What is logistics?

What is logistics?

Understanding logistics and the complexity of it is not something that can be explained in one go. A simple definition would be that it broadly refers to the process of planning, implementing and controlling the movement of products, services or information within a supply chain from the point of origin to the point of consumption or the desired destination.

The term logistics originated from the military when they were referring to the movement of equipment and supplies to troops in the field. Since then it has become a terminology that is widely used by logistics companies predominantly referring to moving of commercial goods within the supply chain.

From the above it is clear that such a complex process require intense management to ensure that minimum time is lost as it directly impacts on the bottom line. Logistics management focuses on the efficient management of the day-to-day activities concerning the production of a company's finished products or services from the point of origination up to the end destination. It ensures that you have a plan to fulfill the needs of your customers and one which oversees the kind of resources you have to manufacture and distribute your product. The main goal of logistics management is to provide the right amount of resources or input these at the right time into the supply chain and then ensure the products are delivered to the right person and location in good condition. The goal of logistics is to meet customer requirements in a timely, cost-effective manner.

The reason why logistics is such a large and complicated vertical to tackle and understand is largely due to the fact that it comprises of the below which is made up of many components:

  • Logistics fields
  • Procurement logistics – procuring raw materials and parts
  • Production logistics – materials management, distribution in factories product management and shipping
  • Sales logistics – delivery from warehouse to wholesalers, retailers and consumers

There are various companies that specialize in logistics, providing their services to manufacturers, retailers and other companies that need transportation of their goods to their distributors or customers. These varies and some have a large infrastructure that uses planes, ships, trucks, railway and other forms of transport.

There are two major functions of logistics, which are transportation and warehousing. If you are in the business of managing various products for various companies it is critical to get this right. Getting shipping or orders to the wrong destinations can be very costly.

Transportation management in its own is a complex process as it involves the planning of resources, routes and shipment loads, freight auditing and payments.

On the other hand warehousing management includes functions such as inventory and warehouse infrastructure process management and order fulfillment. This is the point where the goods is received and then distributed to the end user.

Logistics has always played a critical part in many companies and over the last years with omnichannel commerce becoming such a common phenomenon it has changed quite a bit. Customers now look forward to benefits such as same day and home deliveries including personalized products which can be ordered online and received in the comfort of their homes as early as the same or following day.

Customers have become accustomed to instant gratification and therefore it is imperative for suppliers, manufacturers, distributors and retailers to be able to meet the demand with more convenient delivery and improved logistics processes.

It is important to understand that there is a difference between logistics and supply chain management. Logistics is only one part of the overall supply chain management (SCM) process. SCM has a far broader function such as demand planning, sales and operations planning and strategic sourcing of the relevant products.

The goal of logistics in short is to have the right amount of resources, the right output in time and getting it to the appropriate location in a good condition.

With technology and innovative logistics strategies, the landscape has changed drastically over the last decade and therefore logistics companies rely heavily on having the right software at each touch point that forms part of the logistics process.

Ubunye’s products are perfect for the capturing, storing and retrieving of documents whether it is in the warehouse, on the road or at the point of delivery.

Contact one of our friendly team members on bps@ubunye.com to see how we can smooth the path for your logistics operation.

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