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Logistics is of paramount importance for businesses to transport the finished products to customers. There are several processes to manage to ensure that the goods reach safely in the hands of the customer. This is where logistics management comes in. The role of logistics management is to guarantee the safe delivery of goods to the customer within the stipulated time.
Logistics management is handled by logistics management software which brings end to end visibility and real time tracking of products dispatched. This software is handled by a logistics manager hired by the company.
What is logistics management?
Logistics management is overseeing all the logistics functions including inbound and outbound transportation management, warehousing, order fulfillment, logistics network design, inventory management, supply/demand planning and management of third-party/3PL logistics services providers.
Benefits of logistics management
The benefits of logistics management are many. From managing the cycle time to successfully handling last mile delivery logistics processes will fail without an efficient logistics management system. Here are some of the major advantages of logistics management:
Benefit 1: Reduce operational overheads
Logistics management brings transparency and visibility to all logistics operations. Companies can now examine historical data and come up with an effective logistics management strategy and optimise routes to improve efficiency and lower fuel costs.
Benefit 2: Efficient product delivery
Logistics management’s primary goal is to ensure that the products reach the end customer on time safely. It streamlines processes and increasing efficiency by eliminating resource wastage and ensuring safe delivery.
Benefit 3: Improved customer experience
Customer service is important in logistics. Logistics management focuses on providing automated shipment tracking to all the customers. This reduces the number of customer queries, as he/she is given full visibility into the status of the product after dispatch from the warehouse/manufacturing facility.
Benefit 4: Demand forecasting
Companies using logistics management software can access data points of the all the logistics process including an accurate figure on how many products were sold and how many products were returned. Many software products are equipped to give graphical representation of demand forecasts to help you plan a better logistics strategy.
Importance of logistics management
Logistics management is the tether that holds all the logistics processes and key logistics activities together. This gives end-to-end visibility to all the logistics processes to avoid obstacles and deliver orders on time. Here are few areas where logistics management becomes necessary for businesses:
- Safe, timely and economical shipping
- Fast order processing
- Reducing the cycle time and lead time
- Delivery profitability
- End to end visibility of products in the supply chain
Features/ characteristics of logistics management
As mentioned earlier, logistics management involves the planning, implementation, and control of the movement and storage of goods and services from the point of origin to the point of consumption. Here are some of the key features of logistics management:
- Order fulfillment: Fulfilling customer orders from order placement to delivery is order fulfillment. It includes managing order processing, picking and packing, shipping, and delivery.
- Inventory management: Managing the flow of goods and services according to the demand levels of the customers is inventory management. It includes managing inventory levels, tracking stock movement, and preventing overstocking.
- Transportation management: Managing the movement of goods from warehouse to end consumers is transportation management. It includes rote planning, carrier selection, and scheduling.
- Warehousing management: Warehouse management is supervising the storage of goods in warehouses and distribution centers. It includes managing inventory levels, tracking stock movement, and ensuring that products are stored safely in the prescribed conditions.
- Supply chain visibility: This feature of logistics management provides visibility into the entire supply chain, including real-time tracking of shipments, inventory levels, and other analytical metrics. It enables companies to identify potential problems and address them to avoid delays in delivery.
- Customer service: Customer service ensures that customers receive their orders on time and in good condition. It includes managing delivery schedules, providing real time tracking information, and handling customer inquiries and solving their complaints.
- Risk management: This involves identifying and mitigating risks that could impact the supply chain, such as natural disasters, supplier bankruptcies, and geopolitical instability. This has been given a lot of focus after the pandemic when supply chain resiliency failed across the globe. Risk management includes developing contingency plans and ensuring that the supply chain is resilient and able to respond quickly to disruptions.
Types of logistic management
There are four main types of logistics management that supervises separate aspects of the logistics:
- Supply management
Supply management begins with planning to procure raw materials, procuring the materials and shipping them to the manufacturing facility on time. This time must be coordinated with the delivery timeline in case you are manufacturing a purchase order from scratch.
Once the raw material is procured it passes through the production process to transform into a finished product. Keeping track of where the raw materials are in the supply chain and then calculating the time of production can help you evaluate the delivery period.
- Distribution management
Order fulfillment and distribution is carried out with the help of outbound shipping. This includes the movement of goods from the factory to a warehouse and then to the vendor who sells it to the customers. Loading, unloading and transportation are the main processes involved in distribution management.
- Reverse logistics
In the event of product returns reverse logistics must be initialised. Once customer places a return, an executive must be assigned to collect the return and transport it back to the warehouse and eventually to the manufacturing facility.
Logistics management software
The advantages of having an effective logistics management system are many. All logistics service providers use logistics management software to execute their logistics plan and track the products in the supply chain.
Here are a few advantages of using a logistics management software:
- Automates order fulfillment process
- Organises inventory databases
- Optimises warehouse or distribution center management
- Optimises the physical movement of goods
- Access to logistics analytics
- Customer support service tools
Increasing sales in logistics is a key business goal for all. With efficient logistics management, there are greater chances of boosting sales and revenue growth for business.
Outsourcing logistics management activities
Many companies outsource their logistics process to logistics service providers. This helps them to get expert assistance for all their logistics activities and takes care of transportation, storage and last mile delivery. These service providers give customers a visibility into the status of the product delivery and can also handle customer queries with regards to the delivery. This helps companies reduce their workload.
If you are looking to outsource your logistics function, platforms like Tata nexarc’s Logistics can help you find trusted logistics partners that offers part truckload shipping at reasonable prices.