July 19, 2024


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Logistics: What are the Major Elements of Logistics?

Quản trị Logistics (Phần 1) - Quản Trị Doanh Nghiệp

Logistics are very helpful when you have your own business because it is the overall process of managing how your resources are acquired, stored and transported to the destination that you want it to go to. They involve identifying the prospective distributor and the suppliers so that you could determine their effectiveness and accessibility and you could get your freight transported safely by Surelogix logistics company for quality and trustworthy service. So, what are the major elements of logistics?

What are the main functions of logistics?

  1. Order Processing

The purchasing of orders placed by a buyer to a supplier is such an important legal document of the transaction between both worlds. These documents have the description and technical details of the products to supply, proce, delivery period, payment terms, taxes and all of the other terms as agreed.

The ordering process consists of the following steps:

  • Order checking for any deviants
  • Prices, payments, and delivery terms
  • Checking the availability of materials in stock
  • Production and material scheduling for shortages
  • Acknowledging the orders

2. Inventory Control

Inventory management and inventory control is important in keeping enough inventories to meet customer requirements and carry costs in case it goes south. It is striking the balance between the customer service for not losing the market opportunity, and meeting the cost at the same time. This is the greatest culprit in the overall supply chain of a firm since because of its huge carrying cost, it indirectly eats away the profits.

  1. Warehousing

Warehousing is the storing of the finished goods until all of your products are sold. It is vital in the logistics operations of your business. Warehousing is treated nowadays as switching facilities rather than a storage of improper warehousing management.

Major decision in warehousing are:

  • Number of warehouses
  • Warehouse layout
  • Ownership of the warehouse
  • Design of the building
  • Size of the warehouse
  • Location of the warehousing facilities
  1. Transportation

When an order is placed, you are going to have to complete the transaction by physically moving the product to the customer’s place. The transportation costs vary from 65 to 70 percent of the budget and these firms could choose the mode of transportations depending on the infrastructure of transportation they have in their country and/or region. 

  1. Material Handling and Storage

An improper method of material handling would add to the product damages and delays in delivered and incidental overheads. The mechanization and animation enhances the logistics system productivity. 

The storage system on the other hand, is important for the maximum space utilization depending on the size of your warehouse. Material handling system should be able to support the storage system for smooth sailing movements of goods in and out of the warehouse.

  1. Logical Packaging

This is a critical element in the physical distribution of the products that you are selling, which then would influence the efficiency of the logistics system. It would differ from product packaging and is based on marketing objectives. They play an important role in damaging protection, in case there would be problems in material handling and shortage in space.

  1. Information

Logistics is information-based, which is why information systems play a vital role in delivering a superior service to the customers. Using IT tools for identification, access, storage, analysis, retrieval, and decision support is vital among the functions of logistics.

What are the five levels of logistics providers?

  1. React

This is characterized by autonomous departments like sales and manufacturing, driving logistics priorities, and disparate disconnected systems. In short, these are the logistics services offered to customers that require little coordination.

  1. Anticipate

Centralization of the logistics functions would be the beginning of improved efficiency and productivity. At this level, there is a focus on creating standardized processes and methods that could benefit from the economies of scale and the increase of efficiency.

  1. Integrate

In this level, the productivity enhancements and cost reductions are achieved through the connections to the supply management and third-party logistics providers so integrating with the supply chain is important.

  1. Collaborate

By this stage, your logistics management is an important part of a shared supply chain management vision, with trade-offs between the profitability and customer value. 

  1. Orchestrate

Information flows across the supply chain network in real time with the help of the logistics and the rest of the supply chain facilities which processes across the community of partners to capitalize with, giving you unique business opportunities.

What are the three types of logistics?

  1. Inbound Logistics
  2. Outbound Logistics
  3. Reverse Logistics