Logistics Management Overview

Study Notes

Logistics refers to the effective flow of goods, information, and finances, impacting business objectives and profitability.
Logistics costs can constitute a significant portion of overall expenses, ranging from 20% of product pricing to 25-45% of total costs.

Logistics management is a core component of supply chain management, ensuring the efficient movement and storage of goods between origin and consumption to meet consumer needs.
Inbound and outbound transportation coordinates the movement of goods, supported by fleet management and warehousing.
Efficient materials handling and order fulfillment processes guarantee accurate product handling and timely delivery.
Logistics network design and inventory management balance costs and availability, while supply/demand planning aligns operations with market needs.
Managing third-party logistics, strategic sourcing, and production scheduling ensures supply chain resilience.
Customer service, strategic planning, and tactical adjustments maintain responsiveness and long-term success.

Inbound/Outbound Transportation: Manages movement of goods to/from manufacturing and distribution centers.
Fleet Management: Optimizes transportation vehicles for efficiency.
Warehousing: Stores goods safely and ensures accessibility.
Materials Handling: Manages product movement within warehouses.
Order Fulfillment: Processes and delivers customer orders accurately.
Logistics Network Design: Plans efficient distribution center locations and routes.
Inventory Management: Balances inventory levels to meet demand.
Supply/Demand Planning: Forecasts needs and adjusts operations.
Third-Party Logistics Management: Oversees external logistics providers.
Sourcing and Procurement: Acquires materials cost-effectively.
Production Planning and Scheduling: Aligns manufacturing with supply chain capabilities.
Packaging and Assembly: Prepares products for safe shipment.
Customer Service: Addresses customer needs and resolves issues.
Strategic Planning: Sets long-term logistics and supply chain goals.
Operational Planning: Manages daily logistics activities.
Tactical Planning: Implements short-term actions to respond to needs and market changes.

International logistics involves a multi-phase process, often beginning with suppliers delivering products to regional fulfillment centers.
Goods are then shipped globally via air and sea transportation, arriving at local distribution hubs.
Finally, delivery trucks ensure products reach the customer swiftly.

Global trade growth is driving demand for international logistics services.
Effective logistics infrastructure and operational processes are crucial for successful global trade integration.
The global logistics industry is projected to grow at a compound annual growth rate (CAGR) of 9.35% from 2024 to 2033.

Air Cargo: Booming due to e-commerce's need for fast delivery, particularly for high-value and time-sensitive goods.
Ocean Freight: Facing challenges but remaining crucial. Innovations like LNG fuel and digital tools are improving efficiency and sustainability.
Rail Freight: Offering a cost-effective and environmentally friendly alternative to road transport, particularly for long-distance bulk cargo.
Road Freight: Evolving with automation, AI, and electric trucks, addressing issues like driver shortages.
Last-Mile Delivery: Undergoing transformation with drones and micro-fulfillment centers near cities, accelerating deliveries and reducing costs.

Competitive Pricing: Access to more competitive pricing due to wider sourcing options.
Wider Product Ranges: Ability to offer a greater variety of products to customers.
Fulfill Larger Scale Orders: Capacity to handle larger order volumes due to increased supply chain resources.
Reach New Marketplaces: Open doors to new markets, expanding business reach and customer base.

Push System: Production based on forecasts, focusing on pushing products through the supply chain.
- Pros: Provides stability and allows for inventory control.
- Cons: Risk of overproduction and high storage costs.
Pull System: Production triggered by customer demand, focusing on pulling products through the supply chain.
- Pros: Offers flexibility and reduces inventory costs.
- Cons: High dependency on supplier reliability.

Sustainable distribution practices include eco-friendly transportation, optimized warehousing, and reverse logistics.
These practices reduce environmental impact and improve operational efficiency.
Implementing eco-friendly distribution can potentially reduce transportation costs by 15-20%.

Business digitalization is impacting production and organizational structures.
Technology plays a crucial role in promoting sustainable distribution practices by optimizing logistics operations and reducing environmental impact.