Logistics
The goal of logistics is to find ways of rational product management along the supply chain from the producer to the final recipient. This process is quite labor-intensive and involves the control of a list of actions from the organization of marketing and receipt of orders, to the establishment of the production process, storage and development of optimal transport routes of delivery.
Logistics explained
Logistics is the management of commodity, financial and information flows. It is a true philosophy of prosperous commercial activity. The manufacturer (supplier) wants to organize the process of production, storage and delivery with minimal costs and maximum profit. In turn, the customer (buyer) intends to pay only for high quality goods at a reasonable price at the right time with a decent quality of service. The task of the logistics expert is to find a way in which the demands of the supplier and the buyer meet.
If both parties are satisfied, then the goal of the logistics has been achieved.
Logistics functional areas
Infrastructure. It involves a set of facilities directly related to the supply chain. The list of functional responsibilities and their geographical location differ:
- raw material sources near the manufacturing plant;
- warehouses for storing finished products near distribution centers;
- transportation routes used to deliver products;
- financial institutions that facilitate cash transactions.
Complementary functioning of the systems described above is impossible without a well-functioning information flows network.
Transportation. A fundamental link in the logistics chain is the arrangement of uninterrupted transportation between the main points. Road is used most often, but rail, sea and air transport is less common.
An important condition is to ensure the quality and safety of the cargo during delivery. The main objectives of transport logistics:
- creation of transport corridors;
- laying of rational routes;
- selection of appropriate types of vehicles;
- adjustment of production and storage activities to the process of shipment and delivery;
- minimizing transportation costs;
- striving for maximum occupancy of the rolling stock;
- ensuring timely delivery of the cargo.
Warehousing. One of the important components of the logistics system are warehouses. Their basic distinction consists in their designation: some are tied to production, while others act as an independent unit, and the rest are located at distribution centers.
Inventory Management. The basis of successful business is a proper and accurate calculation of the amount of inventory for a particular point of infrastructure. The main task is to provide them in the necessary amount and proper quality in time to the target point.
Information support. Allows to regulate logistics processes to the full extent. Information systems are called to separate links in the uniform debugged mechanism.
