INTRODUCTION OF LOGISTICS
Abstract
Logistics is the set of activities that ensure that the right products are available to the right customers at the right time in the right quantities. Logistics acts as a link between production and consumption and essentially provides a bridge between production and market places or suppliers separated by distance and time. This requires attention to products or physical goods, people, and information about goods and people.
WHAT IS LOGISTICS?
Logistics is the part of supply chain management that deals with the efficient forward and reverse flow of goods, services, and related information from point of origin to point of consumption, according to customer requirements. (Christopher, 2016, p. 12)
It encompasses a vast range of activities, such as transportation, warehousing, Inventory Management, order fulfilment, and Supply Chain Management
Originally, logistics was a military term used to describe how military supplies, equipment, and troop movements were managed. Over time, its meaning has expanded, and today it is a key function in industries such as manufacturing, retail, and e-commerce. Whether it’s getting raw materials to a factory or delivering a package to your doorstep, logistics keeps the world running smoothly.
DEFIRNITION OF LOGISTICS MANAGEMENT
“Logistics Management is the part of the supply chain process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.” (Coyle et al., 2016, p. 4)
LOGISTICS ACTIVITIES.
· Customer Service
· Demand forecasting
· Distribution communication
· Inventory control
· Material handling
· Order processing
· Part & service support
· Plant & warehouse side selection
· Procurement
· Packaging
· Return good handling
· Salvage & scrap disposal
· Traffic & transportation
· Warehouse & storage ( Ismail 2008, p. 3)
Why Logistics is Important?
Logistics plays a huge role in the success of businesses and the economy as a whole. These facts illustrate the importance of logistics:
· Logistics ensures that finished goods and raw materials are delivered to the right place, right quantity at the right time.
· Logistics helps maintain optimal inventory levels and prevent overstocking or stockouts.
· Effective logistics management minimizes transportation and storage, warehouse costs, saving overall business costs.
· Timely and accurate product delivery improves customer satisfaction and loyalty, which are core to business success.
· Companies with efficient logistics systems can respond quickly to market changes, which gives them a strong competitive advantage.
· Logistics is essential to international trade because it allows goods to be transported across borders and supports global commerce.
· By monitoring transportation and storage processes, businesses can identify potential risks (e.g., weather disruptions or damaged goods) and mitigate them proactively
WHAT IS SUPPLY CHAIN MANAGEMENT? (SCM)
“The systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole.” (Mentzer et al., 2001, p. 18)
Difference Between Supply Chain Management and Logistics Management
Parameters | Supply Chain Management (SCM) | Logistics Management | |
Definition | Manages the entire supply chain from raw material procurement to final product delivery. | Focuses on the efficient flow and storage of goods and services from origin to consumption. | |
Scope | Covers all aspects including production, distribution, sales, and customer service. | Mainly centered on transportation and storage of goods. | |
Components | Encompasses procurement, production, distribution, logistics, sales, and customer service. | Involves transportation, warehousing, inventory management, and order fulfillment. | |
Objective | Aims to optimize the entire supply chain for timely, cost-effective product delivery. | Ensures efficient, effective transportation and storage of goods to meet customer needs. | |
Decision Making | Involves strategic decisions about production, distribution, and inventory management. | Focuses on operational decisions related to transportation, warehousing, and distribution. | |
Key Focus Areas | Coordinates with all supply chain partners to enhance customer satisfaction and optimize resources. | Optimizes the movement and storage of goods and related information within the supply chain. | |
Technological Integration | Integrates advanced technologies for comprehensive supply chain oversight and optimization. | Uses technology mainly for tracking and managing goods movement and storage. | |
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Performance Metrics | Assesses performance based on supply chain efficiency, customer satisfaction, and cost reduction. | Evaluates performance based on transportation costs, delivery timeliness, and warehouse efficiency. | |
Jaya Sharma
Assistant Manager – Content
The 7 R's of Logistics
The ‘Seven Rs’ is a popular way to define the goal of logistics management.
1) The right product
Organizations aiming to satisfy customer expectations must clearly understand their needs, select right products, and maintain quality standards. When selecting or manufacturing products, the organization must consider the size and packaging of the product to ensure safe transportation and distribution.
2. Right Quantity
The product quantity must be correct to avoid overstocking or stock-outs. Storing products that are overstocked in the warehouse can cause storage problems and increase handling costs. On the other hand, stock-outs can lead to lost sales and dissatisfied customers. Inventory management and demand forecasting ensure that the right quantity is available at the right time.
3. Right Condition
To maintain quality and customer satisfaction, products must be delivered in the right condition. This can be achieved through proper packaging, handling, and storage practices. The product should be thoroughly inspected before shipment to avoid shipping damaged products.
4. Right Place
Products must be delivered to the right location. Efficient routing and scheduling ensure that products are delivered to the right location on time. The shipper and the customer can track the location of the product and enable tracking options to facilitate timely delivery to the right location.
5. Right Time
Products must be delivered right time to meet customer expectations and remain competitive. Time is the most critical factor in transportation and logistics field. Late deliveries can result in decreased profits and customers dissatisfaction. Efficient transportation and logistics planning ensures that products are delivered on time.
6. Right Customer
Products must be delivered to the right customer. Address errors are the main cause of delivery to the wrong person. Customer data and a robust order management system ensure that products are delivered to the right customer and on time.
