Tag Archives: logistics management

What Is Logistics Management and Why Is It Important?

As freight volume grows and transportation becomes more complicated, the need for robust logistics management increases. Logistics management is 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 is one of the goals of good logistics management.

What is Logistics Management?

According to the definition of 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.

what is logistics management

How Logistics Management Can Benefit You?

Increased customer satisfaction

Consumers demand better service, and this mandate creates a need for shippers to provide fast, accurate and quality service. Good management strategy is aimed 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. The smoother the freight moving processes are within and beyond your company means that you will provide more value to your clients. Ultimately, well-handled logistics contributes to the overall positive customer’s 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 a business. Logistics managers can use this information for process optimization and avoiding potential disruptions. TMS data analysis keeps a company’s supply chain moving more efficiently, all while gaining operational insight.

Cost Savings

Managing logistics on a proper level 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.

Key Logistics Management Goals

Essentially, before turning to external help and investing in management technology, you want to make sure it will bring beneficial results. That’s why it is important to know how to measure the effectiveness of any new practices.

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

Many companies look to third-party logistics providers (3PL’s) for help as this simple concept can often become very complex and not so easy to execute. 3PL’s have the expertise and advanced technology to cut costs and improve processes much more efficiently than companies can in-house.

Learn more about PLS Management Services and contact us now for a free logistics analysis!

The Difference Between Logistics Management and Supply Chain Management

Shippers often confuse the terms “logistics management” and “supply chain management”. Each word is used to describe very similar functions and operations in the transportation industry. However, there is a difference between these terms.

What is the difference between logistics management and supply chain management?

Most professionals in the US determine logistics as a subcategory of supply chain management. However, in Europe, Logistics Management (LM) is considered to be a more widespread concept than Supply Chain Management (SCM). The US model is described in our previous post.

  Logistics Management Supply Chain Management
Definition Logistics management refers to managing the flow of goods, information, and resources from the beginning point of external origin to the point of consumption and reverse. Also, logistics has a vital effect on shipped goods and includes all activities involved in the shipping process. Logistics manages the flow within a company and between a company and its suppliers and customers. Supply chain management is control over integrated network processes, providing the end customer with a product or service and meeting all his/her requirements. It includes numerous aspects of logistics management and demand planning which coordinates processes within and among companies.
Processes
  • Planning
  • Scheduling
  • Implementing
  • Material handling
  • Packaging
  • Distribution
  • Storage of Goods
  • Coordination among carriers
  • Fleet management
  • Control Procedures
  •  Logistics flows
  • Customer Order Management
  • Manufacturing
  • Distribution
  • Cost Allocation and Control
  • Third Party Collaboration
  • Management of Supply and Demand
  • Negotiating Pricing
  • Inventory Control

The confluence of two concepts: difference between logistics management and supply chain

Strategy and coordination of product flow are basic concerns of LM. They intersect with many aspects of supply chain management, like distribution and inventory control. Eventually, logistics can be seen as a big puzzle piece, fitting only where it’s meant in the bigger SCM picture. Depending on the company’s size and specialization, logistics management and supply chain management might be bumped into one management mechanism that involves all functions.

Differences between logistics management and supply chain management:

Logistics management mostly involves transportation functions, focusing on short term goals. LM concentrates on getting freight from point A to point B – on time and in the most cost-efficient way possible.  Also, it includes creating partnerships with trucking companies.

Supply chain management controls a broader number of functions and concentrates on achieving customer satisfaction and maximizing profit in a long-term way. Also, SCM covers the management of supply and demand, control over cost allocation and all collaborations with 3PLs.

Learn more about our supply chain management services and contact us for the supply chain advice!

The Importance of Logistics Management

Importance-of-logistics-managementLogistics management is an integral factor in the success of any manufacturing company’s operations and has a direct impact on their bottom line.

How is Logistics Management Defined?

“Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements.” – Council of Supply Chain Management.

In its’ most basic form, logistics management is the control and supervision of the movement of goods, however, the scope of logistics management can be far more reaching than that.

The sphere of logistics management involves a multitude of different factors.  Transportation management, freight and inventory management, materials handling, and order fulfillment are just a few of the factors that must be considered when it comes to logistics management.

Many companies look to third-party logistics providers (3PL’s) for help as this somewhat simple concept can often become very complex and not so easy to execute.

How do you know if a logistics management operation is efficient?

An effective logistics management operation should yield 4 key results:

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

When the stars align and all of your logistics processes are streamlined, you should expect to see these results where they matter most: your bottom line.

To learn more and see firsthand how a 3PL can help you manage your logistics; contact us today for a free Transportation Cost Analysis.