What is Logistics Management? Types and Benefits

Logistics is essentially the process of moving things (raw materials or completed goods) from one location to another. Transportation and warehousing are the two main activities of logistics.

 

The operations involve the development, implementation, and maintenance of goods transportation and storage, as well as service and information from the beginning to the conclusion. It is, in essence, an activity that is part of supply chain activities. We can call someone a logistician if they operate in the field of logistics management.

 

What is logistics management?

 

Multiple procedures underpin logistics management, ensuring the smooth transfer of commodities, freight, parcels, raw materials, completed inventory, and packages from point of origin to end customers. Depending on an organization's digital maturity, these procedures can be both automated and manual. 

 

Modern and efficient logistics management, which is enabled by technologies such as Artificial Intelligence, Machine Learning, Predictive Analytics, and the Internet of Things (IoT), among others, enables businesses to discover new revenue streams, increase delivery profitability, and provide delightful customer experiences. Supply Chain Management includes logistics management as a key component.

 

Other logistics operations include warehousing, protective packing, order fulfillment, stock control, maintaining demand-supply balance, and stock management.
 

 

Types of Logistics Management

 

The logistics management process begins with the gathering of raw materials and ends with the delivery of items to their final destination. Different supply chain procedures are related to various types of logistics. 

 

The following are the primary categories of logistics management:

 

1. Managing the Supply Chain

 

Supply management is the planning, procurement, and coordination of supplies required in a given area at a specific time in order to support production. This logistical planning will also include material storage and transit coordination. 

 

It also entails assessing the level of supply in relation to demand in order to ensure that the process runs smoothly. Supply management must be completed on time, as delays can cause the entire supply chain to be disrupted.

 

2. Material Handling and Distribution

 

This type of transportation usually entails transporting stored materials or goods for further processing or distribution. This type of logistics necessitates a great deal of loading, unloading, tracking, and material inventory management. 

 

This style of management oversees the distribution of goods from a central warehouse to multiple sites, requiring extensive material transportation and the importance of on-time delivery.

 

3. Product Administration

 

Product management in logistics includes the planning, management, and control of a company's many phases of production. It handles the necessary coordination in the manufacturing or assembly process, as well as transportation between factories and warehouses, production management, and adhering to a rigorous timetable. The ability to attain capital efficiency is provided by production logistics.

 

4. Management of Customer Service

 

Customer service management encompasses the techniques, strategies, and technology that businesses employ to manage and analyze customer interactions and data across the customer’s lifetime. 

 

Excellent communication and on-time, damage-free delivery are essential for good customer service management in logistics. This aids in the improvement of customer relationships and the retention of clients.

 

5. Returns Administration

 

Returns management, often known as reverse logistics, is the process of handling things that have been returned to the firm. Returns management entails recovering materials and supplies from a manufacturing or assembly process, as well as receiving damaged, unwanted, or unused items from customers. 

 

By inspecting and categorizing returned products properly, one may dramatically decrease losses by restocking inventory with undamaged/unused returned items. (Here)

 

 

Major Components of Logistics Management

 

Through numerous routes of transportation, logistics management encompasses a broad network of suppliers, agents, freight forwarding providers, distributors, packers, and service providers. It's a complicated process with many components that impact how efficiently items are moved.

 

The following are the key components of logistics management:

 

1. Inventory Management

 

Inventory planning ensures that sufficient stock amounts are kept on hand to fulfill consumer demand while reducing storage expenses. Inventory planning aids in the proper fulfillment of orders, the organization of warehouses, greater production, and time and money savings.

 

 

2. Inbound Logistics

 

The transportation, storage, and receipt of products by a company is referred to as inbound logistics. Effective inbound logistics may aid in the procurement of high-quality items, the reduction of overhead costs, the avoidance of material waste, the expansion of sales, and the reduction of production time. The link between enterprises and suppliers is the foundation of inbound logistics.

