While business has often been compared to being in a “warzone” the actual term “logistics” does come from the military. It referred to the process of supplying equipment and supplies to troops. Nowadays the business sector has used logistics to describe the efficient storage and flow of goods from the point of origin to the point of consumption. This includes important factors such as management, storage, receiving, shipping, and transportation.
Why it is so important for business
Even smaller businesses have to deal with finding suppliers. Perhaps even deal with transporting merchandise to a store. In the business environment, there is either an external or an internal focus on logistics services (outbound or inbound). Depending on the business involved in logistics, this can range from very complicated to relatively simple. If the procedures are complicated, third parties are often hired to provide logistics services to help within business logistics.
Having a third party means that you have external organizations or individuals execute logistics activities that are traditionally performed within the organization itself. For example, you might hire an organization to help with distribution logistics if you decide to export your product.
The benefits of logistics consulting services
There are specific firms within the industry that focus on the production and distribution of goods from the first stages of suppliers, and there are those who focus on the delivery of finished goods to consumers. These firms might not actually take any of the work off the company’s hands, but they can provide advice on materials management and handling, the transportation of goods, order processing, packaging, inventory management, product quality control, the manufacturing process, and productivity.
Why does this matter to business?
This is the important question, why does logistics help within business. What are the short-term and long-term benefits that businesses should expect from these logistic services? These are a handful of examples:
- Maintain the competitive edge – Integrating a successful logistic service can help differentiate you from other organizations by providing a competitive edge. It offers a system or process to ensure that the customer receives his or her product/service in a more efficient manner. If you can provide your merchandise faster and more accurately than your competitors can, it is an immediate benefit.
- Build excellent consumer relationships Business logistics services can help provide products in an efficient manner. If you have a quality product and efficient delivery system, it is going to build good consumer relations. This is not only going to benefit the company in the short-term through monetary gain, but it might also mean more business in the future because of nourished customer relations. Remember that providing good, quality service is going to be the best way to advertise a business and cause income to grow.
- Generate a finished product Companies need to make finished products, this means that companies need to be sure that there are enough raw materials available to do so. A business cannot make quality products without quality goods. This allows companies to maximize customer satisfaction and live up to the supply and demand purposes.
- Benefits within the organization Having logistic services can ensure that the process progresses efficiently each time that a product is created. It is important that inventory be manufactured, stored, transported, and tracked, all in a way that will benefit each of the departments of the organization. This will help the company stay on track, because each department knows what it should be doing and what is expected.
As you can see, the concept of logistic services within an organization plays a vital role. This is one of the reasons that it has become such an important factor within businesses and the reason that companies need qualified personnel to help with this particular aspect. There are number of companies that now use this type of methodology, from big businesses to small companies. For example long island exotic pet clinic where veterinarians uses supply chain and kanban principles to increase profits and efficiency in their daily practice. There are tech start up companies such as silicon NYC that provide and source news by using latest operations methodologies.
To learn more about a career in operations management and the importance of logistic services within that field, see Interviews with Masters of Operations Management