Importance of Logistics to Supply Chain

Logistics is one of the most important factors of supply chain management.  It is the basic factor of success for each company and evolves in all the operations happen in the business. By the cargo volumes grow and transportation becomes more difficult; the requirement of logistics is rising. The process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services and related information from their point of origin to point of consumption for the purpose of satisfying customer requirements. Logistics aligns the complex pattern of traffic and transportation, shipping and receiving, import and export operations, warehousing, inventory management, purchasing, production planning, and customer service. Companies see logistics as a critical blueprint of the supply chain. It is the procurement, supply, maintenance, and transportation of equipment, facilities, and personnel.

By creating partnerships with suppliers, shipping services and warehousers, and connecting these services through automated systems, the logistics of getting products to the consumer are improved with reduced overhead costs and faster delivery. Understanding how the logistics system theory works require strategic planning when calculating what will be needed while focusing on obtaining materials and managing how quickly products are produced to help ensure swift delivery to the consumer. Component of a good logistics include:

  • Customer satisfaction: Customer service satisfaction has become a basis on which companies drive business growth and profitability, using the best transportation system strengthens performance trade-offs to reduce shipping costs and ensure timely delivery of goods. These processes and systems are integral parts of a solid logistics management system, emphasizing the importance of warehousing and transportation for customer service excellence for end-user product delivery.
  • Fast delivery: Today’s world economy is connected through social media and the Internet and has raised customer expectations for faster product delivery. Developing logistics strategies that embrace these expectations requires companies to look at things like the physical location of warehouses and the use of sophisticated software systems to receive purchase requests within a matter of of seconds rather than days.
  • Saving Cost: Cost savings is created by reducing warehousing costs and purchasing based on supply forecasts, better inventory management, reliable shipping and timely delivery to the end-user.
  • Long term goal: Logistics helps companies understand the key metrics, core processes and long-term goals of their supply chain so they can get the right item to the right place at the right time. To meet these expectations, companies have to improve the logistics of their supply chain to expedite order fulfillment and quickly ship the item via the most reliable, yet cost-effective and timely means.

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