Why Logistics is Necessary
What is Logistics?
Logistics is a term that seems to get tossed around very freely. Majority of the population do not understand the actually meaning of it. However, for the most part, individuals do not properly comprehend the meaning of it. For example, I use to think logistics was only keeping track of inventory. When in fact, logistics is much more than that. It is the design and administration of systems to control movement and physically positioning of raw materials, Work-in-Process (WIP) and finished goods. Truth is, the most important factor is being able to acquire everything from raw materials to finished goods at the lowest total cost (not the traditional approach).
The supply chain team manages a plan, implements, and controls the flow and storage of goods. Look at it this way; it starts from the point of origin all the way down to the point of consumption where you are providing your customers with the final product.
Look at the diagram below:
In order for all of the operations to work smoothly, such as the diagram above, it is necessary to integrate and regulate activities such as Inventory Management, Materials Handling, Warehousing, Transportation, Order Processing, Manufacturing, and Customer Relationship Management (CRM).
If you are interested in learning more about these topics, let me know and I will explain in further detail
Does Logistics add value to a company?
There are three main reasons why logistics is essential:
To be able to move materials and finished goods from the supplier to the buyer (the company).
Must be able to move those materials and goods between different echelons of the supply chain internally and externally. Furthermore, this mean that at each phase or echelon that exists (from one supplier to another, etc) will get the products one step closer to the customer.
Being able to move finished goods to the costumers whom benefit from the product.
In the end, without logistics, products that we use such as water, food, clothes, books, Band-Aids, etc, have little to non-existent value to the customers if they are not moved and placed directly at the customer’s point of consumption. This includes retail stores like Wal-Mart, Best Buy, Macys, Starbucks, etc. In order for the supply chain to meet its objectives, the products must be delivered at the right time and the right place. Overall logistics makes our life easier.
Illustrate And Motivate,
Johnny Garcia