Logistics is a science of encompassing the process of transport, packaging, storage, information, material handling & stock management.
Logistics is of a huge significance for a business to be successful in its activities. Through logistics, companies can plan the distribution of the necessary materials and supplies to take place effectively. The concept of logistics is fundamental for any business. With proper planning and control of the materials and of the times & processes, the company can ensure huge profits. Business logistics has as its primary objective to place the product or materials that are available at the right place and time, trying to make the storage process, distribution and delivery as efficient & profitable as possible.
Every business would focus on the satisfaction of its customer, making the delivery in the agreed time and without any damage. Perhaps that’s the reason why this process should be profitable, optimizing time costs, using the minimum possible resources. In most cases, each company in this world is working in a specific activity sector. That’s why each business offers a specific product & addresses a specific target. Therefore, there are different types of logistics solutions depending on the company and their particular needs in terms of planning, control and distribution of their merchandise. So let’s dive in;
Logistics of Provisioning
The supply logistics influence decisively in the operation & success or failure of a company. The primary objective of this type of logistics is the control of supplies in order to cover the needs of the company’s operating processes. While dealing with this, here’re a few significant factors that must be taken into account;
Types of packaging & loading
- Delivery Dates
- Suppliers Selection
- Inventory models
- Product Demand Forecast
- Service Quality
The distribution logistics includes management of physical flows that are known as DFI – Stands for International Physical Distribution and DFN – Stands for National Physical Distribution. This type of logistics is responsible for the goods & materials present in the inventory along with the purchase of the items and their shelf life. Each company will set a distribution system as per their resources & needs along with the requirement of their final customer – the one who ultimately receives the merchandise. Here’re a few variables that distribution logistics include;
- Storage Logistics
- Activity Forecast of the storage & logistics centers
- Transferring goods inside the warehouse
- Cost, expiration & quality of the products
- Preparing orders
- Transporting to the customer
Production logistics is responsible for controlling what will be produced, assessing the need of the market and thus avoiding waste. This planning is essential for the company to continue growing and yielding profits. Besides, the production logistics also involve the management & control of logistics at the domestic level, at the level of supply within the company itself.
To improve the effectiveness & efficiency of the process, it is normally based on management decisions. This way, the same results will be obtained at a lower cost thereby turning up lucrative for the companies.
It’s also known as Inverse Logistics. With this type of Logistics, companies can rescue materials & products giving the correct disposal or reuse. Reverse Logistics works in several different ways:
- Relocating new products just because the customer has rejected the stock
- Rescuing the raw material
- Reintegrating & recovering products used
- Disposal of used & broken products in correct locations
Precisely, reverse Logistics is all about removing and reallocating new products rejected by the customers. If a client buys products and is not satisfied, he/she can return it within seven calendar days and have the money returned. The e-commerce industry is pretty much aware of this law and establishes ways to redeem products returned, with the same efficiency as the delivery.
The same way, Reverse/Inverse Logistics works on the recovery of raw material not used and can’t be discarded in any place or perhaps must be returned to the company that supplied it. The recovery of materials & products used is also done by Reverse Logistics, which does this job more common in recycling companies for example.