What is logistics?

- What exactly is logistics? The Council of Supply Chain Management Professionals defines logistics as a "part of your company's supply chain that helps you meet your customer's requirements." Your supply chain pretty much describes how all businesses do business. Your company sources what you need from suppliers, makes products or provides services, and then delivers those products and services to your customers. To meet those customer requirements, logistics supports your supply chain with four distinct activities: move, store, distribute, and return. Let's talk about each of these. First and foremost, logistics moves goods and services from the beginning of your supply chain to the end. They transport supplies and materials from the supplier to the factory, for example, and then move finished goods from the factory to the customer. Logisticians plan these activities and manage the movements throughout your supply chain. Coming from your suppliers, materials or products sometimes must be stored temporarily in warehouses. For example, if your company takes advantage of price discounts by making large purchases, you'll store that extra material until the factory needs it. And sometimes your finished products may go to your warehouse until the customer places an order. This is very common for seasonal items like snow skis or fishing equipment. You make those products all year, but most of them are sold during a specific time. You also distribute your products. You may ship products to your own distribution centers or to other distributors like Amazon or Alibaba. From there, your products are sent to retail stores or directly to the end customer. Logistics is also responsible for the return function, taking back products that don't work properly or correcting delivery mistakes. So, you're moving finished goods and materials in the opposite direction through your supply chain. You must handle returns very carefully so that you don't disrupt a forward flow of products and supplies. As you manage these four logistics activities, there are two more important considerations. You must control your inventory levels and make effective use of information technologies to ensure you consistently meet your business plan and your customer's expectations. Your goal is to deliver the right product to the right place at the right time.