Logistics: What It Means and How Businesses Use It
Second, entrepreneurs have formulated some of the most remarkable logistics-oriented business strategies. The entrepreneur wears so many hats that he or she embodies the wedding between top management and logistical considerations in the strategy formulation process. But what of the large corporation in which organizational differentiation necessarily has created both specialized responsibility and a widening gulf between top functional logistics management? Here the experience of the large chemical manufacturer may be enlightening. This producer carefully maintains a liaison between functional and long-range planning personnel. Members of logistics groups in operating divisions that are responsible for shorter-range planning and for maintaining an awareness of current problems are kept informed of those elements of corporate strategy that might influence their thinking.
In business, logistics may have either an internal focus or an external focus , covering the flow and storage of materials from point of origin to point of consumption (see supply-chain management). The main functions of a qualified logistician include inventory management, purchasing, transportation, warehousing, consultation, and the organizing and planning of these activities. Logisticians combine professional knowledge of each of these functions to coordinate resources in an organization.
The weekly update of regional depot inventories often produced inaccurate knowledge of inventory availability on the part of order takers. Dealers could designate emergency orders, which were then shipped by the fastest method with transportation costs billed to the dealer. One indicator of the ineffectiveness of the system was that a growing proportion of orders were emergencies.
How to integrate logistics management solutions
This, of course, greatly reduces the availability of each item and the overall service level. It stands to reason that standardization within product lines can reduce production costs, cut inventories, and increase field stock coverage while nevertheless providing the basis for differentiating end products. For example, General Motors is able to produce an endless number of lines, brands, and models of automobiles from its standard A, B, and C auto bodies. These are but three of a growing number of companies that place major reliance on logistics in their business strategies. Typically, large retailers or manufacturers own major parts of their logistics network.
We have talented workforce and seasoned operators who know how to improve productivity and reduce supply chain costs. Of course, the work of a logistician is only part of the overall supply chain management field. If you’re strongly considering a degree in this field, you’ll want to check out our article, “What Can You Do With a Supply Chain Management Degree? 集運 to Consider” to learn more about how else you could apply this degree.