What Is Logistics?
Logistics is the process of coordinating how goods and products are obtained, stored and distributed. Manufacturers rely on logistics while overseeing complex operations in order to maintain efficiency, reduce costs and ensure that consumers’ needs are met.
Due to the prominence of e-commerce companies, like Amazon, logistics embodies more than the actual movement of products from one place to another.
An important part of logistics is the steps taken in order to maximize customer satisfaction. This includes elements such as demand planning, order fulfillment, inventory management and customer service operations. These elements ensure that the goods consumers need are stocked and orders are fulfilled in a timely manner.
Logistics management software has aided the expansion of what the logistics industry entails and how goods are brought to consumers. Some examples of software for the logistics industry include transportation management systems, enterprise resource planning software, yard management systems and warehouse management systems. The growth of this technology has created a need for specialized roles and companies focused on building and implementing logistics software.
As technology continues to transform our world, its influence on the logistics industry will only become greater, prompting a shift in how companies quickly and efficiently deliver their products to consumers.
Supply Chain Management vs. Logistics
Supply chain management and logistics are often thought of as one in the same, but the terms actually capture two distinct parts of what it means to move resources.
Supply chain management is the larger network that connects global vendors, transportation companies, distributors and warehouses. This network functions as the framework that logistics works under.
Logistics is the process companies undertake to deliver goods to consumers. This process involves purchasing and delivering materials, packaging and shipping goods as well as transporting goods and products to distributors.
Why Logistics Is Important
Logistics may not be the first thing that comes to mind when a purchase is made online or in a brick-and-mortar store, but it is undeniably intertwined with everything we buy. Logistical considerations affect global supply chains, what items are in stock and when as well as where manufacturers chose to build their facilities. These influences are just one way that logistics displays importance in our global economy.
Utilizing logistics properly is essential to the function of businesses across the globe — and effectively managed logistics typically leads to positive business outcomes. With the growing complexity of the global supply chain, properly implemented and managed logistics are more important than ever.
The importance of logistics also stretches to simplifying communication and reducing costs. Effective logistics help foster relationships between suppliers, shipping services and warehousers through automated systems. The connectivity of logistics improves delivery and fulfillment of orders, which in turn reduces overhead costs. Costs are also reduced by the ability to use logistical systems to purchase goods based on supply forecasts and improved inventory management.
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