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What Is Logistics Management and Why Is It Important?

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As freight volume grows and transportation becomes complicated, the need for robust logistics management is increasing. With current industry challenges, well-planned logistics management becomes a primary factor in the success of any company's operations and directly impacts its bottom line. Additionally, meeting customers' demands and providing superior service are also goals of good logistics management.  

What is Logistics Management?  

Logistic management is known as the control and supervision of the movement of goods. However, the scope of managed processes reaches far more than that. It involves several factors, including transportation management, freight and inventory management, materials handling, and order fulfillment. Proper logistics management encompasses optimization processes to maximize revenues, cut manual labor, make informed decisions, and exceed customer expectations.  

How Can Logistics Planning Benefits Your Company?  

Increased customer satisfaction  

Consumers demand better service creating a need for shippers to provide fast, accurate, and quality service. Good management strategy aims to optimize transportation processes and eliminate disruptions. Therefore, it has a direct impact on your customers' satisfaction. Improved customer service can bring an excellent reputation to a company's brand and help generate more business. In addition, a well-arranged and high-performing freight transportation process can significantly contribute to customer experience and exceed shippers' expectations. Finally, well-handled logistics contributes to the overall positive customer experience.  

Improves efficiency  

Logistics planning improves your company's efficiency. With on-site logistics planning, your company can store materials properly while also locating them quickly. Therefore, you'll be able to speed up transactions and improve business activity.  

Visibility

It is essential to create visibility in a company's supply chain. Advanced transportation management systems (TMS) analyze historical data and track the real-time movement of goods in and out of businesses. Logistics managers can use this information to inform optimizations and avoid potential disruptions. TMS data analysis keeps a company's supply chain moving more efficiently, all while gaining operational insight.  

Cost Savings  

Managing logistics with efficiency will give a company control over inbound freight, keep inventory at optimal levels, organize the reverse flow of goods, and utilize freight moves on the proper transportation modes – all of which can cut costs significantly. Inbound freight can account for about 40 percent of general supply chain costs, which means good logistic management lets shippers tap into hidden opportunities for savings.  

What are the main goals of Logistics Management?  

Before turning to external help and investing in management technology, you want to ensure beneficial results. That is why it is essential to know how to measure the effectiveness of any new practices.  

  1. Increase revenue  
  1. Improve operating cost structure  
  1. Reduce overall transportation costs  
  1. Improve customer service  

Logistics Management System and Software

Many companies use third-party logistic providers (3PL's) for help as this simple concept can often become overly complex and challenging to execute. In addition, 3PL's have the expertise and advanced technology to cut costs and improve logistics processes much more efficiently than companies can in-house.  

Learn more about our logistics management services and contact us now for a free logistics analysis!

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