Long ago, logistics was a term used in the military. It referred to how armies gathered, stored, and moved military equipment and supplies.
But what is logistics today?
Companies need materials and resources to manufacture products. Manufactured products need to be distributed, sold, or delivered to the end consumer. In these instances, logistics comes into play.
Logistics is the complex process of planning and managing the operations of acquiring, moving, and storing resources. In simpler words, logistics is the movement of goods from one point to another. It is a part of a company’s entire supply chain.
Due to the increasing complexity of supplying companies with the materials and resources they need, business logistics has also taken a huge transformation over the years. Supply chains have become more global. The process of delivering the right amount and type of resource at the right time is more intricate now than ever.
This is the reason many businesses integrate modern technology into their operations. AI and freight management software provide reliable assistance to companies by automating their processes. Where automation is, manual operation ceases. This doesn’t only save time and money but also provides a more reliable result.
How important is logistics, you may ask?
Although logistics primarily tackles the movement of goods, its effects and importance extend further. Efficient and reliable logistics positively impacts the bottom line of a business. On the other hand, poor logistics can hurt the profitability of a company.
The purpose of logistics is to provide the best and most effective ways of transferring products and resources from point A to point B. The goal of logistics is to meet customer demands and requirements on time.
Logistics, therefore, directly affects customer service. Along with many other business elements, efficient logistics allow a company to provide better customer service. Outstanding customer service creates a lasting positive impact on customers and helps build good relationships.
The importance of reliable logistics has always been crucial throughout the entire supply chain, but it has become more paramount in the past few years. This can be attributed to the development of technology and omnichannel commerce where safe, same-day delivery of packages is invaluable.
As society is becoming more and more fast-paced, so are consumers. They want quicker, safer, more convenient delivery of orders. In response, businesses that supply, manufacture, distribute, and sell resources and products should find ways to improve their logistics processes. After all, this is the purpose of logistics.
Businesses exchange goods or services for money, and logistics fill in the gap. When there is no movement of products or services, there is no business. No money is involved, and therefore, there is no profit.
Effective logistics entails several functions. It starts with the sourcing of materials, which involves not just finding the most affordable supplier of raw materials, but also considering various factors to manage the overall costs.
Demand forecasting is also crucial in logistics, which heavily relies on demand forecasts to ensure the company does not run out on core products or materials.
As discussed, logistics facilitates the movement of goods from one location to another. To do this, it requires two major functions: transportation and warehousing.
Transportation involves the use of vehicles to transport goods between locations. Transportation in logistics is multimodal, which means it can be via air, sea, or rail and roads.
Warehousing refers to the temporary storage of physical inventory for distribution or sale. Warehouse management involves overseeing warehouse infrastructure and processes and managing the flow and storage of goods.
Logistics is a key element in the overall supply chain. This means that if logistics fails, the entire supply chain suffers. An example of how broken logistics affects the whole supply chain was seen during the recent pandemic when certain aisles in grocery stores were left empty.
The very core of logistics is physically moving goods from a location to a destination. Transportation management involves arranging freight loads, optimising routes, managing orders, freight auditing, and many others.
The cost and availability of transport vehicles may vary widely, making carrier and freight management a crucial aspect of transportation. Transport managers need to choose the best shipment mode and select the best carrier based on various factors, such as cost, distance, location, and speed. This requires careful planning, especially on routes that require multiple carriers.
Many companies implement AI and modern software in their operations to assist with managing the many complex processes within their supply chain, including transportation.
Another major function of logistics is warehouse management. A high-functioning warehouse is a must for companies that store and distribute goods or materials.
Before making order decisions, logistics planners must consider the condition of the warehouse. Is there enough storage, or will there be enough storage before orders arrive? They must take into account the availability of warehouse space and the proximity to docking stations or other modes of transport, among many others.
Logistic planning should also involve the system within the warehouse. This includes storing lower-demand items at the back, placing fast-moving goods and products scheduled for transport at the front, and rotating perishable goods and shipping the oldest ones first, and so on.
Many businesses utilise warehouse management software to automate track inventory and manage the flow and storage of products.
Although logistics management has a lot of intricacies, businesses recognise how important logistics is. Many companies hire expert logisticians to handle and manage their logistics and coordinate with other supply chain managers.
In the modern era, though, the technology boom has assisted many companies in dealing with the complexity of logistics and supply chains. With the help of advanced technology, there is no need for a business to outsource the management of their logistics, saving them money and time spent on operations.
Logistics management covers many issues—manual operation and human error, different packages and pallets require different carriers, no transparency of transport costs or data, poor customer service, and the list goes on…
As logistics management software, Cario eliminates the strenuous and time-consuming part of logistics and gives way to automation and digitisation.
In business, transportation plays a crucial role in ensuring goods are delivered to their destination safely and on time. Cario automates freight decisions by helping you select the right freight carrier, optimise routes, track all shipments in a single system, manage billing, and manage freight data and performance.
With Cario, you don’t have to deal with the complexity of different processes and systems. Even with multiple carriers, you can choose the best each time as Cario automates based on cost, service, or other business rules you set up.
Want to make your logistics better and automated? Contact us today and learn how to set up your logistics management system with Cario.