 

 

3. Outbound Logistics 

 

The conveyance of finished items from a warehouse or distribution center to clients is referred to as outbound logistics. Warehousing and storage, distribution, transportation, and last-mile delivery are the steps of outbound logistics. 

 

It's an important part of a supplier's entire customer relationship management strategy. Outbound logistics refers to how businesses deliver their products to their final customers.
 

 

4. Management of the Fleet

 

Fleet management entails the control of vehicles in order to eliminate or reduce the hazards of moving products. It also aids in the improvement of efficiency and production, as well as the reduction of overall transportation and labor expenses. 

 

Fleet management aids in the calculation of logistics service profitability and scalability, as well as the optimization of logistics planning.

 

 

5. Warehousing

 

The storage of commodities or raw materials in a warehouse is referred to as warehousing. The warehouse's capacity has a significant influence on inventory management. 

 

Without efficient warehouse management, effective logistics management is impossible. Warehouse proximity and capacity are two important factors in determining the effectiveness of logistics operations in a supply chain.

 

 

6. Fulfillment of orders

 

Customer happiness is greatly influenced by delivery fulfillment. It is the procedure for getting a product from the point of sale to the customer's hands. It also relates to how companies respond to consumers and the actions necessary to attain the 'perfect order index.

 

 

7. Demand Forecasting

 

Demand planning is the act of studying, evaluating, and anticipating goods demand to guarantee that items and goods that customers want to buy are available. It enables a company to forecast future sales and maintain appropriate inventory levels to satisfy client demands without having excess inventory. 

 

Demand forecasting also aids in gaining market insights and predicting future income creation potential. It assists in the planning of resources to meet demand and supply shortages as they arise.

 

(Suggested reading: A Complete Guide to Marketing Management)

 

Benefits of Logistics Management

 

Businesses need to implement effective logistics management to remain competitive and to ensure their stability. Proper logistics management ensures that businesses can meet both demand and consumer expectations. 

---

Benefits of logistics management

---

1. Increasing client satisfaction

 

Logistics management aids in the delivery of timely and high-quality service. Because delayed deliveries can lead to a dissatisfied consumer, a management approach might continually aim to enhance transportation procedures and prevent any disruptions. 

 

More value may be added to the customer experience by providing improved customer service and a seamless freight handling procedure. Improved customer service may boost your brand's or company's reputation and help you create more revenue. 

 

As a result, well-managed logistics leads to a great consumer experience overall.

 

2. Reducing operating costs

 

When there is a lot of openness and visibility in operations, logistics work well. An effective logistics management strategy may examine historical data and optimize routes to improve efficiency and lower fuel costs. 

 

Logistics management can help you get the most out of your assets, increase company efficiency, and cut expenses.

 

3. Increased profitability

 

Companies may use logistics management to acquire a comprehensive picture of their operations, enhance customer interactions, and eliminate the need for surplus inventory. This boosts the company's profitability by increasing the order fulfillment rate. 

 

Companies may reduce operating expenses and assure coordinated supply chain management by using route optimization tools, using the newest technology advancements, and enhancing fleet capacity utilization.

 

4. More efficient intermodal operations

 

Intermodal operations entail transporting commodities from a supplier to a customer via two or more modes, or carriers. For intermodal operations, certain standardized containers are employed, which avoids the dangers of handling products directly. 

 

Better intermodal operations save money, are more environmentally friendly, and are more dependable and safe.

 

5. More efficient and productive delivery

 

Logistics focuses on streamlining processes and increasing efficiency while keeping profit margins intact. Delivery productivity is guaranteed by eliminating resource waste without sacrificing on timely delivery of products. 

 

Logistics management can guarantee that delivery productivity is not harmed by meeting quality requirements, reducing failures, faults, and deviations. (Source)

 

In conclusion, instead of competing, businesses should focus on collaborating. Collaboration between transportation providers, purchasers, and vendors can help cut costs. A reliable and safe mode of transportation is also critical to a company's success.