4 Reasons Why Businesses Should Use Logistics Management

4 Reasons Why Businesses Should Use Logistics Management

The word logistic comes from the military, however, it is widely used in various industries including business.  Logistics is the entire process of managing resources such as how it gets, stored, and transported to the final destination.

Logistics management involves distributor candidate selection, and supplier as well as determining its effectiveness and accessibility.  

Logistics Management

Logistics management is part of the supply chain process that is responsible for planning, implementing, and controlling product storage flow in an effective and efficient way. 

Additionally, it involves the information from the starting point to the consumption point in order to meet the consumer’s needs. Logistics management manages resources such as products, foods, or other consumer goods. 

In a business, logistics is needed in all industries. It aims to manage the outcome of the project life cycle, supply chain, and efficiency. As a business starts to become more complex and grow in a global market, logistics in business is also experiencing growth. 

Logistics management has two focuses in business, there are inbound logistics and outbound logistics. Inbound logistics is responsible for internal function, while outbound is for external flow starting from the initial point to the consumption point. 

Logistics focus on managing stock, purchase, transportation, warehouse, consultation, organization, and mapping the entire process. 

Logistics management can be broken down into four types, each covering different aspects of inventory management. Here are the types of logistics management.

Supply and Logistics Management

Basically, it involves the planning, procurement, and coordination of the materials needed at a particular location and time. For instance, the material transportation and the place to store them.  

Further, each step of the supply chain needs to be evaluated to ensure that consumer demands are met. For example, transporting the material to the construction location or spare parts for manufacturing companies. 

Material Distribution and Transportation

Material distribution and transportation include picking up materials and transporting them to the predetermined location. Additionally, the things that involve materials transportation such as unloading and loading, stock tracking, and how to use it. 

This type of management controls materials transportation from the main warehouse to the stores. 

Logistics and Production Management

Managing the process of combining stocks that are distributed into products requires coordination to understand what materials are required to manufacture products.

 It involves the supply of materials at the right time so that companies can make a product. This type is part of product management. 

Reverse Logistics and Products Return

Material reclamation and supply for production are managed by reverse logistics. For instance, when it comes to construction location, it will be about transporting leftover materials and returning to the warehouse. 

It also includes returning unwanted or unused  products of the final consumer who asked for a refund. 

Component of Logistics Strategies

The logistics strategy is a collection of guidelines to help coordinate planning, destination, and policies among different partners in the supply chain. The existence of logistic strategies helps supply chain performance and improve the entire supply chain management.

Logistics strategies have several components that need to be paid attention to by companies management. Here are the component of logistics strategies:

Transportation

The use of transportation strategies by companies should be checked to ensure they assist services optimally or not. If it’s not, you need to find another transportation.

Outsourcing 

You need to evaluate the outsourcing party that has been used in the logistics function, whether the third party can be trusted to improve the services or not. If it benefits companies to improve business performance, you also need to determine the next steps. 

Logistics system

Logistics systems have included organization networks, people, activities, information, and resources involved in products flow from suppliers to consumers.  A good system allows product flow more effectively and efficiently.

Competitor

Companies need to understand what competitors are offering to the market. Find their strengths and weaknesses, then compare them with your system. 

Strategy review

Review your strategy whether the outcomes have met the expectation or not. Identify which factors that can be optimized and find the solution for existing issues. 

The Importance of Logistics Management

Logistics management is a pivotal part in operating the supply chain. The logistics flow has a huge effect on the entire supply chain when it runs smoothly.

The right implementation of logistics management could assist companies to save time and provide customer satisfaction. 

Fast and safe delivery of goods to consumers is crucial for businesses. Here are several reasons why logistics management is important for business. 

Logistics management assists business in providing better services 

By implementing logistics management, companies can give better service for their customers. The right logistics management must be able to make delivery times more efficient.

Direct contact with customers will give you a competitive advantage, but only if companies meet customer expectations. Customers expect better service from companies, and the firm’s responsibility is to provide it.

The company needs to make sure that products and services are available in sufficient quantities, at the right time, and can be delivered as soon as possible.   

Improve supply chain transparency

One of the benefits you will get when implementing logistics management is having clearer visibility on the supply chain. Businesses need to be aware of everything that happens along the supply chain.

Understanding logistics will enable you to understand how the entire process works. Management parties can review historical data and analyze events in real-time, as well as get insight into how things can be improved and issues prevented.

The existence of logistics management can assist companies in reducing costs significantly by overseeing the supply chain.  

Enhance efficiency and reduce costs

A good logistics management will be able to improve efficiency and reduce costs. With better supply chain transparency, companies can discover when a supply chain is in trouble and which aspects are working.

The management can identify steps for reducing costs and further reducing expenses.  It will be able to control domestic or international delivery, in or out of the country. If there is a reduction in cost, then it will increase companies profit as well.

Increase revenue

Companies’ revenue can be increased by improving logistics management. If companies can provide better services to their customers, it will attract more business. Providing what their customers want and on time will also increase their brand reputation.

A poor logistics management will make products not available in the right time resulting in the customers or business partners being disappointed. The productivity will also be more optimized so the company can take as many orders as possible. 

Logistics can’t be ignored as if it’s not managed well, it will affect supply chains to customers. Implementing the right logistics management can be assisted by technology like location intelligence. 

Businesses can utilize business data analysis and location at the same time to determine the best logistics strategies. 

Optimise Your Business Operational with LOKASI Intelligence

Location intelligence is being used by transportation and logistics companies today to optimize their supply chains and reduce product delivery cancellations. 

Maps and spatial analysis are part of crucial factors in logistics management as they are able to assist companies to increase the operational efficiency and their business process. 

LOKASI Intelligence as a geospatial platform is capable of determining an effective and reachable warehouse, finding the best routes, and knowing “Ganjil genap” areas. 

Find out more about how we help businesses to grow their business by contacting [email protected]

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