Why is logistics so important to Supply Chains?

Logistics plays an important role to keep the supply chain strong. It plans, implements and controls the flow and storage of goods and services to meet customer’s requirements. Logistics can spell the difference between success and failure in business. During times when freight volume grows and transportation becomes more complicated, the need for logistics management rises. Employees who know how to manage logistics can lead to increased profits. 

Some main duties within logistics include:

1. Production Logistics –Production logistics activities are related to organizational concepts, layout planning, production planning, and control.

2. Distribution Logistics – The process of distribution logistics consists of order processing, warehousing, and transportation. Major sub-sectors within the industry include air, rail, water, and truck transportation, urban transit and ground passenger transportation, warehousing and storage, and motor vehicle repair. Logistics involve the integration of these sub sectors, including information, transportation, and inventory, warehousing, material-handling, and packaging.

3. Disposal Logistics – This is also known as reverse logistics, stands for all operations related to the re-use of products and materials. The main purpose of this field is to reduce logistics cost, enhance service, and save natural resources.

Growing Influence of Logistics

There are several reasons for the growing influence of logistics in business strategy. Included among these are:

1. A rise in options for fulfilling cost and service standards—air freight, minicomputers, containerization, and international satellite communications systems.

2. The stress on effective inventory management through full business cycles distinguished by volatile rates of increase in labour costs, changing sale prices, etc. 

4. Closer scrutiny of the long-standing trend toward complex product lines. To a greater extent, the threat of material shortages is injecting logistics as opposed to marketing considerations into decisions of product range.

All these pressures are leading many companies to reexamine their view of logistics.  

Conclusion

No matter the size of a business, the concern for logistics can significantly affect the supply chain. It requires professional management. Supply chain professionals need to have the necessary skills and knowledge to run the supply chain smoothly. This is why businesses need to invest in proper Supply Chain Management System. 

Contact Crystal Link Technology today to find out how we can resolve your logistics and supply chain problems!

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