How to Refresh Your Knowledge About Logistics

Logistics is a commonly thrown around word in business, but few people really understand it. So what is it and why is it important? Here's a refresher course on logistics that can help you understand the wide-encompassing term.

Logistics in a Nutshell

The simplest way to define logistics is to think of it as the process that starts from the inception of a business idea to the execution of the idea and beyond. It encompasses everything from the drafts and blueprints to the marketing campaigns and customer relation strategies used. Now you can see why proper logistics management is important. Kinks in any part of the process, i.e. production or materials, can start a domino effect that hurts your business' revenue and growth.

Logistics Management

As the name implies, logistics management is the organization and implementation of operations within a company. In business, these operations pertain to any and every task done from day to day, including the menial administrative and custodial work to the sourcing of raw materials and dealing with customer complaints. Any process that plays a part in fulfilling customer expectations and meeting your organization's financial objectives are covered by logistics management tools and practices.

Types of Logistics Management

There are four primary types of logistics management, each one focusing on a different part of the supply chain. These include supply management and logistics, distribution and material movement, production logistics and management, and reverse logistics and product return. Here's a brief overview of each one:

• Supply management. This covers the planning, acquisition, and coordinating of resources that are needed at any given time and place to produce a desired output. An example would be delivering concrete and steel to a construction site.
• Distribution and material movement. The process covers transportation of materials from storage to where they need to go.
• Production logistics. This part of the supply process encompasses assembling supplies into a product, be it an end-product sold to consumers or in-house equipment for fabrication of more parts.
• Reverse logistics and product return. This pertains to reclaiming resources from production site back into inventory.

Understanding logistics management is key to finding inefficiencies in your current business workflow and making the necessary modifications to improve output and growth rate.