STUDENTS' CORNER - 107

Logistics Management

Having seen briefly the major objectives of the logistics, let us look into ‘Logistics Management’

Logistics Management is actually an integral component of a larger area of operations called supply chain management. Logistics management is a necessary means for the supply chain management.

The singular goal of the supply chain management is to carry out customer service without hitches so as to satisfy the customer’s needs through movements of the products from the place of origin to the place of consumption.  It is a continuous business process that keeps the trade going. We will see more of supply chain management later. 

Logistics management focuses on reducing the logistics cost for the company through prompt delivery of the goods or services to the customer. We have already discussed this aspect while dealing with the objectives of the logistics. In fact, logistics management coves all those topics we have studied under the objectives of the logistics and there is something more.

Logistics management focuses on every activity involved in the business process. The range and scope of activities of the logistics management differ from company to company dealing with the same kind of product and differ depending on the nature of the business the company is engaged. For example, the total activities of a company which is engaged in procuring and supplying raw materials needed for manufacturing a specific product differ from the activities of a company that is exclusively engaged in marketing the product. Of course, it must be borne in mind that all businesses are governed generally by the basic principles of management which, to say briefly, include planning, implementing, staffing, so on.

In short, any efficient logistics management must adopt best practices which ensure sustainability to the enterprise, meaning taking care of the bottom line of any enterprise. And the heart of any best practice promises maximum advantage to the company and all its stakeholders fairly.

Let us look at some of the elements included in logistics management.

To begin with: Vendor selection.  The success of any business activity depends on the right selection of a vendor. Vendor is supply chain management term. It refers to any individual who supplies goods or services to any individual or to any company. He may or may not be a manufacturer of a product though generally he is manufacturer of inventoriable items.  The selection of a vendor must be cost effective in terms of quality of service; he must deliver the goods right in time in the right quantity with the right quality. It implies that the vendor must be in a position to provide good transportation facilities. The vendor must be able to choose most effective route for transportation.  A wrong decision at any level for any business activity will entail loss of money and at times loss of a good customer.

From this we can understand that logistics management is all pervasive in the business domain. 

Let us look into some more details in our next session.