What is Logistics?

Image of Logistics freight boat

July 15, 2021

Logistics refers to the overall process of managing how resources are acquired, stored, and transported to their final destination. Such as the movement of products by land, sea or air around the world. The term is used widely in the business sector, particularly by companies in the manufacturing sectors, to refer to how resources are handled and moved along the supply chain.

The three types of Logistics
  • Inbound Logistics is concerned with activities related to the incoming flow of resources needed to make a product or a service. Inbound logistics processes may include managing suppliers, costs, inventory, and transportation to ensure the right components or subassemblies arrive in your factory on time. Inbound logistics is generally complex because hundreds of parts are coming in to manufacture one final product. Therefore, it tends to be more intricate than outbound flow.
  • Outbound Logistics refers to activities in delivering the right product at the right time to customers at a minimum cost. Customer satisfaction is the primary objective of outbound logistics, that is why many organisations, especially e-commerce companies, are competing for last-mile or same-day delivery to their customers. The stages of outbound logistics go from the warehouse, where the items are stored from production, to the distribution centre, then the retailers who store the products for the end-user, finally the customer comes to collect their package.
  • Reverse Logistics is moving products from the end-user back to the origin to recover value or for proper disposal. The value is recaptured from products recovered from customers through rework, refurbishment, reuse, scrap recycling, or government incentives for recyclable products. Product returns come in different forms, including the commercial return, recall, refurbishment, or product’s end-of-life. Companies must have systems and infrastructure in handling returns to minimize recovery costs, increase recaptured value, and increase visibility.
What is fulfillment?

Logistics also includes Fulfilment, which is the storage and distribution of products. It’s when goods are picked, packed and dispatched to customers, usually on the same day. A retail fulfilment partner is responsible for receiving stock into a warehouse, the storage of those goods and is also responsible for delivering the product.

Below are some more examples of Logistics:
  • Inbound transportation.
  • Outbound transportation.
  • Fleet management.
  • Warehousing.
  • Materials handling.
  • Order fulfilment.
  • Inventory management.
  • Demand planning.

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