What exactly are logistics?
Logistics involve all the elements that go into managing the movement of goods, people, processes, and related activities. In relation to supply chain management, logistics involve controlling the movement of raw materials and finished goods from origin to endpoint, and the systems, equipment, vehicles, and personnel used along the way.
- Product Development and Manufacturing
- Managing Personnel
- Inventory Management
Product Development and Manufacturing
From the conception of the product idea to the manufacturing of the raw materials, much effort goes into product development. You need to source the raw materials and have them transported for manufacturing. The costs and time of delivery need to be taken into account here. Speed of labor and equipment during the manufacturing process affect the time of procurement for the product.
Logistics in distribution have come a long way and fortunately have been streamlined by the likes of shipping companies, including UPS and FedEx. The important thing is to track all time estimates and plan for delays. Keep delays as part of expected ETAs for each part of the process.
Constant maintenance is required for any vehicles and equipment necessary to the process. Machines eventually malfunction and you need to plan for this downtime. Repair personnel need to be readily available to keep everything running.
Fixed costs and variable costs need to be accounted for at all times. This lets you know how much money you can allot towards other parts of the process: equipment upgrades, hiring more staff, etc.
You need to create an environment where your staff can thrive, both in the culture created and the positions they fill. Balancing work production and employee morale is essential for a stable work environment. If your employees are happy and project deadlines are being met then you know you’re effectively managing your personnel.
John J. Coyle, the author of "Supply Chain Management: A Logistics Perspective" perfectly summed up supply chain management in a single phrase:
"Logistics is about getting the right product, to the right customer, in the right quantity, in the right condition, at the right place, at the right time, and at the right cost (the seven Rs of Logistics)."
Inventory management is at the core of delivering on this. To supply the demand, you need to know when to reorder new inventory and how to properly distribute the product. Today, there are robust systems that allow you to effectively track all of your inventory.