

The management can involve and include some or all of the following business components, including:

  • Materials handling
  • Order fulfillment
  • Inventory management
  • Demand planning
  • Warehousing
  • Inbound transportation
  • Outbound transportation
  • Fleet management

Why is Logistics Important?

We know that many small businesses focus on the design and production of their products and services to best meet customer needs. But if those products cannot scope customers, the company will be unsuccessful. That’s the significant role that logistics have.

And on the customer side, if products or services cannot be produced and shipped promptly, customer satisfaction can be very low, also negatively impacting a company’s profitability and brand loyalty.

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Logistics was last modified: June 18th, 2019 by Mirjana
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