Business

logistics

What is logistics?

Logistics refers to the entire process of managing how resources are acquired, stored and transported to their final destination. Logistics management involves identifying potential distributors and suppliers and determining their effectiveness and accessibility. Logistics managers are called logisticians.

“Logistics” was originally a military-based term used to refer to how military personnel acquire, store and move equipment and supplies. The term is now widely used in business, especially companies in manufacturing, to refer to how resources are processed and moved along a supply chain.

Learn about logistics in management and business

Simply put, the goal of logistics management is to have the right amount of resources or inputs at the right time, get it to the right place in the right conditions, and deliver it to the right internal or external customer.

key takeaways

  • Logistics is the entire process of managing how resources are acquired, stored and transported to their final destination.
  • Poor logistics in a business can affect its bottom line.
  • Logistics is now widely used in business, especially companies in manufacturing, and refers to how resources are handled and moved along a supply chain.

In the natural gas industry, for example, logistics involves managing the pipelines, trucks, storage facilities, and distribution centers that handle oil as it transforms it in the supply chain. Efficient supply chains and effective logistics procedures are critical to reducing costs, maintaining and increasing efficiency. Poor logistics results in untimely deliveries that fail to meet customer needs, ultimately resulting in damaged business.

The concept of commercial logistics has changed since the 1960s. The increasing complexity of supplying companies with the required materials and resources, as well as the global expansion of supply chains, has led to the need for specialists known as supply chain logistics specialists.

In modern times, the technological boom and the complexity of logistics processes have given birth to logistics management software and logistics-focused specialist companies that speed up the flow of resources in supply chains. One reason large online retailers like Amazon dominate the retail space is the overall innovation and efficiency of their logistics at every step of the supply chain.

If it is cost-effective to do so, manufacturing companies can choose to outsource their logistics management to specialists or manage logistics in-house.

special attention items

The tasks that logisticians are responsible for vary from business to business. Key responsibilities include overseeing and managing inventory by arranging for proper transportation and adequate storage for the inventory.

Qualified logisticians plan logistical processes, coordinating the steps in which inventory and resources move along the supply chain.

Professional training in supply chain management and logistics is often a core or elective course in business education, or even a stand-alone course of study. A business degree that emphasizes these skills—or, in some cases, a technical degree in systems analysis or database management—is often necessary to start a high-paying career as a logistics engineer.

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