Logistics is the overall process of managing how resources are acquired, stored and transported to their final destination. Logistics management involves identifying prospective distributors and suppliers, and determining their effectiveness and accessibility. Managers are referred to as logisticians. Logistics is generally the detailed organization and implementation of a complex operation.
In a general business sense, it is the management of the flow of things between the point of origin and the point of consumption in order to meet requirements of customers or corporations. The resources managed can include physical items such as food, materials, animals, equipment, and liquids; as well as intangible items, such as time and information. The engineering of physical items usually involves the integration of information flow, materials handling, production, packaging, inventory, transportation, warehousing, and often security.
Logistics management is the part of supply chain management that plans, implements, and controls the efficient, effective forward, and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customer’s requirements. The complexity of logistics can be modeled, analyzed, visualized, and optimized by dedicated simulation software. The minimization of the use of resources is a common motivation in all fields.
In business, logistics may have either an internal focus or an external focus, covering the flow and storage of materials from point of origin to point of consumption. .
There are two fundamentally different strategies: one optimizes a steady flow of material through a network of transport links and storage nodes, while the other coordinates a sequence of resources to carry out some project (e.g., restructuring a warehouse).
In simple terms, the goal is to have the right amount of a resource or input at the right time, getting it to the appropriate location in proper condition and delivering it to the correct internal or external customer. Proper organization ensures the fulfillment of each customer order, making sure resources move quickly and efficiently from one section of the supply chain to the next.
For example, in the natural gas industry, it involves managing the pipelines, trucks, storage facilities and distribution centers that handle oil as it is transformed along the supply chain. An efficient supply chain and effective logistical procedures are essential to reduce costs and to maintain and increase efficiency. Poor logistics leads to untimely deliveries, failure to meet the needs of clientele and ultimately causes the business to suffer.
The concept of business planning has been transformed since the 1960s. The increasing intricacy of supplying companies with the materials and resources they need and the global expansion of supply chains has led to a need for specialists known as supply chain logisticians. In the modern era, the technology boom and the complexity of logistics processes have spawned logistics management software and specialized logistics-focused firms that expedite the movement of resources along the supply chain. Manufacturing companies may choose to outsource the management of their logistics to specialists or manage logistics internally if it is cost-effective to do so.
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