Ever wondered how companies forge to become fortune 500 or make it to the list of the Top 100 most successful business ventures? A great leader who strikes the correct balance between planning, leadership, and execution is the key element in the massive success of these enterprises. Customers are the driving forces of the management and execution processes carried out. Their needs are the prime concerns in the strategies and procedures built for the forces of the economy. It is essential to keep the customer happy. To achieve an exceptional level of customer satisfaction, companies have a firm and organized logistics system. The Logistics system is the backbone of the integrated functionalities of an organization

Hop on to understand the role of logistics and supply chain in the working of an organization.

What is Logistics and Supply Chain Management?

Logistics is a procedure under the supply chain conducted by a firm that involves all the activities which facilitate the movement of goods from the point of production to the point of consumption. The logistic system is a process that involves the movement of supplies and products entering, passing through, and leaving the business.

Logistics is an aspect of supply chain management that focuses primarily on the storage and movement of goods at different points of the supply chain.

Whereas supply chain management is an all-comprehensive term that includes all the activities such as coordination between the partners that have a role to play in this network which comprises the transportation, storing, selling, and generating customer satisfaction.

Logistics is focused on minimizing the costs involved in the storage and transportation of goods, supply chain management pays to heed to maximize profit and ensure smooth functioning of the flow of information, and goods between all the parties and customer satisfaction.

What Is Supply Chain management and how does it involve Logistics?

Supply chain management includes the involvement of high-end processes such as sourcing and buying raw materials and finally creating them into the final product which is delivered to the customer. SCM uses logistics as an instrumental tool to deliver goods from the manufacturer to the consumer.

Logistics is an aspect of supply chain management that aims that deliver the right product at the right place and at the right time. Supply chain management adapts the Logistic system to strengthen the position of the business in the market and boost the revenues of sales.

To understand logistics better, let us dive deeper into the processes involved in logistics.

Different types of Logistics are involved in Supply Chain Management.

Logistics is the most needed aspect of supply chain management, which involves the coherent delivery of goods. Delivering the goods at the right time involves a lot of integrated activities, Let's study the different activities involved in the logistic system.

Inbound Logistics

Materials and other commodities are brought into a company via inbound logistics. The actions to order, receive, store, transport, and handle incoming goods are all included in this process. The supply side of the supply-demand equation is the main focus of inbound logistics.

Inbound Logistic Activities:

1. Identifying the source of the supplier- Inbound logistics commences with the identification of the potential source of the vendor who can provide the materials/goods as per the prerequisite.
2. Order Processing- This involves checking the requirements, negotiating prices, and placing orders for the required materials.
3. Transportation-Contemplating use which mode of transport is optimum for the acquiring of materials. Working with vendors to determine price and route is another aspect of this task, as well as choosing the delivery speed for incoming supplies.
4. Procurement – It involves the acquisition of materials or goods at the right cost, right quality, right quantity, right time, and at the right place in the best pursuit of the vendor and the company.
5. Material Handling- This step follows procurement which involves storing the goods within shorter distances to keep them in optimum condition for warehousing.
6. Takeaway – This involves the transport of goods to the warehouses
7.  Warehousing – It involves the storage of goods in safe locations and cross-checking them against the requirements before they are delivered for manufacturing or end-user requirement.
8. Inventory management-Choosing the kind, quantity, and location of the raw materials and commodities you should keep on hand is known as inventory management.
9. Streamlining: Controlling the flow of materials and their timetable as they arrive at your plant.
10. Distribution is getting supplies to the right places inside a company.
11. Tracking: Monitoring information about incoming orders, including their location and supporting records like receipts.

Outbound Logistics

Outbound logistics starts after the material/product has been delivered to the firm. It involves the storage of the product in the firm and delivering it to the end user. This process involves warehousing, inventory management, packaging, order fulfillment, shipping, delivery, and customer service related to delivery.

1. Warehousing: To fulfill demand, a business keeps a specific amount of inventory on hand. Outbound logistics procedures organize and safely store these commodities in the appropriate settings. In warehouse management, inbound and outbound logistics are combined. However, logistics for outbound shipment of final goods are. Inbound logistics focuses on product acquisition for businesses that sell finished goods they get from suppliers, and outbound logistics complete orders sent directly to clients and deliver the goods to retail locations.
2. Inventory management: A procedure that chooses the optimal location to store items in the warehouse for quick order fulfillment and the order picking and packing operation, frequently places a major emphasis on software. The objectives of inventory management include maintaining product quality by avoiding damage, theft, expiration, and spoiling, as well as inventory and order accuracy.
3. Transportation: Depending on the nature of commodities, different modes and methods of shipping are used. For instance, large things like heavy machinery may be shipped by truck in modest order quantities. Fresh flowers and other perishables may need to be delivered by an airline in freezers.
4. Delivery: The last step involves presenting the orders of the end users at the right time. Punctuality in delivering the final products is a must for the reputation of the company. This order can be dispatched through various distribution channels

Reverse Logistics: If a client has a complaint, the goods are transported back to the business using the same logistics techniques. Reverse logistics is the term for this.

The importance of logistics and supply chain management in today’s world:

The modern practices of supply chain management are instrumental in the success of businesses today. Proper logistical systems can help mitigate the costs incurred in the storage and movement of goods. SCM software can help in tracking the activity of goods and maintaining an efficient flow of information at the points of contact.

Enforcing proper inventory controls can minimize the occurrences of theft within a company.

Supply chain management has now evolved into a practice of profit maximization and taking steps in the best interest of the environment.

With the introduction of green logistics, companies are now adopting techniques that reduce the impact of technology on the natural habitat.

Green logistics is the way forward in the conduct of the Supply chain, where it pivots on reducing the carbon footprint and finally resolving the trade-off amidst a sustainable environment and economic progress.

Conclusion

Supply Chain Management and Logistics are the foundational strategies of a winning business enterprise. The opportunities that one can attain after adopting the modern supply chain management system in their firm are endless. So let your advanced worrying turn into planning and see yourself bearing the fruits of success.

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