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What is Logistics Management? Overview, Types & Process

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5th Sep, 2022
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What is Logistics Management? Overview, Types & Process

Introduction

The supply chain is an extensive process that works across multiple levels to produce and distribute goods. From manufacturing raw materials to shipping final products, everything works around a supply chain. There is a constant need for transportation and supervision, especially after operations on the supplies begin. For everything to be effectively processed on time, the logistics management department plays a key role in planning the schedule for managing the operations.

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The absence of logistics could add problems such as constant shipment delays, inappropriate storage units, and ineffective product returns. However, if logistics and supply chain management are correctly integrated, material movement becomes easy and hassle-free. Plus, businesses can also grow their efficiency effectively. 

Therefore, if businesses and companies do what is required to ensure logistics management, they can witness a definite spike in revenue and growth in the upcoming years.

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What is Logistics Management?

There are numerous processes within the supply chain of which logistics management is a part. It primarily focuses on planning, storing, organizing, and transporting goods. The goal is to conduct operations from the start until the very end to ensure customer satisfaction. Logistics management is a broad and detailed subject that includes many sub-processes. 

It is also an aspect of logistics management to acknowledge that the products have safely made it to the destination, thus significantly reducing costs and ensuring the convenience of operations.

Logistics management is an extensive process that starts with the shipping of raw materials and ends when the final product reaches the customer. The whole process might prove to be cumbersome, and thus, project managers need to work on creating strategies and plans that help them effortlessly get through the different steps.

The key elements of logistics management are: 

  • Looking for helpful delivery methods
  • Using automated software to minimize standard workflows
  • Considering vendors that offer the best transportation facilities
  • Figuring out the best ways of transportation

Logistics managers need to pay equal attention to all elements to keep issues at bay. For instance, if your transport facility is faulty, the shipments will be adversely affected and result in delayed deliveries. The consequences of such poor facilities could leave you with clientele dissatisfaction and additional expenses. Having said the setbacks, companies and businesses need to educate themselves about the different types of logistics management properly.

Types of Logistics Management

Mainly, there are four types of logistics management, and each of these types focuses on individual phases of the supply chain. 

1. Supply Chain Management

Supply chain management is the process of ordering, planning, and receiving raw materials that require urgent delivery. As logistics managers, it is their responsibility to find the most appropriate transportation that delivers the end products within the deadline. They are also responsible for transporting items based on their volume and taking accountability in times of failure.

2. Distribution Management

After goods are transported to storage units and distribution centers, managers must acknowledge their delivery by confirming their destination location. This process is very time-consuming as it involves loading and unloading items before they finally make it to the retail or grocery stores.

3. Production Management

Production management is mixing raw materials and different components to create the final product. To create the final product, a thorough search for the required materials is needed. Therefore, managers should oversee these processes and align the shipments with the production schedule to avoid delays in conducting operations.

4. Reverse Logistics and Product Return

In post-production, the residual generated, which consists of unused raw products, must be taken care of. Plus, in the case of customers returning items to the company, product managers need to arrange for resources to carefully verify the refund, cross-check the file, and manage pickups so that products can get back to the inventories.

The 4 Logistics Management Processes

To eradicate these issues, applying logistics management at the supply chain levels could help.

Inventory management

Having an inventory space is crucial for every business to stock their stores and products. If it isn’t supervised, inventory management could suffer huge losses. Thus, a constant check on needs to be put in place while placing, receiving, and maintaining orders. Managers should consider tracking details, order lists, return of damaged goods, and company budget. Inventory management consists of 61.3% forecasting, 46.8% logistics, and 50% warehouse management. 

Facility Processes

It is an arduous task to manage a logistics facility, and it comes with its own set of challenges. Workplace hazards are prevalent and can impact employees significantly. Lack of facility management will lead companies toward non-compliance and insufficient operations.

Order Demands and Fulfillment

After a customer successfully places an order, logistics managers need to supervise shipments to ensure fast delivery. While this could work when orders placed are minimal, it could be complicated to deal with bulk orders, and also extremely challenging. To overcome this problem, management should implement mechanisms that will help to track orders regardless of their volume. Storing order details, maintaining records of payments, and checking and recording stocks are some of the mechanisms that can be implemented.

Warehouse Inspection

Warehouse inspection is the final step in the logistics management process. It involves conducting weekly and monthly checks on vehicles to ensure a hazard-free workplace. It also helps carry out audits to supervise whether the companies in context are abiding by regulations.

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Conclusion

There are many levels to supply chain management, and acquiring control could be tedious. With the help of robust logistics management, operations become effortless to track and deadlines become achievable. In addition to that, it also helps in promoting customer satisfaction and maximizing profits.

Transportation and logistics activities currently contribute 12% of the global GDP. Therefore, having functional logistics management helps approximately 50% of companies to build a more robust supply chain and logistics operation. 

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Sandeep Pereira

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Responsible for working with the various teams and other management to establish long-range goals, strategies, plans and policies and set up new programs at upGrad. With a demonstrated history of working in the EdTech industry.
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Frequently Asked Questions (FAQs)

1How is logistics and supply chain management interrelated?

Logistics and supply chain management work separately. The former is a subset of SCM. Supply chain management builds plans. It is wholly responsible for implementing and controlling the raw materials and goods. All of these measures contribute to meeting customer satisfaction. Logistics management, on the other hand, is spread across different industries. The main aim of logistics management is to work with the supply chain. Presently, business logisticians have become supply chain logisticians since businesses are constantly evolving and becoming complex.

2What are some of the tips for intelligent logistics management?

As mentioned earlier, logistics management is a complex process and requires extensive planning. Therefore, knowing some tips to build smart logistics could benefit you in the long run. Automation makes any workflow very effective and efficient. With the help of task automation, tracking, delivery, and monitoring can be enhanced. The next tip is to learn from the mistakes you made initially. Managing logistics is a tough nut to crack, and you can’t expect to excel immediately. However, learning from the mistakes you committed previously and taking feedback from them could be useful. Third, and the last tip is always to have a plan B, regardless of how bullet-proof your current plan is. Sometimes, when you aren’t ready, things don’t work out, and that’s when you have to understand the importance of having a backup.

3How do project managers help in logistics management?

As a project manager, understanding the usage of a project management software tool could help collect, organize, and transport items from one place to another. From effectively tracking the efforts using kanban boards to maintaining reports in the dashboard, working with a project management software tool makes things effortless.

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