Logistics is an essential component of supply chain management and it involves planning, carrying out and management of goods, services and information from source to destination.
So, logistics includes everything from the management of traffic and transportation, shipping and receiving, import and export operations, warehousing, inventory management, purchasing, production planning to customer service. Logistics are the blueprint of a company’s supply chain. With a good blueprint, the company streamlines managing, coordinating and monitoring resources needed to move products in a smooth, timely, cost-effective and reliable manner.
Efficient logistics can reduce costs
Logistics is very critical in managing the relationship between supply chain management and consumer demand. That new smart phone in the market is creating waves because the time from inception to release took optimal time. And the phone is here to make money. At least until the next version comes up! With efficient logistics, sourcing material from across the world, sending it in the assembly line across geographical locations becomes streamlined and time-optimised. They meet or exceed consumer demands. Companies, with efficient logistics, can lower costs and increase productivity. That sets the company on its path to success.
Partnerships, freight carriers and warehouses
Efficient logistics is all about creating partnerships amongst suppliers, shipping services and ware houses while connecting all these functions via automated systems. The digital era keeps everyone in the chain informed about the other. This improves the chain of getting products to the consumer with reduced overhead costs. The result? Faster and safer delivery schedules.
Efficient logistics stems from strategic planning when calculating what is required while understanding how to obtain materials quickly and feasibly, how products are produced. This helps in ensuring swift delivery to the consumer.
Communication is everything
Simplified data communication and services between multiple departments in various locations makes it easy to create a workflow blueprint. Today, with GPS, fast internet and smart vehicles, we know where exactly in this wide world a package is at a specific moment. Real-time data enables a whole lot of efficiency that was not possible earlier. And communication of this calibre reduces costs by increasing visibility and improving the overall understanding of company needs. After all, a successful company works on having a wide margin between costs and sales. These cost savings are made possible by reducing warehousing costs and purchasing based on supply forecasts, better inventory management, reliable shipping and timely delivery to the end-user.
