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What Is Logistics? Article Cover

What is Logistics?

Logistics is a very important term for many businesses. Being involved in a product or service’s processes, starting from production to delivery is and will be an important part of a company. So, what is Logistics?

Logistics refers to the overall process of managing how resources are acquired, stored, and transported to their final destination.

Logistics is about the flow and transportation of resources and the goods. This flow can be to another manufacturers, or it can be to the end customer. There are four major Logistics functions. These are:

Warehousing

It would be lovely if someone could just sell everything they produced as soon as the product is ready, wouldn’t it? But in reality, it rarely works this way. Most nonperishable products will need storage before they are ready for transportation or selling. Warehousing deals with that part of the journey.

Inventory Management

Inventory Management is a delicate issue that must be approached with attention. Keeping the inventory less than necessary could mean loss of costumers, which leads to loss of profit and also problems for long-term customer or business relationships. But keeping an unnecessarily high inventory directly increases storage costs. Therefore, it is an art to balance them.

Transportation

Transportation is the physical bulk of the logistics. There are several ways you can transport batches of products. Some are more expensive but faster(like air transportation) and others are less costly but slow(like with trucks). Of course, you will need to arrange different transportation options according to different customer needs. Of course, this can lead to different prices; but by that point, it becomes the customer’s decision.

Logistics Information Management

With technology, it is no surprise that Logistics have also changed. It is not only about physical processes anymore. Information has become one of the most important resources to manage over the years. Payment information, information about transportation and storage, and the data acquired from customers will constitute your channel knowledge. And channel knowledge is required for a successful and healthy logistics strategy.

In this article, we answered possible questions about what Logistics is. In our next articles, we will continue on this topic. We wish you a healthy day!

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