If you are currently the manager of a fast-moving and wholly successful business, regardless of how large the company is and the type of industry in which it is based, you will already be fully aware of the supreme importance of proper and thorough logistics management,
Perhaps, instead, you are just finishing your studies in the field of business and are interested in entering the discipline of logistics in the future. Whatever your personal motivations are and where your professional vested interests lie here, for your information and, of course, reading pleasure, this is a guide to logistics management.
Logistics: What Does This Actually Mean?
Essentially, the term ‘logistics’, specifically when applied to the world of business, is essentially the organization and planning of the movement of various goods from one place to another and centers around two huge and entirely separate components: Warehousing and Transportation.
Just as on the factory floor, when a product moves along a conveyor belt during the initial manufacturing process, the overall logistical supply chain is made up of a plethora of different organizations and businesses who work in a specific sequence of different processes to produce and subsequently distribute goods.
What Does Logistics Management Mean?
Now you are familiar with what logistics actually involves, it is now time to turn your attention to the field of logistics management.
Basically, logistics management refers to the actual collection itself of each and every business process, which is used to either move the product to the buyer from the seller or else the movement of goods within the internal company.
It is for this reason that anyone even considering becoming a logistics manager or indeed a member of the logistics team should have naturally high attention to detail and be able to apply thought and due caution to every single decision and activity. Whether you are specifically interested in and even passionate about logistics management specifically or else are looking to enter the world of business management in general, one fantastic and truly multi-beneficial pursuit would be to enroll onto a masters in business management online, which you can fit around your current professional and personal responsibilities.
The Supreme Importance of Logistics Management
If you think about it logically, at the very heart of any company is the trade between a service or product they produce and the customer or client who buys that product or service.
It is abundantly clear, therefore, that the importance of logistics management is absolutely and crucially fundamental to the running of any business, and the smoother the path the products or services follow from the company to the buyer, the more effective the business model.
Conversely, if proper logistics management is not followed by business executives and the movement of services and products stops, there is no longer a business transaction, and when there is no transaction, the company will make no profit.
The 4 Components of Logistics Management
Effective logistics management is, therefore, absolutely crucial for any business model, and as a result, every savvy business manager and indeed business owner is always looking for ways and means to make the logistical process faster and more efficient.
There are essentially four different components that come together to form productive logistics management, as discussed in detail below.
1. Fulfillment of the Order
When an order is placed by either an individual customer or a commercial client, the manufactured products must be ‘picked’ from the factory or warehouse, following the details on the customer order exactly, and then labeled and packaged in a uniform manner. Once this process has been completed, the item is then ready to be mailed out to the customer or client.
This relatively simple process within logistics management is one of the most important, and there are five steps to achieve order fulfillment:
A. Sources of Incoming Goods
2. Management of the Inventory
There is a myriad of different inventory management techniques which can plan and prepare for future increases in specific product demand. For example, inventory management is far more complex than simply keeping a record of exactly how many items you have in the warehouse.
Tried and tested ways to increase the efficiency of a company’s inventory management include, but are certainly in no way limited to, the following:
- Manufacturing lead reports keeping on top of Lead Time
- Hire a professional inventory consultant
- Introduce a technological tracking system
- Hire a team of dedicated inventory control personnel
- Monitor the levels of inventory more thoroughly and more frequently
- Invest in inventory management software systems
- Increase the speed of product turnaround
3. Storage & Warehousing
Another exceedingly important component of logistics management for any size and scope of business is that of both long-term and short-term storage and warehousing.
A professional logistics manager must always keep proverbially abreast of the availability of space and also equipment in the warehouse, cold storage options, proximity to the required modes of transportation like shipyards and rail lines, and also awareness and monitoring of any required docking facilities.
Naturally, then, organization and planning are of supreme importance when it comes to ensuring the warehouse, as well as the factory floor, are both operating to ultimate levels of efficiency and productivity.
4. Sourcing of Material
Some people think, often those who are not currently professionally embroiled in the world of business, that material sourcing simply comes down to the sourcing of the lowest possible costs for the required raw materials needed to manufacture the product.
In reality, however, material sourcing also involves being constantly aware of the changing contributing cost increases and other factors which surround the production of the product, such as priority rankings of company rivals, dealing with delays with backorders, extraneous and previously unknown fees, increased shipment costs and add-on costs for services, to name just a few.
Logistics management is a highly competitive yet thrilling sector within business management to enter into and, in short, involves everything from material and supply handling and inventory management to order fulfillment and transport.