Role of Logistics in Supply Chain

Taking the Order

The purchase order is central to any transaction between the parties in a supply chain. This document contains all the necessary details such as the technicalities of the product and commercial terms. Proper logistics ensures that this document is processed in time so as to ensure an effective performance cycle and to clear out any doubt about availability of materials and payment terms.

Inventive Inventory

An ideal inventory is one which has effective storage capabilities to ensure smooth supply but can also cut down cuts. Logistics ensures this minute balance between market opportunities and budgeting. More than often a poorly managed inventory can eat away a major chunk of the profit in a supply chain because it includes expenses for pilferage and insurance also.

The War is the Warehouse

The warehouse is the central nervous system in a supply chain and acts as the control room for everything logistical. An organization’s merit is determined by its effective warehousing decisions. Factors like location, number, size, layout and design plays a huge role in how the logistics of a supply chain will pan out.

The Tricky Nature of Transport

Transport is what keeps the supply chain moving literally and figuratively and it is the single most important component in the logistical side of supply chain management. The physical transfer of goods is the actual supplying process and it cannot falter by any means. The transport infrastructure should be carefully studied so as to ensure a fast delivery which is not too expensive. Determining the urgency of a supply is also important.

Mastering Material Handling

Material handling is an often ignored aspect when it comes to the role of logistics in supply chain management since lack of proper material handling often leads to damages and delays and incidental costs. The automation in the material handling process has been a boon for logistical productivity. The volume, speed and the level of service all must be taken into consideration to ensure that the material handling process goes smoothly.

Packaging Must Be Perfect

Logistical or industrial packaging is central to ensure the effectiveness of the actual physical distribution of a product. This directly affects the logistical side of a supply chain as opposed to product packaging which is governed by what the market needs. Logistical packaging can ensure minimal damage during material handling and save on important storage space. The packaging cost often depends on the utilization of the load.

Information is Incredibly Important

Logistics helps in transferring information across a supply chain and therefore an information system plays a crucial role in ensuring a superior service to customers. Information technology tools are constantly used to identify access, store, analyse and retrieve important data which can help a firm strengthen the function of logistics in their supply chain.

Logistics can be considered as a mundane and boring series of activities but it is behind the well oiled supply chain machinery that keeps any business up and running!