800-328-1955Logistics refers to the management of the process by which resources are moved from the point of origin to the point of consumption. For example, if your company produces a widget, logistics refers to the management of how that widget gets from your manufacturing location to the customer who has bought the widget.
Logistics, or successfully managing the movement of resources, normally requires the establishment of a distribution network, among other things. Logistics are very important to every company and it is essential that you have the right professionals managing the movement of goods and materials that are used or sold by your business.
Understanding Logistics
Logistics typically involves integrating many different things in the supply chain and distribution process. For example, managing the transport of the physical goods you sell involves:
- Integrating the flow of information
- Materials handling
- The production of the goods your company is selling
- Packaging of your company’s product
- Inventorying the products that are currently produced, available and ready to be sold or distributed to customers
- Transporting products to consumers/end users or to nodes within your distribution network
- Warehousing of inventory
- Security to protect the materials and goods during the process of production and distribution
In order to run a successful business, you need to ensure that you have a reliable distribution network and that you handle your logistics well. The process of making sure that the goods you produce get to customers is also referred to as supply chain management.
Why is Logistics Important?
Logistics is important so your business can fulfill its aims, provide quality products to consumers and make money.
If there are any problems with your supply chain or with the management, transport and distribution of the products your business sells, this can cost your company customers and money. For example, if you don’t package an item correctly or if you don’t have a reliable transportation company so your products are late being delivered, you could end up with unhappy customers. Those customers won’t purchase from you again and could leave you bad reviews about your product, which hurts you with future customers who might otherwise have been interested in buying from you.
If there are problems with managing inventory, on the other hand, you might end up with too few products to fill orders or with too many products such that they are wasted and go unsold.
Transportation and security problems can also wreck havoc on your business, as you could end up with broken, damaged or stolen goods.
How to Be Successful at Logistics
To ensure your company is successful at logistics, you need to have the right professionals handling the management of the flow of resources and products. For many businesses, outsourcing many of the tasks can make a lot of sense. Working with a third party warehousing company that also handles transportation, for example, can be a very smart choice as you can rest assured that professionals are taking care of your supply chain management and using their expertise to do so in the most effective way possible.