7. Right Cost
To prevent stock-outs or overstocking, the product quantity needs to be accurate. Overstocked product storage in the warehouse can lead to handling expenses and storage problems. However, stock-outs might result in unhappy consumers and missed sales. Inventory control and demand forecasting guarantee that the appropriate amount is accessible when needed.
FUNCTIONS OF LOGISTICS
01. Order processing
Order processing is a routine operation but requires a great deal of planning, training of people involved, and investment in the system to bring efficiency and accuracy to it. ( HKT Consultant in Phantran.net, 2025, p. 1). A purchase order given by a buyer to a supplier is an important legal document of transactions between the two parties.
- Order checking for any deviations in agrees upon or negotiated terms
- Prices, payment, and delivery terms.
- Checking the availability of materials in stock.
- Production and material scheduling for shortages.
- Acknowledging the order indicating deviations if any.
02. Inventory control
Inventory management is about keeping sufficient inventory to meet customer needs while minimizing the cost of carrying it. The biggest culprit in a company's entire supply chain is the massive carrying costs of inventory, which indirectly eat into profits. This includes the cost of financing the inventory, insurance, storage, losses, damage, and theft.
Inventory control requires information to maintain inventory records, ensure security, forecast demand for goods, and of course reorder stock.
03. Warehousing
Warehousing is the storage of finished goods until they are sold. It plays an important role in a company's logistics operations. The effectiveness of an organization's marketing depends on the appropriate decision on warehousing.
Both inventory and warehousing require modern tools that support key functions and help reduce costs through automation. Especially if some companies are conducting multiple warehouses and requires complex logistics solutions.
Warehousing is the key decision area in logistics. The major decisions in warehousing are:
( HKT Consultant in Phantran.net, 2025, p. 1).
- Location of warehousing facilities
- Number of warehouses
- Size of the warehouse
- Warehouse layout
- Design of the building
- Ownership of the warehouse
4. Packaging
Packaging is one major logistic function as it determines delivery success. Logistics or industrial packaging is a critical component of the physical distribution of a product and affects the efficiency of the supply system.
However, logistics packaging plays an important role in damage protection, case handling during materials, and storage space economy. The use of load has a major impact on logistics packaging in terms of packaging costs.
5. Material Handling and Storage System
One of the key supply management activities that cannot be ignored when discussing supply chain functions is material handling.
Material Handling and Storage System encompasses the movement, protection, storage, and control of materials and goods throughout manufacturing, warehousing, distribution, consumption, and disposal. It plays a pivotal role in optimizing logistics efficiency, product safety, and responsiveness. (Sople, 2007, p. 17).
· Material Handling: Encompasses unloading inbound goods, moving items to designated warehouse zones, facilitating order picking, conveying items to packing stations, and loading goods onto trucks for distribution.
· Equipment Types: Includes conveyors, cranes and hoists, forklifts, automated storage and retrieval systems (AS/RS), robots, and automated guided vehicles (AGVs) designed to handle unit loads like pallets and containers (Sople, 2007, p. 17‑18).
06. Transportation
For the movement of goods from the supplier to the buyer, transportation is the most basic and important aspect of logistics.
When an order is placed, the transaction is not complete until the goods are physically transported to the customer's location. The physical movement of goods occurs through various modes of transportation. such as road, rail, air, sea, or pipeline. It connects suppliers to manufacturers, warehouses, distribution centers, retailers, and ultimately end customers.
Companies choose their mode of transportation based on the transportation infrastructure of the country or region. Cost, time and speed are most important consideration when choosing a particular mode of transportation.
7. Information
Logistics is primarily an information-driven activity of inventory movement through a supply chain. Therefore, an information system plays an important role in providing superior service to customers.
The use of IT tools for identifying, accessing, storing, analyzing, retrieving, and decision support of information, which is essential among the functions of logistics, helps business firms improve their competitiveness.
CONCLUTION
Logistics is a fundamental part of any business, and it is crucial that all parties understand the importance of this function. Logistics is an old phrase coined during military times to describe the administration, storage, and movement of military personnel and supplies. Understanding the difference between supply chain management and logistics is crucial for businesses looking to streamline operations and enhance efficiency The "7 R's of Logistics" refers to the core principles for efficient supply chain management: These principles guide businesses in optimizing delivery, reducing costs, and enhancing customer satisfaction. The functions of logistics are work together to ensure goods are delivered efficiently and effectively to the right place at the right time.
REFERENCES
- Christopher, M. (2016), Logistics & Supply Chain Management, 5th ed., Harlow: Pearson Education.
- Coyle, J. J., Bardi, E. J. & Langley, C. J. (2016), Supply Chain Management: A Logistics Perspective, 10th ed., Boston: Cengage Learning.
- HKT Consultant (2025), Logistics Functions, adapted via Phantran.net, p. 1.
- Mentzer, J. T. et al. (2001), Defining Supply Chain Management, Journal of Business Logistics, 22(2), pp. 1–25.
- Sople, V.V. (2007). Logistics: Concepts, Processes and Practices. p. 17–18.
- A well-designed storage system supports fast order fulfillment by balancing accessibility and cube utilization, while material handling systems must complement storage layout for seamless operations (Sople, 2007, p. 17‑18).
- Ismail, R. (2008) Logistics Management. New Delhi: Excel Books, pp. 3-4
- Ballou, R. H. (2007), Business Logistics/Supply Chain Management: Planning, Organizing, and Controlling the Supply Chain, 5th ed., Upper Saddle River, NJ: Pearson (CSCMP definitions cited on p. 338).
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