Logistics companies can help almost any kind of business better manage the flow of things between the point of origin and the point of consumption. That’s what logistics is all about.
Logistics grew out of the need for military operations to feed, fuel and supply their troops in the field for short or long periods of time. For them, it was about maintaining their supply lines and trying to disrupt those of their enemies. That way they could be successful in battle and be able to move their resources to the places they were needed the most.
1. Logistics in business
For companies and businesses, the impact is not as severe as losing a battle or a war, but their profitability could be at risk unless they have a good logistics plan to manage their flow of goods. The things that need to be managed in logistics are endless and range from the physical items like food, materials, or equipment. But they also factor in the abstract items, like time and information. Logistics allows for the integration of information flow with handling and production all the way through packaging and warehousing to ensuring that the goods are securely and safely transported to market.
2. How logistics companies work
Logistics companies, also known as third party logistics companies usually provide many and varied logistics related services. These services might include public warehousing, contract They could look after receiving and storage, and shipping and transportation responsibilities for a company. They often have their own warehouses, equipment and employees to manage these functions or could operate in their client’s facility.
These types of logistics first emerged as a new business model in the United Kingdom and then came across the water to North America 1990s. Third party logistics 3PL providers became popular on both sides of the Atlantic because they offer innovative alternatives and comprehensive logistics services.
3. Demand for services
The demand for these services have grown in recent years because of both demand and supply side factors. These include deregulation, growing competition and the need to seek out new business opportunities. Many companies see outsourcing their logistics operations as a great way to cut costs and allow management to focus on their core business functions.
There are many different types of services that logistics companies may offer. These might depend on the nature of the business or specific needs or challenges they may face in getting their product through production and distribution.
4. Inbound vs. outbound logistics
Inbound logistics concentrates on the purchasing and arranging the inbound movement of materials, parts, or finished inventory from suppliers to manufacturing or assembly plants. Then getting them to storage in warehouses, or in the case of some products, directly into retail stores.
Outbound logistics on the other hand is the process related to the storage and movement of the final product. This takes place after production or manufacturing and deals with the flow of product and related information from the end of the production line to the end users.
5. Procurement & distribution logistics
Procurement logistics relates to activities like market research, requirements planning, supplier management, and the ordering, and order controlling processes. Logistics companies help to maximize efficiency by concentrating on core competences, and keeping costs low while maximizing security during the supply process.
Distribution logistics focuses on the delivery of finished products to the end client or customer. It might include things like order processing, warehousing, and transportation. It helps to deal with the time gap between the place, and quantity of production and the place, and quantity of consumption.