What is Logistics Management and Why is it Important

Logistics is widely known as the process of arranging and moving resources from one place to the desired destination, such as equipment, food, fluids, inventories, materials, and people. Initially, this was a military phrase used to describe how equipment and supplies were obtained, stored, and moved by the military.

Logistics is the management of the movement of items between the point of origin and consumption in the supply chain and commercial sense to satisfy the needs of customers and companies. The logistics of the above resources include production, packaging, warehousing, transport, security, material handling, and flow of information.

What Is Logistics Management?

Logistics management is part of the supply chain management system that plans, implements, and monitors the efficient flow and storage of the products, services, and related information to meet client requirements.’ Logistics management is primarily the control and supervision of commodities movement. The breadth of managed processes nevertheless goes well beyond that.

It covers various elements, including transport management, freight and inventory management, the processing of commodities, and order fulfilment. In the end, proper logistics management includes optimization methods for maximizing revenues, reducing manual work, making informed judgments, and surpassing clients’ expectations. However, to make these processes easily achievable, you can adopt a transportation management system like Rose Rocket that allows you to enhance your logistics management to ensure that the products are delivered within the budget and on time.

Types of Distribution Logistics

Transportation management includes a broad range of distribution activities. These activities focus on the effective distribution and transportation of final items. In essence, this procedure transfers commodities to consumers from one end of a production chain. You must carry out a successful operation in three primary areas:

Order Fulfilment

Any successful business owner will tell you that priority No. 1 is customer service. But to provide your consumers with a good experience, you must help them with the final product in the most effective way possible. This stage of the distribution process is known as the completion of the order. It all includes shipments to merchandising and beyond. Its four primary areas are:

  • Time for fast output
  • Transaction Efficiencies
  • Reliable supplies
  • Effective internal communication and external communication

Warehouse Management

It’s not just transportation services that you have to deal with when it comes to distribution. A critical part of your operation is the management of storage space. But that is just one element of the jigsaw that you have to solve to discover a facility with enough inventory space. Regarding warehouse management, you will have to supervise an operation that drives and stores items through a distribution centre, cross-dock, and inbound warehousing.

During this procedure, you will need to plan your warehouse intelligently. In addition to having suitable storage space for products, you must also position your equipment in regions that do not interfere with the transport of such items. And you must make sure that your co-workers have adequate area to work securely and pleasantly. With an efficient storage system installed, you create sufficient room to move things quickly from one step to the next.

Transport Management

This is the final distribution stage. Transport management seeks to determine the most optimal transport source for the transport of products. This procedure covers the management of all transportation, both inbound and outbound.

Transport management includes the carrier’s overall network architecture and traffic level. With an effective transportation management plan in place, your customers will benefit from more stability, visibility, and control of their transport costs and functions.

Importance of Logistics Management

Enhanced Client Satisfaction

Consumers require better service hence require the shippers to deliver quick, accurate, and high-quality service. Good logistics management strategy strives to optimize transport processes consistently and eliminate disturbances. It, therefore, has a direct impact on the satisfaction of your customers.

Improved customer service can provide the brand a good reputation and help to build more revenue. A well-ordered and efficient cargo transportation process can contribute considerably to customer experience and exceed the expectations of shippers. Well-managed logistics ultimately adds to a better overall client experience.

Enhanced Visibility

It is crucial to create visibility throughout the supply chain of a corporation. Advanced transport management systems (TMS) analyse past data and track commodities movement within and outside enterprises in real-time. Logistics managers can use this information to inform optimizations and avoid disruptions. TMS data analysis keeps the supply chain of a company operating more efficiently while acquiring operational information. 

Savings in Cost

Efficiency logistics will enable a company to monitor incoming freight, maintain an optimum inventory, organize the reverse flow of goods, and use cargo movements in proper transportation methods, which can greatly reduce costs. Inbound freight can account for approximately 40% of the total cost of the supply chain. Proper logistics management enables shippers to take advantage of hidden saving opportunities.