Understanding Logistics Management
What is logistics management, and is it important to your company? If you run a transportation company, the answer to importance is undeniable yes. First, it’s good to understand the difference between transportation and logistics management. Second, it’s important to understand that they go hand in hand, although they are different.
Transportation management is the management of all activities involved in the actual movement of goods, such as planning and rating freight movements, selecting appropriate routes, and managing shipments.
Logistics is the broader spectrum that involves both the ins and outs of transportation from manufacturers to consumers, obtaining and producing, to distributing. Think of it like this. Logistics is the man behind the curtain or the brain behind the operation. Transportation is the muscles that ensure a well-executed operation.
In this article, we will discuss four types of logistics management and the benefits logistics management provides.
- Supply Management Logistics
Supply management includes planning and coordinating all the materials required for production. It includes details such as the specific time, place, and dates the tasks will be completed. It also includes the transportation and storage process of the materials used and evaluating supply at different levels in the process. The proper assessment ensures that customers’ needs are met, increasing customer satisfaction.
- Production Management Logistics
Production management logistics involves coordinating everything needed to create a product. It is the management of all the stages involved in combining the distributed supplies to make the product.
- Distribution Logistics
As the name suggests, distribution logistics involves moving materials to their respective places as needed. It includes loading, transportation, unloading, and even storing. It also involves keeping track of the materials and using stock.
- Reverse Logistics
Reclaiming materials from production is called reverse logistics. It is the process of gathering excess materials and putting them back into inventory. It may also involve returning unwanted materials by a customer who seeks a refund.
Now that you know the types of logistics management, let’s discuss their importance. There is no doubt that logistics management is one of the most important elements in the supply chain. Reasons for this are listed below.
- Increase Efficiency
Logistics management increases efficiency, helps you avoid inconveniences, maintains up-to-date communication, and improves productivity.
- Improve Customer Experience
In any business, customer service is the key to success. Business owners need to understand what their customers want and then strive to meet those requirements. Other key factors contributing to customer satisfaction include great product evaluation, the convenience of browsing, and secure payment options. Overall quality of the products and/ or services upon delivery is another critical factor that must be considered. Logistics management helps you succeed in all these avenues.
- Cost Reduction
For proper allocation of funds and expense management, it’s important to analyze all data and aspects of the business. One way to do this is by acquiring the information you receive from logistics management. The information received can help business owners make better decisions. Also, monitoring inventory management helps reduce costs and expenses.
Hopefully, this overview helps you understand the importance and benefits of logistics management. Many systems are available to business owners looking to add this to their management capabilities. It is good to decide what you need from a transportation and logistics management system to narrow down your options.