Logistics management is part of supply chain management and is responsible for planning and implementing efficient systems to get goods from the point of origin (e.g., a factory) to the point of consumption (e.g., a store or consumer’s home).
Logistics management systems are generally focused on the movement of products, rather than the vehicles used to transport the products (sometimes referred to as Transportation Management). In many cases, it involves intermodal, or different types of transport (e.g., road, rail, etc.), distribution channels.
Some firms will use third-party logistic consultants to manage the movement of goods as they often have expert knowledge and connections in the transport industry to improve overall efficiency and cost savings. Transported products may be tagged with barcodes, RFID tags or GPS for location tracking to monitor the progress of goods all the way to their final destination and to improve the integrity of the supply chain.
What are the duties of a logistics manager?
Logistics managers oversee the departments that receive materials and supplies into a business (i.e., inbound logistics) and supervise the warehousing, stocking departments and shipping operations (i.e., outbound logistics). Sometimes supply chain managers can be responsible for reverse logistics, which is the return of faulty goods from consumers.
What are the 7 R’s of logistics management services?
There are seven ‘rights’ in logistics management:
- Right Product — Logistics providers need to understand the materials they are handling, whether raw materials for a factory or finished goods being distributed to customers’ doorsteps.
- Right Place — Depending on the type of customer—either wholesaler, factory or retailer—a supply chain can pass through a variety of facilities, from farms, ports or distribution centers right to a consumers front porch.
- Right Price — Cost effective logistics services can help improve the bottom line of both the customer and the logistics management company.
- Right Customer — Customers that require comprehensive supply chain management services can range from ecommerce retailers to factories that process large amounts of raw materials.
- Right Condition — proper storage of goods (i.e., cold chain storage) and sound material handling processes help customers receive their goods in ideal conditions.
- Right Time — Near real-time tracking of deliveries all the way to their final destination can help to meet customer demands.
- Right Quantity — Cost-effective order fulfillment and efficient warehouse management often depend on just the right quantity of goods arriving at each stage in the supply chain.
What are the benefits of logistics management?
- Increased customer satisfaction — With efficient logistics management systems in place, businesses are able to decrease disruptions and improve the speed and reliability of their deliveries.
- Improved transparency — Insight into every step of the supply chain helps businesses highlight areas in need of improvement and reassure customers that their products arrive in their hands in the best condition.
- Cost savings —As well as improving customer satisfaction, a proper level of logistics processes will give a company control over freight as it moves in and out of their facilities, and help with inventory management and order processing—all of which can cut costs significantly.
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