Logistics, or the organization and implementation of sophisticated operations, is very essential in a business sense. It is a company’s management of the flow of products and services between an origin and consumption. Logistics also points to the curating of materials, equipment, supplies, and consumable items. In terms of its impact, this field is important in bringing a competitive advantage to companies, increasing profits through the coordination of activities, reducing costs, and ensuring all the links in the supply chain are working effectively.
Logistics management can give ventures an edge if done right. However, there are many elements that need to be paid attention to in order to gain this advantage. The best logistics management provides better assortment planning and item categorization, proper procedures for supplier evaluation, excellent performance measurements and communication, a framework for the management of exceptions, and continual education and knowledge sustainability (“How Effective Supply Chain Management Gives Your Company the Competitive Advantage”). The rapid growth of technology, especially in the transportation sector, might make this competitive advantage more and more pronounced.
With the proper planning of the supply chain, an organization can increase its profits. According to the website Cerasis, which focuses on industry advice about logistics, “A supply chain operative should be able to devise the flow chart for the whole operation. The purpose of planning is to attain maximum work in the least possible time. At the same time, the planning should aim at maximizing the profits” (“6 Important Tips For Effective Logistics Management”). This type of management will also reduce stress on workers, as they will have more time for other things than their jobs, as they will complete tasks faster.
Logistics management often focuses on cutting costs. This is done by consolidating shipments, having cargo insurance, employing one integrated platform, outsourcing, having supply chain visibility, implementing an optimized use of resources, and timely planning (“Strategies for Reducing Logistics Costs and Supply Chain Costs”). In turn, many organizations hire companies to run the logistics management for their ventures. This may cut costs in the long run.
From the point of origin and to the consumer’s hands, the flow of supplies needs to be streamlined. As stated by the website The Balance, a small business portal, “…whoever manages your supply chain will be responsible for managing freight forwarders, shipping companies, parcel delivery companies (like FedEx and UPS), customs brokers and third party logistics providers (3PL). The arena of supplier management includes the cost of goods negotiations, on-time delivery management, quality audits and management, new product development — to name a few areas of focus. Your supply chain team will work with your suppliers’ customer service teams, engineering teams, quality teams and even supply chain teams” (Marion, Gary). As you can see, a lot goes into managing one’s supply chain, and each part should be given the focus it deserves.
Logistics management as the way a company organizes its operations has a great impact on businesses and consumers alike. Namely, this part of a company provides a competitive advantage, increases profits through the coordination of activities, reduces costs, and ensures that all the links in the supply chain are working properly. Without appropriate logistics management, a company would invariably sink into losses in profit and influence.
“How Effective Supply Chain Management Gives Your Company the Competitive Advantage.” AGR Dynamics, 16 Nov. 2018, agrdynamics.com/2018/10/25/scm-competitive-advantage/.
“6 Important Tips For Effective Logistics Management.” Cerasis, 7 May 2019, cerasis.com/effective-logistics-management/.
“Strategies for Reducing Logistics Costs and Supply Chain Costs.” A & A, 2 Nov. 2016, www.aacb.com/reducing-logistics-costs-supply-chain-costs/.
Marion, Gary. “Logistics and Supply Chain Management.” The Balance Small Business, www.thebalancesmb.com/logistics-4161402.