Logistics is a set of processes and procedures aimed at the effective management of the movement of materials, goods and information across supply chains. Logistics includes planning, organizing, implementing and controlling all aspects of transportation, warehousing, inventory management and information management related to goods.
Logistics endeavors to ensure that products and merchandise are delivered to the intended location on time and at the most cost effective location. These services include a variety of activities such as warehousing, transportation, distribution, stock management and supply chain management.
It also includes planning and organizing logistics operations, such as determining the best transportation routes, identifying risks, managing quality, and improving operations. Logistics helps bring about coordination and alignment between all the different elements in the supply chain, from suppliers to end customers.
Importance of Logistics:
Logistics services are of great importance in the global economy, as they contribute to improving the efficiency and quality of production, distribution and consumption processes. It also helps in creating job opportunities, developing skills, increasing competitiveness, and achieving regional and international integration. Here are some points that illustrate the importance of logistics services:
1- Improving cost efficiency:
Logistics helps reduce a company's overhead costs by optimizing inventory storage, optimizing transportation and distribution operations, and improving overall supply chain management. By improving cost efficiencies, companies can achieve financial savings and increase their profitability.
2- Improving customer experience:
Logistics contributes to improving customer experience by ensuring that products are available at the right time and at the specified location. When customer needs are met quickly and effectively, it leads to satisfied customers and building long-term relationships with them.
3- Quality improvement:
Logistics helps ensure the quality of products and commodities by properly managing inventory and providing suitable storage conditions. In addition, transportation and distribution processes are controlled to ensure product safety and avoid damage or loss.
4- Improving response time:
Logistics services help reduce response time to customer requests and deliver products quickly. Thanks to the organization of processes and good planning, companies can handle customer orders effectively and provide short delivery time.
5- Enhancing competitiveness:
Logistics services are one of the main factors that contribute to enhancing competitiveness in the business market. By improving the efficiency of operations and better meeting customer needs, companies can achieve competitive advantage and increase market share
How do logistics companies work:
Logistics companies implement and manage logistics operations and services in supply chains. With a comprehensive understanding of supply chains as well as customer requirements to provide efficient and reliable services, here is an overview of how logistics companies operate:
Analysis and planning:
Logistics companies start by analyzing the needs and requirements of customers and the requirements of supply chains. Where it provides consulting and planning services to determine preference and design appropriate logistical operations based on customer needs and market requirements.
Inventory management involves planning and controlling stock levels for materials and products. Order history and projected future orders are analyzed to determine required inventory quantities, inventory refill schedules, and make recommendations to improve inventory management.
Carrying out packaging and packaging operations:
Packaging and packaging operations are important and responsible operations that require high skills in organization, coordination and accuracy. This job includes preparing, arranging, labeling and packaging goods sent to or from customers or partners. It also includes monitoring the quality and safety of goods and ensuring that they comply with the required specifications and standards.
All of this requires employees who are able to work under pressure, adapt to different situations, and collaborate with multiple work teams. This job offers stable and rewarding job opportunities for people who love challenge and innovation.
Transport and Distribution Management:
It is the management of the transportation of goods from their source to their final destination in an efficient, safe and reliable manner. Transportation and distribution management includes determining the best means of transportation and coordinating shipping schedules, interim warehousing and final distribution of products. Shipments are tracked and tracking information is provided to customers to maintain a clear view of the movement of products.
Managing contracts and partnerships:
Logistics companies' operations include negotiating contracts with partners and suppliers and signing agreements to provide logistics services. Relationships with partners are managed to ensure cooperation and the achievement of common goals.
Technology and automation:
Logistics companies use technology and information systems to improve efficiency and accuracy in logistics operations. Supply chain management software and tracking and control systems are used to achieve a comprehensive view of operations and to enhance communication and cooperation between stakeholders.
Monitoring and analyzing performance:
Logistics companies track the performance of operations and analyze logistics data to identify areas that can be improved and developed. Key Performance Indicators (KPIs) are used to measure efficiency and quality and to provide reports on the performance of the logistics company.
Use of information technology and analytics:
Logistics companies use information technology to enhance supply chain management. Supply chain management systems and analytics software are used to track and analyze data related to logistics operations. This helps in making informed strategic decisions, improving efficiency and reducing costs.
How can logistics companies improve their performance and way of working:
To improve the performance and functions of logistics companies, several strategies and practices can be followed. Here are some tips that can help logistics companies improve their performance:
Improve supply chain management:
Logistics companies should focus on improving supply chain management in general. Planning and coordination should be improved among all elements involved in the supply chain, including suppliers, manufacturers, freight forwarders, and warehouses. This can be achieved by adopting integrated supply chain management systems and using technologies such as enterprise resource planning (ERP) and logistics analytics.
Use of modern technology:
Modern technology can play a decisive role in improving the performance of logistics companies. Warehouse management systems (WMS), shipment tracking and positioning systems (GPS), bots, artificial intelligence, and data analytics can be used to enhance the efficiency of company operations, improve planning, demand forecasting, and shipment tracking.
Staff training and development:
Logistics companies should invest in staff training and development. Appropriate training should be provided to employees in areas such as supply chain management, logistics information technology, communication and leadership skills. By developing the capabilities of employees, it is possible to improve the company's performance and raise the level of quality and efficiency.
Performance evaluation and continuous improvement:
Logistics companies should regularly evaluate their performance and analyze the results to identify areas that need improvement. TQM techniques such as the DMAIC (Define, Measure, Analyze, Improve, and Control) model can be implemented to analyze and improve processes and ensure continuous improvement.
Collaboration with partners:
Collaboration with business partners, suppliers, shipping companies, and customers is crucial to improving the performance of logistics companies' functions. Communication and information exchange should be strengthened among all stakeholders to achieve better coordination and integration in the supply chain.
Innovation and technological adoption:
Logistics companies must be constantly aware of innovations and new technologies in the field of logistics. Uses of emerging technology such as artificial intelligence, machine learning, and the Internet of Things can be explored and applied in company operations to achieve significant improvements and boost efficiency.
Monitor and measure performance:
Logistics companies should implement performance monitoring and measurement systems to track performance and identify key performance indicators (KPIs). This data can be used to identify areas that need improvement and take immediate corrective action.
Responding to market changes:
Logistics companies must be able to adapt to market changes and customer requirements. Efforts should be directed towards monitoring market trends, analyzing expectations and developing flexible strategies to effectively meet customer needs.