Today, businesses need experienced logistics managers to run their supply chains successfully. Without logistics, the chance of developing a successful supply chain is very slim. Learn more about the role of logistics in supply chain management below.
Definition of Logistics
Logistics is the planning and execution of the transportation and storage of goods. It covers the entire lifespan of a business’s products, from origin to consumption. As you can imagine, logistics encompasses a very complex process. This is why many businesses learn how to choose a third-party logistics provider who can do the work for them.
Differences Between Logistics and Supply Chains
Although people often use the terms “logistics” and “supply chain management” interchangeably, they have separate meanings. Logistics, as mentioned above, refers to the planning and execution of the transportation and storage of goods. On the other hand, supply chain management refers to the coordination and management of supply chains within an organization. Simply put, logistics is a part of supply chain management.
Functions of Logistics
The definition of logistics can be vague, so it’s helpful to know a few functions of logistics to obtain a better understanding of what it is and why it matters in business. Here are some essential logistics functions to know:
- Order processing
- Warehouse management
- Inventory management
- Creation and packaging of goods
- Transportation of goods
- Handling of returned or discarded goods
Benefits of Logistics
So what is the role of logistics in supply chain management, and how does it benefit a business? There are many benefits that logistics provides for a business. Some examples of benefits include lowering expenses, consolidating shipments, providing excellent quality of service, reducing the losses of goods, and improving a company’s reputation. Today, consumers expect fast and efficient shipping, which wouldn’t be possible without hardworking logistics managers and systems. A business needs efficient and hardworking logistics managers and systems to be successful.
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