logistics – Physical flow of materials from point of origin to point of use; the organised movement of materials, goods and sometimes people
To remember what logistics means use the following mnemonic:
My little lodger kept statistics (logistics) of all my movements in the house, including all the materials and people I moved in and out.
Once the supply chain management team have decided on the best suppliers to use for a factory and have designed the system needed, then the physical logistics needs to be agreed. Logistics is part of supply chain management. Logistics is the packaging, transportation and warehousing of each product. It’s about moving and storing stuff.
Logistics covers inbound products where you have to consider handling, storing and transportation of raw materials, and outbound logistics which covers collection, maintenance and distribution to the customer.
Logistics is a complex and challenging area of operations, but it is also essential for the success of many businesses. By optimising their logistical operations, businesses can improve efficiency, reduce costs and improve customer satisfaction.
Supermarkets are giant logistical operations and one of the ways they have increased profitability in the past is by re-evaluating how they manage logistics.
Amazon has completely reinvented logistics for retailing by building huge regional fulfilment and sorting centres using digital product warehousing technologies and thousands of robots aiming for full automation.
The following quotes are not specifically business related, but show the importance of logistics to world and military leaders:
“The amateurs discuss tactics; the professionals discuss logistics” – Napoleon Bonaparte (Emperor of France).
“You will not find it difficult to prove that battles, campaigns and even wars have been won or lost primarily because of logistics.” – Dwight D Eisenhower (WW2 General and US President).