How does logistics work?

Whenever goods need to be transported from one location to another, logistics functions to ensure that this process works in an effective and efficient manner.

The ineffective management of logistics is likely to lead to significant problems in a supply chain, potentially causing difficulties so severe that the entire supply chain breaks down.

In this blog, we look at what logistics management is, how it works, what it consists of and why it’s so important for businesses in many industries.

What is logistics management?

A crucial part of the supply chain process, logistics management is needed for the movement of goods and services via road, air, sea and other methods of transportation.

Effective logistics management involves in-depth planning of all aspects of the movement and storage of goods throughout the supply chain. It’s purpose is to find the quickest, most reliable and most cost effective methods of ensuring goods are in the right place at the right time.

What does logistics consist of?

While logistics covers a wide variety of specialisms and tasks, it can typically be split into five different categories. They are:

Information –

At every stage of the logistics process, information and control are needed to plan and implement relevant processes. By ensuring a sufficient level of attention to detail, logistics service providers can ensure that the movement of goods and services happens without delays or any significant issues.

Transport –

The transportation of goods is the most recognisable part of logistics, and without it, the shipments wouldn’t be able to get from supplier to buyer. Various different types of transport are used by freight service providers in order to ensure that goods get between point A and point B safely and within the necessary timeframes.

For example, road freight is often suitable for domestic shipments or journeys being made via ferry. Alternatively, rail freight can be used for domestic or regional transportation. Meanwhile, sea freight is ideal for the transportation of goods between two ports, and air freight is traditionally utilised for moving goods at speed internationally.

Storage –

Through the use of warehouses and other storage facilities, goods can either be stored temporarily during the process of transportation to the desired destination or businesses that sell goods can rent or buy their own warehouses to store these goods and simply ship them out when necessary.

Inventory –

Although closely related to storage, inventory focuses more specifically on the management of storage rather than the storage space itself. For instance, it focuses on what stock is being held, and in what quantities. Freight forwarding companies may offer specialist pick and pack services that include full stock control and handling.

Packaging –

Every shipment of goods needs to be packed and unitised as efficiently, securely and methodically as possible. More often than not, goods in freight shipments are packaged as cubes so they can then be stacked up next to and on top of other units.

Why logistics is important in business

Effective logistics solutions are crucial for businesses in a range of industries.

For example, in a retail business, items may be shipped en masse from another country and a quick, seamless and cost effective service will mean that the goods will be ready to be sold without delays or unnecessarily high fees.

Alternatively, in an industrial setting, assets like specialist machines may only be available from suppliers based far away. Through reliable logistics that get these items to the intended destination quickly, businesses can be spared potentially disruptive delays.

As such, the impact of well-run logistics is often pivotal to the performance of businesses across the world, and without this, businesses may not be able to operate properly or may even struggle to function at all.