Logistics functions – Goals,main activities in a business
We have already discussed why Logistics management is so important in our previous post.Today in this post we will discuss about Logistics functions,main activities and goals.This will give a complete information regarding how a logistic helps business.
Top Logistics functions
1. Customer Service
- Customer service serves as a binding and integrated force for all logistics activities.
- Each component of the logistics system can affect whether the customer receives the right product for the right time at the right price, in the right position, at the right price.
- Customer service involves the successful implementation of the integrated logistics management concept to provide the required level of customer satisfaction at the lowest possible cost.
2. Order processing
- The starting point of physical distribution activities is the processing of customers' orders. To provide quick customer service, orders received from customers must be processed within the shortly possible time. One of the best example is Flipkart's own supply chain service Ekart.They process order very fast and deliver 1 to 2 days.A strong logistics network makes a brand more reputed and trusted.If you are interested you can become part of Ekart logistics franchise,its a leading logistic chain company from Flipkart.
- Order processing includes receiving orders, recording orders and assembling all such orders for transportation, etc. Customers get benefit when these steps are done quickly and accurately.
- The mistake made at this stage may be the reason of big loss. For example, if the same product with an incorrect product or specific specifications supplied to the customer, then it can lead to the cancellation of the original order (in addition to the loss in the firm's reliability). ‘
- Similarly, if the command is not executed within a reasonable time, it can be delay. High-speed data processing techniques are now available that allow for faster processing of orders such as EDI.
- Warehousing means storage and asorting products for creativity utility.
- The basic purpose of warehousing activity is to arrange the placement of goods, facilitate storage to store them, consolidate them with others' products, divide them into small quantities and manufacture classification products.
- Usually, the higher the number of warehouses, a firm can serve products to customers at different locations easily. But it also has higher the cost for maintaining warehouse.
- Thus, the firm has to maintain a balance between the storage of customer service and the level of cost.
4. Inventory Control & Management
- There are inventory decisions associated with warehousing decisions that particularly hold think for the success of physical delivery where inventory costs as high as 30-40 percent (e.g., steel and automobiles).
- No wonder, that's why, the new concept of just-in-time-inventory is becoming increasingly popular with many companies.
- The decision regarding inventory level includes an estimate of the demand product. A correct estimate of demand helps keep proper inventory demand and control inventory costs.
- It not only helps the firm in terms of inventory costs and supplies to customers in time, but also to maintain production at a consistent level.
- The major factors determining the list level are:-
- Firm's policy about customer service level, degree of accuracy of sales forecast,
- Delivery system feedback i.e., the capacity of the system to transmit inventory is required for the factory and they get the products in time.
- The cost list includes costs (such as the cost of storage, tying up capital and obsolescence) and replenishment costs (including thematic cost).
- Transport attempts to transfer goods from points of production and sale of consumption in the required quantities in times and areas of need.
- The transport system adds time and space utilities to the use of goods, increasing their economic value.
- To achieve these goals, transport facilities must be adequate, regular, reliable and equitable in terms of facilities provided.
6. Monitoring of information
- Physical distribution managers needs to up-to-date about frequent inventory, transportation, and warehousing.
- For example, with regard to inventory, each location constantly requires information about the current stock situation, future commitment and replenishment capabilities.
- Similarly, before choosing a carrier, information about the availability of different modes of transport, their cost, suitability for services and additional product is required.
- Information about warehousing, regarding space usage, work schedule, etc. is required.
- To get all the information mentioned above, an efficiency will be highly used in controlling the information system, improving services and determining the overall effectiveness of delivery.
- Of course, it is difficult to accurately assess the cost of physical delivery. But if the right information is available, it can be analyzed and a great deal of savings can be ensured.
- Specialized logistic facilities are manufacturing plants, warehouses, cross-dock operations and retail stores.
- Whether facilities are owned, leased or rented, the location of the plant and warehouse (storage facilities) is extremely important.
- Strategic placement of plants and warehouses can help firms to establish customer service levels.
- Proper accommodation may also allow volume related transportation rates from plant to warehouse, plant to plant, or from warehouse to customers.
Goals and objectives of logistics management
A logistics company provides storage, distribution and transportation.It helps organizations to manage to go along with the flow of materials into the supply chain. To be powerful in a multi-channel operation in the supply chain, it is necessary miles for control to accomplish five goals:
- Increased efficiency
- Improved customer service
- Increase in sales
- Improved relationships
- Use the best logistics software
Hope these above information will help you to know about logistics activities and its role towards business.If you still have any query regarding Logistics functions,you can comment below.