Logistics Management - why necessary?

1. Logistics Management- Why Necessary? Logistics management plays a crucial role in the success of the operations of any company and directly affects the results. More significantly, logistics processes play an important role in providing customer satisfaction. Logistics management as defined by the Council of Supply Chain Management is following:“… that part of supply chain management that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements.” Logistics management (LM) is the practical part of the supply chain where goods are transported, stored, handled and carried out properly. LM focuses on short- term processes while SCM focuses on long- term procedures. Logistics management plays a crucial role in the success of the operations of any company and directly affects the results. More significantly, logistics processes play a more important role in customer satisfaction than low product costs.

3. Logistics management as defined by the Council of Supply Chain Management is following: “… that part of supply chain management that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements.” Although many confuse with the term logistics management and supply chain management, they are not the same. Logistics management (LM) is the practical part of the supply chain where goods are transported, stored, handled and carried out properly. LM focuses on short- term processes while SCM focuses on long- term procedures. Why Developing LM Strategies is Important?  Implementing a finely tuned logistics strategy is one of the best practices in logistics management. Development and implementation of formal logistics strategies is a flexible approach to the decision making process and it will increase error-response time. A deliberate LM strategy helps an organisation predict service disruptions and understand how and when to make response to them to ensure top performance of service levels. 

4. How LM Strategies are implemented? First, assessment of all logistics functions should be conducted. For this purpose, look at every part of the logistics management of an organization is taken and how it should workand how it should contribute to complete supply chain management goals is defined. Each physical part of the logistics process should be observed and its optimum function should be determined.  Even after the application of a strategy, evaluation of its success should be continued to get to know if there are other opportunities. As the entire supply chain environment is continually evolving, logistics roles must also be flexible. Inbound Logistics vs. Outbound Logistics Inbound logistics is one of the most neglected aspects of logistics management. On average, companies can save between 20-58 percentage on incoming freight spending. There are usually more pressing issues for a company to deal with and many do not have control over incoming freight. However, it is important to gain control over inbound logistics to drive significant savings and improve customer service.  Outbound logistics is an easy tool for cost savings and enhanced delivery speed. All organizations have some kinds of optimization process to manage the outbound freight. The idea of outbound logistics is quite simple: store as little product as possible and move it as quickly and accurately as possible while maintaining safety. 

5. Key Points 1. Importance of Developing Logistics Management Strategies: Development and implementation of formal logistics strategies provide a flexible approach to the decision making process and it will increase error-response time. A deliberate LM strategy helps an organization predict service disruptions and understand how and when to make response to ensure top performance of service levels.  2. Implementation of LM Strategies: • First, assessment of all logistics functions should be conducted. For this purpose, overview of every part of the logistics management of an organization is taken. • Then how it should work and how it should contribute to complete supply chain management goals is defined.  • Each physical part of the logistics process should be observed and its optimum function should be determined.  • Even after the application of a strategy, evaluation of its success should be continued.

6. 3. Inbound Logistics • Inbound logistics is one of the most neglected aspects of logistics management. It is important to gain control over inbound logistics to drive significant savings and improve customer service.  4. Outbound Logistics • Outbound logistics is an easy tool for cost savings and enhanced delivery of speed. All organizations have some kinds of optimization process to manage the outbound freight.  Published by Brainware University