Many people do not know exactly what it is that a logistics company does day to day. The complex range of operations involved with moving and storing commodities from their original site to another desired location is essentially the work of a logistics company, explains a shipping container transport in Sydney, First Logistics.
A definition found on Google Scholar states, “Logistics means the activity of moving supplies (people, resources, stock and equipment) from one location to a storage facility at another chosen location.”
What does the word logistics mean?
The expression “logistics” began in the military, because of the importance of moving supplies and equipment to troops in the field. It also involved the disruption of the enemy’s supply routes because an army without supplies is vulnerable and exposed. Military logistics officers are responsible for the timing and method of moving resources to where they are most needed.
Logistics companies have become more and more important in the last twenty years, but their functions and relevance have not been fully recognized because a clear and accepted definition of the field has not always been available.
Why has logistics become so important?
Many small businesses concentrate on the design, production or sale of goods and services (or a combination of all three) that will meet the needs of their direct customers. However, if those commodities are not made available to customers at their point of need, then a business cannot succeed.
That is the essential role that logistics fulfills.
Globalization has made it vitally important to obtain resources from the four corners of the world and to distribute manufactured products all around the world. This has led to the creation of global companies whose job it is to manage the international transportation and storage of these resources.
We have all become used to “having what we want – when we want it” – a possibility that used to be restricted to the rich and famous. And we want a wide choice of products at a lower price than before.
This has caused a chain reaction and put pressure on the producers, wholesalers and manufacturers to provide top quality goods as quickly as possible, as well as responding to our every need and whim.
Added to this, is the importance that governments are placing on environmental issues and so logistics companies now have to be very concerned with recycling and utilization of re-useable containers together with the carbon footprint of their fleet of vehicles.
The basic idea of logistics is based on three main activities and the thorough planning involved that makes the supply chain flow smoothly. They are:
- Time and pace
It all starts with adding place value to commodities by transporting them from locations of lower value to locations of higher value for a customer. For example, moving bananas from the Caribbean (where they are in less demand) to Europe.
Time and Pace:
The next step is the addition of value to the products by storing them appropriately and moving them at the optimal time. So, moving produce from the place where they were harvested or manufactured, storing them and then taking them to a location where they can then be made available to the customer.
The overall step, that makes the supply chain work seamlessly, is the planning. For this, logistics companies need to observe patterns and add value to the products by organizing them according to demand – this includes sequencing the production, packaging and storing.
Logistics is simply the coordination of the sequence of activities or processes that obtain, produce and distribute goods, services or information to customers.
Within the logistical supply chain, there can be transportation carriers, warehouse operators and other specialized services.
Some logistics companies fulfill all of those services themselves or a large network of organizations can work together to deliver commodities to customers.
What are the components of logistics?
The management of logistics can involve some or all of the following business tasks, including:
- Incoming transportation
- Outbound transportation
- Fleet/Convoy management
- Supplies management
- Order completion
- Demand planning
To sum up
Logistics is the comprehensive organization and application of many complicated operations delivered smoothly.
That is what a reputable logistics company will achieve and hopefully all within the agreed time frame!
Of course one of the greatest logistics challenges must be that of Santa & his team – if you look at the overall operation, he has to arrange:
The fulfillment of orders, still received by handwritten letters in a lot of cases. The production and storage of toys – which involves the management of a workforce – albeit a small one or one of reduced stature. The delivery (which as we all know has to be completed within one night) to every household around the world.
Ok, there’s only one vehicle in the fleet & I’m not sure about its carbon footprint – but it’s probably low – apart from the methane that the reindeer’s produce.
And on that note, smallbusiness.co.uk has listed 5 things that small businesses can learn from Santa’s supply chain.