Logistics in Supply Chain Management

Logistics is a Part of the Supply Chain

• Logistics is a part of the supply chain process that involves planning, implementing, and controlling the efficient flow and storage of goods, services, and related information.
• Logistics functions between the point of origin and the point of consumption.
• Logistics focuses on moving and storing goods between different supply chain organizations.

Logistics Responsibilities

• Plan how to move goods from one place to another, store those goods, and produce the right information and documents for efficient reporting and processing.
• Implement the movement and storage of goods using multiple types of transport and arranging for short- or long-term storage.
• Control how goods move, through fleet management, shipment tracking, technology, sharing information and working with partner organizations in the supply chain.

Logistics Processes

• Efficient transport and storage of goods is a key part of logistics.
• Logistics providers use a variety of land, air, and ocean assets.
• Containerization for moving goods between types of transportation ("intermodal" transport).
• Store goods until they are needed further down the supply chain.
• Distribute products to the end customer (Last Mile Delivery).

Types of Logistics Organizations

• In-house logistics: Large organizations may have their own logistics functions.
• Logistics Service Providers (LSPs): Companies that provide management over the flow of goods and materials between points of origin to end-use destination. They can handle shipping, inventory, warehousing, packaging, and security functions.
• Third-party logistics (3PL): These are specialist logistics providers who offer a suite of services, such as freight by air, rail or road, or specialized transport and storage facilities.
• Reverse logistics: Focus on returning products to manufacturers.
• Warehouse providers: Store goods but don't handle transportation.
• Courier shipping: Deliver products to end customers and specialize in last-mile deliveries.

Supply Chain Framework

• Represents the connections and collaborations between suppliers, manufacturers, logistics businesses, wholesalers, retailers, and end customers.
• Supply chain process starts when an organization needs to source a product or service.
• The supply chain is the overarching framework for sourcing, manufacturing, and supplying products.