Logistics
Logistics is the discipline focused on the management of resource movement from a point of origin to a final destination. This encompasses a wide range of resources, including tangible goods like products and equipment, as well as intangible assets such as information and time. The primary objective of logistics is to ensure that the right product reaches its intended location at the appropriate time and cost. Historically rooted in military supply chains, logistics has evolved to support both military and civilian needs, particularly as globalization has complicated supply chains with resources spread across various countries.
In business, logistics can be divided into several specialties, including inbound logistics, which deals with the acquisition and movement of materials into a company, and outbound logistics, which involves the delivery of products to end users. Other specialized areas include procurement logistics, distribution logistics, and production logistics, each addressing different aspects of resource management. Additionally, logistics practices may focus on environmental sustainability through green logistics, or adapt to unique challenges with emergency logistics. Many businesses also opt to outsource logistics functions to external providers to enhance efficiency and focus on core operations. Overall, effective logistics management is essential for optimizing supply chains and improving overall operational performance.
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Logistics
Logistics involves managing the movement of resources between a point of origin and a final destination. These resources can include tangible goods, such as equipment, products, and personnel, or intangible commodities, such as information, energy, and time. Logistics management processes are typically designed to optimize efficiencies through the integrated planning, implementation, control, and monitoring of key aspects required to move resources across a supply chain. This includes production, packaging, inventory, transportation, staffing, and communication. Essentially, logistics is used to get the correct product to its intended destination at the right time for the best price.
Overview
Logistics has its roots in military supply. Early armies used the principles of logistics to ensure that weapons, food, and other supplies were available when and where required by traveling troops. Logistics management in the modern-day military uses multiple variables to predict demand, cost, consumption, and replacement requirements of goods and equipment to create a robust and easily supportable supply-chain system.
The application of logistics in the business sector is tied to globalization. As supply chains became increasingly complex, with resources and supplies located in countries across the world, businesses started looking to logistics as a way to more effectively manage their flow of resources.
Logistics in business encompasses multiple specialties. For example, inbound logistics focuses on purchasing and coordinating the movement of materials coming into a company, factory, or store. Outbound logistics pertains to processes involved in the storage and movement of resources from the business to the end user. Within a business, logistics also may be applied to a specific project. Regardless of the scope, most logistics efforts incorporate, to some degree, the management of both tangible and intangible assets.
Procurement logistics, distribution logistics, and production logistics target specific activities. Procurement logistics addresses market research, requirements planning, manufacture-versus-purchase decisions, supplier management, and order control. Distribution logistics involves order fulfillment, warehousing, and transportation tasks associated with delivering the final product or resource to the end user. Production logistics is the management of processes occurring after procurement and prior to distribution. The areas covered by production logistics include planning of layouts and production and the organization and control of processes.
Other common types of logistics applied in business operations include disposal logistics, reverse logistics, green logistics, and emergency logistics. Disposal logistics seeks to enhance service while reducing expenses associated with the disposal of waste products resulting from operations. Reverse logistics encompasses practices tied to channeling the business’s surplus resources for reuse or disposal as necessary. Green logistics is aimed at minimizing the environmental impact of all of a company’s logistical practices. Emergency logistics is used less frequently but is activated when circumstances such as major weather events or significant production delays warrant a change in standard logistics processes to continue to accommodate supply-chain needs with minimal disruption.
Businesses sometimes outsource some or all of their logistics activities to external providers. A typical example is when a company hires a third-party, or nonaffiliated, transportation operator to deliver goods that are otherwise produced and managed by the business itself.
Bibliography
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