Logistic Business is a set of services necessary for manufacturing products and their marketing in a given territory. This involves all the means and methods affecting the organization of service and the material flows before, during, and after production; the movement of products and services from its manufacturer, in quantity and within the time requested, and at the best cost, thus, ensuring the logistics of a product is taking into account. This process contributes to the control of physical flows, to coordinating resources and opportunities by seeking service at the lowest cost.
Hence, logistics activities are concerned with the areas of production, supplies, storage, and distribution of goods and services. They are mainly practiced in industrial and commercial companies, but also in logistic providers and within consulting firms. These activities are today confronted with the intensification of competition and the wide enlargement of the rules of social and economic functioning across the world. Besides, technological advances are also rapidly changing transport equipment, handling, and storage. These economic and technical changes are reflected in concentrations of businesses, new customer needs, and the arrival of logistics providers and transport operators.
2. Logistics and Supply chain management
Logistics is the field of activity whose purpose is to ensure proper management of the routing and storage of raw materials, semi-finished and finished products, from sources of supply to the end customer, passing through the different transformation and transfer points. A logistics company, however, is saddled with the responsibilities of planning, implementing, and control of the movement and storage of goods, services, or information within a supply chain and between the points of origin and consumption.
The supply chain, therefore, represents all stakeholders – suppliers, carriers, processors, distributors, service providers, warehouses, retailers, etc. – who help get the right products to the right place, at the right time, in good condition and at the best price. All these factors contribute to achieving the best possible cost. Some logistic companies handle some or all of these supply chain functions, depending on the client’s logistical needs and agreement reached.
For a company, logistics management often comes down to:
- Anticipate the demand for its immediate customers.
- Process their orders.
- Stock up on products or raw materials.
- Deliver the ordered products.
However, the concept of supply chain management goes further, because it involves taking care to integrate the needs of our customers’ customers to the end consumer and the needs of suppliers from our suppliers to the supplier initial of raw materials.
The supply chain can also be seen as a network of organizations that runs from the upstream to downstream, engaged in activities that create value for the end customer. The integration of the supply chain emphasizes the following elements:
- Integration between the supply, inventory management, and distribution functions of the same company.
- The integration of chain players – suppliers, manufacturers, distributors, and retailers.
- The design of innovative reverse logistics solutions – product recycling, management of waste, and recovered materials.
- The coordination of activities having been outsourced to logistics service providers.
1. Areas of Intervention in Logistics Business
In the field of logistic business, there is a great temptation to propose best practices that companies could hasten to copy to reach the performance levels displayed by the best. However, the best companies often took several years to reach the performance levels that were so jealous.
Besides, practices that work in one context may be disappointing in another. This is why it is preferable to approach the question from the angle of intervention, which includes practices that can give excellent results depending on the contexts in which they are deployed.
Hence, below are the four proposed areas of intervention:
- The configuration of logistics networks.
- Integration of the supply chain using information systems and the adoption of innovative organizational structures.
- The establishment of collaboration mechanisms.
- Optimization of logistics processes.
Getting into a logistic business is not difficult, but staying successful can be challenging, especially when your business plan, finances, and recruitment strategy are not solid at the beginning. That is why it is important to consider the reliability of a logistic company before hiring their services. Thus, you can get world-class, reliable logistic services