Logistic process

Logistics is essentially the process of delivering things (raw materials or finished products) from one location to another. So, warehousing and transportation services serve as the two main purposes of logistics. The activities involve organizing, carrying out, and maintaining the movement and storage of commodities, as well as the provision of services and the transmission of information about the starting point and the destination.

Types of Logistics

Inbound logistics is the process by which a corporation moves, stores, and receives goods. The procurement of high-quality goods, the reduction of overhead expenses, the avoidance of material waste, the increase of sales, and the shortening of manufacturing times may all be facilitated by effective inbound logistics. The cornerstone of inbound logistics is the connection between businesses and their suppliers.

Outbound logistics refers to the movement of finished goods from a warehouse or distribution center to customers. The steps of outbound logistics are distribution, transportation, last-mile delivery, and warehousing and storage. It is a crucial component of a supplier's overall customer relationship management plan. Outbound logistics describes the process through which companies send their goods to their final clients.

Reverse logistics transporting goods from the end user to the seller is known as reverse logistics. It comprises the gathering, reviewing, classifying, and reconditioning of android distribution. You have experienced this situation at least once when you have ordered a product online that does not meet your needs. After that, you submit a request for a replacement or refund of the merchandise. The business comes to your house and picks up that item. In other words, reverse logistics is the process of getting the product from your side to the company.

Importance of Logistics

Whether you're a manufacturer or a reseller, you'll reach your customers by promoting techniques or by word of mouth. But your product will reach them through a correct distribution network. It depends on the vendor whether or not they wish to manage the delivery system by themselves or source the provision to a reliable company to handle their offer chain management. Many distributors, dealers and retailers rely upon provision for the delivery of merchandise they need. the main responsibility of any provision is to deliver the correct product within the right amount to the correct client at the correct time. logistics management is such an important activity that focuses on the efficiency and effectiveness of daily operations.

Processes of Logistics Operations

• Serving Customer's main goal of logistics is to provide customers with the products they need. Logisticians continuously monitor the demand for products at various locations.
• In any logistics system, selecting the right products is critical. It has a direct impact on the supply chain system. If you are a logistician, you can choose which category of products you want to transport from one location to another. It is critical to define this so that you can plan your transportation, warehouse, and place of business accordingly.
• Quantification is the process of acquiring material from a manufacturer or supplier. It focuses on the estimation of the quantities.
• You are aware that from time to time, you may receive an unexpected demand for material or a large order. You must either import it or procure it to meet future demands.
• Inventory management is responsible for the storage and distribution of goods in a logistics management system. When sufficient quantities of goods are obtained, they are stored until a customer places a purchase order.
• The supply chain logistics management system is based on communication between the sender, the supplier, and the receiver. They must work together to ensure that the process is smooth and error-free. The Logistics Management Information System (LMIS) is a process that plays an important role in delivering the right products, in the right quantity, at the right place, and at the right time.

key logistics Efficiency Factors

The following are some of the key logistics efficiency factors:-

• Shipping time When a customer places an order, you must ship the order as soon as possible and acknowledge the customer. The speed of your response has a positive impact on the customer and demonstrates the agility of your service.
• Order accuracy is simple to calculate and maintain warehouse stocks. However, it takes extra effort and focuses to keep the products accurate. Any incorrect products delivered to a customer will be returned, and please send the correct ones. As a result, the logistician will suffer a loss.
• On-time final delivery sometimes referred to as on-time delivery (OTD), is the proportion of goods delivered to clients on time relative to the total amount of goods dispatched. The KPI gauges the effectiveness of the supply chain and delivery activities. The units shipped on time cover the entire order and are not piecemeal.
• Transportation cost Mainly logistics makes an error in calculating the correct transportation cost. To improve the efficiency of your logistic service, take the shortest route possible to save money on fuel.
• Damaged products are the products that may occasionally arrive at the customer in a damaged state. As a result, you should always define your terms and conditions for customers. Always specify who will bear the loss if a product is damaged in some way and the customer receives it in that condition.
• Inventory turnover ratio is a ratio that indicates how many times inventory was sold in a given period.

References

• Ghiani, G., Laporte, G., & Musmanno, R. (2013), Introduction to Logistics Systems Planning and Control, A John Wiley & Sons, Ltd., Publication
• Lambert, D. M., Stock, J. R., & Ellram, L. M. (1998), Fundamentals of Logistics Management, McGraw-Hill/Irwin
• Rushton, A., Croucher, P., & Baker, P. (2022), The Handbook of Logistics and Distribution Management: Understanding The Supply Chain, The Chartered Institute of Logistics and Transport (UK), Kogan Page publishers, 5th ed.

Author: Billa Nalini