STUDENTS' CORNER - 115

In this session, we propose to spend some time on ‘The Role of Logistics in Supply Chain Management’.

Almost all the fundamental principles of business find place in any discussion on business-related area like, say, logistics and supply chain management, business administration, marketing and sales, distribution, so on.

Under logistics we have discussed almost all the significant aspects of business which involves necessarily what is called supply chain. Today, the most popular area of study is supply chain management.

We know business deals with selling products or services generally; this in turn implies that business involves manufacturing products and selling or offering services, all at a cost that guarantees some extra-money in the process of business; the extra-money is well-known as profit. Businesses thrive on profit and business without profit is like a human being without breath.

Logistics ensures the supply of materials to the parties concerned in right time in right quantity in right quality and in right shape to the right customers. Required raw materials must reach the manufacturer of the products using those raw materials; the manufactured finished products must reach the customer; in between, if there are intermediaries, there must be, the products must reach the whole salers and the agents; then, from the wholesalers or the agents, they must reach the retailers and from the retailers finally the products must reach the end-user, the customer. Thus, in all intermediate stages of movements of the products, there must be no delay or fault and managing all these movements of the products through carefully selected channels of distribution, efficient transport must be arranged. All these very basic tasks come under logistics. Efficient logistics sees to it that all necessary materials, be they raw materials or finished materials, move in the right direction so that the specific business planned and executed is accomplished to the satisfaction of all the parties concerned. From procuring and supply of raw materials to delivery of the product to the customer, it is the responsibility of the logistics manager.

Again, warehousing, that is storing the products safely when needed is also part of logistics management. Not only storing the finished products safely but also storing the required raw materials and other machineries for need is also a very import duty of the logistics manager. Indeed, he also plays a critical role in the accounting of the company. These facts are generally discussed in inventory and accounts.

The essence of efficient logistics rests on providing superior quality service to the customers; it only means that the needs of the customers must be adequately met to the satisfaction of the customers. Nowadays, it is being talked about that mere satisfaction of the customers is not enough; the customers must be delighted.  A delighted customer prefers to stay with the company even in the face of severe competition for the product he uses.

 Efficient logistics management creates visibility for the company at every possible opportunity and it ensures ultimately revenue generation to the company through successful management of the supply chain.

 

Many companies choose 3PL to carry out some of their logistics functions.  We will look into 3PL logistics in our next session.