Why logistics is important

- Every company, large and small, is deeply involved in logistics, whether you do it yourself or hire someone to do this for you. Whether you're creating a product, generating a service, or managing an event, nothing outweighs the importance of gathering your resources, creating the product or service, and meeting the customers' expectations. This is why logistics is essential to the success of your company. Logistics is very important, for example, to your manufacturing operations. Without an effective delivery system, there's a high risk that the factory will run out of material, and this interferes with your schedule to meet customer demand. Logistics, of course, is also responsible for getting your final product to your customer on time. A really good delivery process can create a return customer. A poor delivery process can lose that customer forever. But logistics is about much more than the delivery system. It's about all the activities needed to manage your customer's order from start to finish, and that requires four important capabilities. First, you must understand the demand for your product. Most companies provide more than one product or service, so in some cases understanding demand can require a whole dependent of analysts. And certainly it requires close communication with people in marketing, purchasing, and operations. Second, you must plan an effective business strategy to meet that demand. You must determine where to place key warehouses and distribution centers and when to schedule deliveries into and out of your factories and how best to fill your customers' orders. Third, you must manage your inventory and transportation processes. Logisticians are responsible for inventory throughout the supply chain, from raw materials and supplies going into the factory to finished goods going to the final customer. And they manage the transportation processes that deliver that inventory by truck, rail, ship, and airplane. Last, you must provide efficient support services, like communicating with customers and managing their returns. In today's global economy, with suppliers and customers all around the world, the logistics function is become more and more important for business success. No matter what size your company is and even if your company outsources some of these activities, logistics must be managed very carefully. That's why more and more companies today are incorporating logistics considerations into the highest levels of planning, goal-setting, and decision-making.