As long as there are processes, in any capacity, there will be a need for someone to manage those processes. Naturally, different process require slightly different ways of managing, but the idea is the same – to oversee the day to day activities of the process, analyse the effectiveness of the process, and implement strategies to keep the process functioning optimally all the time.
Logistics management is one such form of managing a complicated process. The term ‘logistics’ came about as a word used to describe the organisation of military operations, from the movements of the troops to the storage of their equipment.
While most logistics managers are not arranging military stings, the concept is the same, regardless of what business you’re running – your goods and services are your equipment, the people involved are your troops and the logistics manager is the General responsible for making sure everything runs smoothly.
What Is Logistics?
Google tells us that ‘logistics’ is a noun, defined as “the detailed organisation and implementation of a complex operation”, and the Cambridge English dictionary explains it in simpler terms, as being “the careful organisation of a complicated activity so that it happens in a successful way.”
Perhaps the most relevant description of what logistics is comes from Business Dictionary, which defines it, quite simply, as “the management of inventory in motion and at rest.”
What Is Logistics Management?
Logistics management is, at its simplest, the management of the flow of goods and services in and out of a company.
There are two main sections involved in managing logistics:
This is all about the managing of goods that come into the business. This includes things like sourcing raw materials, purchasing and receiving of these materials, and storing them appropriately until they can be moved to the necessary place for manufacturing.
This process happens between suppliers and the company.
This refers to the management of goods that are moving out of the business. This includes warehousing, packaging and transportation of goods. Outbound logistics is all about bringing the supply chain process full circle – delivering the end product to the waiting customer.
The outbound logistics network begins at the company and ends with the consumer.
Logistics management involves the organisation of both of the above – ensuring that the process runs smoothly either way, and the chain follows a logical and practical sequence.
What Does Logistics Management Entail?
While the focus of logistics management is on the movement of goods and services through the supply chain, the main goal is a simple one – to keep the customer happy.
What logistics management aims to do is to deliver the right goods, at the right time, in the right quantity and condition, and at the right price. This might sound rather vague … Right?
Well, as the goal is full customer satisfaction, the logistics manager (or logistician) needs to make sure that the whole process, inbound and outbound logistics, runs without a hitch to get the customer what they need – the product they want, when they want it, at superior quality and at a price that’s acceptable.
What this means is that the logistics manager needs have fantastic organisation skills, a talent for time management, be a great communicator and be able to multitask.
Some of the duties that logistics management may be required to perform include:
- Inbound and outbound logistics
- Fleet management
- Warehousing and storage
- Handling of materials
- Fulfilling orders
- Managing inventory
- Stock control
- Sourcing materials
- Negotiating costs
- Selecting suppliers or vendors
- Organising transportation of materials
- Analysing and selecting delivery methods
- Following up on processes
- Ensuring time constraints are adhered to
- Implementing back-ups in order to ensure the process stays on track
The reason logistics management is such an important part of the supply chain, is that this is where a lot of the cost-saving and time-saving comes in. Ensuring the whole process is efficient in these two ways is a goal second only to customer satisfaction, and the logistics manager is responsible for this.
The more cost-efficient the process is, the more affordable product can be provided, and the same goes for time management – the quicker the process can be completed, the faster the product is delivered to the customer.
Making sure the company saves time and money from the start, and being able to deliver cheaper, faster, high quality products to the client is a double whammy in the business world, and goes a long way to helping the company stand out in the market.
How Does Logistics Management Differ From Supply Chain Management?
At first glance, these two may seem like pretty much the same thing. However, there are a few key differences that make them two distinctly separate jobs.
Logistics is what happens all within one company, from start to finish of the whole process. Inbound and outbound logistics all come from the same organisation, referring to the activities involved in getting the finished product from raw material to sellable item. The management of all of this is done specifically from within a single company.
Supply chain management involves a larger network of companies, which includes suppliers, warehousers, transportation companies, distributors and wholesalers. The management of a supply chain is quite a bit more in-depth than managing logistics, as there are many, many branches to be managed, and each is different to the next, being separate organisations.
Aim of logistics management
Logistics aims to provide total customer satisfaction at the end product, with regards to quality, availability and ease of access. Supply chain management is slightly different in that the end goal is to gain a competitive advantage in the market.
The way that these goals are achieved is exactly the same – by ensuring that the process is as streamlined as possible, getting stuff out as fast as can be done, while still offering the same quality as others in the market who may be taking longer to deliver.
While the process is the same, and the aim is essentially the same, to keep the customer happy, that’s where it ends for logistics. Supply chain management, being that it is a much more vast network and includes many working relationships and collaborations, takes this a step further, and aims to establish the company as a favourite in the market.
While what’s involved in the two jobs may appear to overlap somewhat, they are markedly different roles in the whole process. Logistics is a working part of the supply chain, and while it has many of the same duties as supply chain management, it nevertheless falls under the umbrella of being just one piece of the supply chain puzzle.
Logistics and logistics management are such vital parts in the supply chain process. While it is essential that the company has good working relationships with a wide network, the day to day overseeing of what’s coming in and out of the organisation is paramount to the smooth running of a low-cost, time-efficient, customer-friendly business.
After all … It’s logical, right?