What is Logistics?
Logistics definition has been discussed by many. The bottom line is that it is understood differently by different people.
Logistics is the complete process involving planning, managing and controlling the flow of goods and services from point of origin to the point of destination.
The process consists of the process of integration of several aspects such as material handling, warehousing, information, transportation, packaging and inventory. The primary duty of an effective logistics system is to deliver the finished Products of the organization being at the required place at the lowest possible cost.
The logistics department is entrusted with the responsibilities of ensuring that the entire process is maintained and developed in accordance with the goals of the business at an economical cost. The tasks of the logistics department involve storage, distribution, warehousing, movement of goods from one place to another, tracking and delivery of goods. It includes a complete process of planning, managing, controlling and coordination to make sure that the goods reach the right place, at the right time, for the right cost and in a right condition. The various tasks performed by the department may be summarized as follows:
1. Ensuring all the requirements of the customers are effectively met.
2. To coordinate with third party logistics, Inland Trucking companies, Ocean shipping companies, freight forwarders, etc.
3. To ensure that there is a safe and timely shipping of goods.
4. To draft plans, policies and procedures for successful implementation of logistics system.
5. To ensure that the business goals of the organization are in synchronization with logistics system.
6. To create and maintain customer support.
7. To maintain coordination with vendors, service providers and transport carriers.
8. To ensure timely supply and payment of goods and reduce inventories.
Other Logistics Tasks
These are not the only tasks performed by the logistics department, the department also performs numerous other tasks, such as
Customer service management process: The department ensures that the goods are reached on time, in a safe condition and at the right place. It also serves as a middleman between organization, vendors and carriers for tracking down the geographical location of the goods and thereby provide customer support.
Procurement process Strategic plans are developed by the department to support development of fresh product and manufacturing flow management. This helps in bringing raw materials or semi-finished goods to the premises of the organization in a safe and proper condition at an economical cost. This also involves interactions with 3PLs. The department is also responsible for coordination with suppliers with regard to scheduling, hedging and timely delivery.
Physical distribution This process is concerned with the movement of finished goods to reach the point of destination. The department is responsible for the selection of the best mode of transportation while delivering the goods to the place of destination.
In conclusion: The logistics department is the heart and soul of every organization.
Some Companies outsource their logistics department to outside companies called third party logistics providers.
The logistics definition has to be understood by any entity that wishes to implement a logistics process