In recent times, the surge in demand for online deliveries combined with shorter delivery cycles and ever-increasing customer expectations have made sure that organizations work towards more efficient logistics. To win in a world of relentless competition, you need to succeed in meeting customer demands by adopting robust logistics management techniques. Strategically planned and well-organized logistics management can optimize an organization’s operations and improve its bottom line.
What constitutes Logistics Management?
Logistics management is the movement of various products and materials from procurement to order fulfillment. The process involves several steps and is not as easy as it sounds. To understand better, we need to look at the seven R’s or the concept of 7 Rights of logistics management.
- Right product
- Right quantity
- Right condition
- Right place
- Right time
- Right customer
- Right price
To summarize, we can say that the objective of logistics management is optimizing the existing processes to improve margins and exceed customer expectations.
Is Logistics Management different from Supply Chain Management?
Yes. Logistics software is a small part of supply chain management. A major difference is that logistics management deals with only one organization, while supply chain management involves more than one organization. Supply chain management deals with procuring raw materials, turning them into products, and delivering them to the end-users. On the other hand, logistics management concerns the movement of materials in the supply chain. Logistics management is more about customer satisfaction, while supply chain management focuses on gaining a competitive advantage over business competitors.
What are the different types of Logistics Management?
Majorly, there are four types of logistics management: supply logistics, distribution logistics, production logistics, and reverse or return logistics. Besides these four, there is also third-party or 3PL logistics management that’s common nowadays. Let’s understand them all in detail.
1. Supply Logistics Management
It is the most common form of logistics that an organization deals with regularly. Supply logistics mainly concerns the procurement of raw materials or goods used to create various products. It includes a great deal of transportation and tracking of materials required at various stages of the production cycle of finished goods
2. Distribution Logistics Management
Its objective is to ensure that the procured material or goods are delivered to the right customer in the right quantity at the right time. It involves a lot of tracking and accountability. To avoid spending too much time on distribution logistics, many companies take the help of their-party vendors. Time is of the essence here. The idea is to offer customers on-time delivery with as little hassle as possible and at the least possible cost.
3. Production Logistics Management
It is the type where the procured raw materials are transformed into finished goods ready to be shipped to the end-user. Synchronization is extremely important in this type of logistics management. This type of logistics management is pivotal to manufacturing plants, assembling units, and so on. It involves moving materials from the warehouse to the manufacturing plants or assembling units. The objective here is to achieve optimal cost efficiency. Any lag or mistake in production logistics could result in extra costs for the manufacturer, not forgetting failing to reach stringent deadlines and dashing the expectations of customers.
4. Reverse or Return Logistics Management
As the name suggests, it involves the return of finished products or goods from the end-user back to the manufacturer, supplier, or retailer. This complex process is directly related to customer satisfaction. Failing here can undo all the hard work done by you in an instant. Moreover, there’s all the possibility that you would lose the customer forever if they have not had a great experience with returning wrong or damaged products.
5. Third-party Logistics Management
The pandemic has proved to be a catalyst for the robust growth of e-commerce companies worldwide. As online delivery businesses thrive, many organizations utilize third-party logistics to deliver their products and reach customers faster. Opting for 3PL solutions makes it easier for the company to focus on its core competencies instead of worrying about complex delivery problems. A competent 3PL partner can help execute complex logistics with speed and accuracy, thereby helping you improve the bottom line.
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Why do you need to improve Logistics Management?
As business dynamics keep changing with various factors coming into play every now and then, the need for good logistics management is pivotal. Logistics management is key in achieving customer stratification, improving cost efficiency, and beating the competition. To achieve better efficiency in logistics, companies can analyze historical data related to the transportation of materials from the point of origin to the end-users and follow ways to optimize their delivery mechanism. Logistics managers can better understand how to satisfy customer demands and offer faster, safe, and high-quality delivery by utilizing such insightful data.
One of the ways to focus on improving logistics management in the current scenario is automation. Automating your logistics operations can result in better efficiency and improved margins. Organizations need to focus on implementing smart logistics and supply chain management solutions. One way of doing this is by partnering with a trusted supply chain and logistics provider and investing in upgrading your logistics capabilities. With the use of the latest technology, you can focus on improving the overall logistics experience for your end-users. Once you modernize logistics management, it will eventually save time and money for your business.
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To sum up, we can say that logistics management focuses on achieving cost efficiency by optimizing the supply chain and exceeding customer expectations. To grow and scale a successful business, continuous improvement in logistics management is the key.
FAQ |Why Should You Focus on Improving Logistics Management?
What is the difference between logistics and supply chain management?
Logistic management is a sub section of supply chain management which talks about the movement of goods, services, information and capital, whereas supply chain establishes the connection with the suppliers to the ultimate consumer
Why is logistics management important?
Main goal of logistics management is to improve production planning and ensure flawless delivery of the goods at the right place on right time. Moreover, an effective logistic management can boost overall customer satisfaction and a brand value
What are types of logistics?
- Procurement Logistics - Production Logistics - Sales Logistics - Recovery Logistics - Recycling Logistics
Ravi Sharma : is a Sr. Solution Consultant. He is in the supply chain and logistics domain for over 15 years now.
His result-driven expertise is derived from studying the rise of the supply chain, its automation, digitization, and the dynamic changes from time to time. He puts his vast knowledge to use in guiding the sales and marketing team at Cybage Software along with formulating and effectively aligning growth strategies for clients’ businesses.
His prior experience of 14+ years working across technical, and business domains with a primary focus on supply chain & retail has equipped him to understand the nuances, in and out of the industry from a ground zero level.
At leisure, Ravi enjoys reading, writing, and thrives by keeping up with the current trends in the supply chain & logistics market.
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