What Is Logistics Management and Why Is It Important?

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As freight volume grows and transportation becomes more 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 has a direct impact on its bottom line. Additionally, meeting customer demand and providing superior service are also goals of good logistics management.

What is Logistics Management? Logistics Management Definition

According to the definition from The Council of Supply Chain Management, “logistics management is a part of supply chain management that plans, implements, and controls the efficient flow and storage of goods, services, and related information in order to meet customers’ requirements”. Fundamentally, logistics management is the control and supervision of the movement of goods. However, the scope of managed processes reaches far more than that.  

It involves a multitude of different factors including transportation management, freight and inventory management, materials handling, and order fulfillment. Ultimately, proper logistics management encompasses optimization processes to maximize revenues, cut manual labor, make informed decisions, and exceed customer expectations.  

what is logistics management

How Can Logistics Planning and Supply Chain Management Benefit 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 constantly optimize transportation processes and eliminate disruptions. Therefore, it has a direct impact on your customers’ satisfaction. Improved customer service can bring a good reputation to a company’s brand and help generate more business. A well-arranged and high-performing freight transportation process can significantly contribute to customer experience and exceed shippers’ expectations. Ultimately, well-handled logistics contributes to the overall positive customer experience.

Visibility and insight Cost Savings

It is important to create visibility into 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. In fact, inbound freight can account for about 40% of general supply chain costs. This means proper logistics management lets shippers tap into hidden opportunities for savings.

Key Logistics Management Goals

Before turning to external help and investing in management technology, you want to make sure it will produce beneficial results. That’s why it is important 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 look to third-party logistics providers (3PL’s) for help as this simple concept can often become very complex and difficult to execute. 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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