The purpose of logistics management is to deliver the right product to the right place at the right time. Logistics management tries to account for every conceivable contingency that could impact this delivery to the final customer. Originally, logistics was a term applied by the military to procure materials and deliver them to their destinations. Private enterprises have adapted these same principles to bring efficiency to the movement of merchandise.
What is Logistics Management?
While the primary element of logistics is ensuring the delivery of a product, logistics also serves many other functions. These functions include warehousing, inventory management, order fulfillment, scheduling and the coordination of other logistics providers. Additional functions of logistics management include customer service, coordinating with manufacturers, sourcing and procurement. Information technology is one of the most important parts of logistics management. Technology now allows businesses to locate a product any time of the day or night at any location around the world.
The goal of procurement logistics is to reduce the cost of products purchased by an organization and ensure the integrity of the supply process. A disruption in the supply process can greatly impact a business. For example, the late delivery of a supply needed to manufacture one item can result in a total work stoppage. If production stops, the chain reaction can reach the consumer if it is not resolved immediately.
The coordinator is a key member of the logistics management team in many organizations. The coordinator is in charge of expediting the best possible method for the movement of merchandise. The coordinator commonly uses shipping lines, airlines, trains and trucks to deliver the merchandise to its final location. Additionally, the coordinator must arrange for pickups and deliveries to different loading platforms. Timing is critical for the coordinator because one missed delivery can cause major delays for the entire organization.
Distribution logistics is the final component of logistics management that delivers the finished products to the customer. This distribution depends on where, when and how much of the product the customer wants. Distribution logistics includes warehouse management. Additionally, distribution logistics stores and transports the finished products to intermediate storage locations prior to customer delivery. Order fulfillment ensures the efficiency, reliability, accuracy and timeless of deliveries.
Brian Bass has written about accountancy-related topics and accounting trends for “Account Today.” He works as a senior auditor specializing in manufacturing and financial services companies for one of the Big 5 accounting firms. Bass hold a master’s degree in accounting from the University of Utah.