The Role of Logistics in Supply Chain Management

The Role of Logistics in Supply Chain Management
  • Opening Intro -

    For many consumers, all they need to know is whether a shop has their desired item in stock or not.

    It can be frustrating waiting for inventories to refresh, shipping to complete, and for sales to roll around.

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The reality of making these end-user experiences happen, however, is so much more complex than most people realize. Understanding the role of logistics in supply chain management is something every consumer should attempt—even if for no other reason than to give their favorite local stores a little more credit for their hard work!

What is Logistics

While most people equate logistics to shipping products, the ideas are not as exclusively connected as many believe. Moving goods around a country or even globally is the result of proper logistical planning.

The term refers to a complex study concerning efficient ways to organize and actively manage large groups of subjects.

Besides detailing the route of the items or equipment that are potentially being moved, additional details include the equipment needed to haul and maneuver items and the essential roles of every individual involved in the process.

It should be no surprise why logistics is a favorite term of commercial employees, but the same study can be applied to any operation with many moving parts.

Basics of Supply Chains

If logistics is the conceptual system of how to manage multifaceted operations, then supply chains can be thought of as the living, breathing proof that it works.

For most businesses, there is no one-stop shop for all their merchandise and packaging needs—hence the requirement of a chain rather than a single line of delivery.

Supply chains can be thought of as a web in which different companies cross-communicate their needs as well as goods. Besides getting goods back and forth, companies also must work within carefully constructed time frames to ensure components arrive around the same time.

The final part is especially important as poorly timed, and unreliable supply chains mean key components of products may arrive early or late, thus creating a backlog and a waste of space.

How They Work Together

Imagine your beverage company ordered a batch of wholesale glass bottles and fresh ingredients to create a fresh batch of kombucha. Without proper organization, the fresh fruit would arrive weeks before your bottles and labels.

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Your investment is ruined because somewhere in the planning stage the vital details of timing were neglected. As such, the role of logistics in supply chain management is the crucial key that causes the moving of goods to make sense and work like a well-oiled machine.

The success of a supply chain is entirely dependent on the organization of a logistics plan. The success of the logistical strategy is completely dependent in turn on the stability of a well-arranged supply chain. Logistics and the chains it manages are inseparable entities.

Image Credit: role of logistics in supply chain management by twenty20.com

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