Logistics management is a detailed process of organizing and implementing an operation. When it comes to business, that process is the flow of work from the beginning to the end, in order to fulfill customer expectations as well as those of your organization.
A practical and simple way to look at logistics, as quoted from The Handbook of Technology Management, “is as having the right item in the right quantity at the right time at the right place for the right price in the right condition to the right customer.”
Logistics management manages resources that can range from tangible goods (such as materials, equipment and supplies) to food or other consumable items. In doing so, logistics management deals with integrating the flow of information and its management tools, materials handling, production packaging, inventory, transportation, warehousing and sometimes security.
To model, analyze, visualize and optimize this complex logistical puzzle, the use of a dedicated simulation software is often used. The person who works in this field is called a logistician.
Relation to Supply Chain Management
Logistics management is a subset of the larger supply chain management. Supply chain management plans, implements and controls the efficient flow of storage, goods, services and related information from the point of origin to the point of consumption. This is done for the purpose of meeting the requirements of customers.
Logistics management in business works across all industries. Its aim is to manage the fruition of project life cycles, supply chains and resultant efficiencies. As businesses grow more complex and expand into a global marketplace, business logisticians have evolved into something called supply chain logisticians.
Different Types of Logistics Management
There are four main types of logistics management, each emphasizing a different aspect of the supply process.
1. Supply Management and Logistics
This involves the planning, procuring and coordinating materials which are needed at a certain time at a particular place for the production of a task. This includes transportation of the materials as well as a place to store them. Additionally, evaluating the level of supply at the different stages of the process is required to make sure the needs of the customer are met, for example delivering materials to a construction site or parts for a manufacturing plant.
2. Distribution and Material Movement
This takes stored materials and transports them to where they need to go. The issues in this involve moving materials; including loading, unloading and transportation, as well as keeping track of the stock and how it is used. This type of management controls the movement of supplies from a central warehouse to the stores that sell the product to the public.
3. Production Logistics and Management
This manages the stages of combining distributed supplies into a product, such as coordinating what is needed to make or put together something. This involves the staging of materials at the right time to work with the building of a product. This type of logistics management falls in the realm of product management.
4. Reverse Logistics and Product Return
This is about the management of reclaiming materials and supplies from production. For example, on a construction site it involves the removal of excess material and returning those materials to one’s stock. It can also refer to the return of unwanted or unused products from the end customer seeking a refund.