It is impossible to build effective business processes without logistics. Thanks to it, successful companies optimize production, reduce costs and increase profits.

Logistics is a field of activity that helps to predict, control and optimize the process of transferring goods, information or services from a manufacturer/supplier directly to their consumer. This activity focuses on solving practical issues and helps to reduce costs in the production, storage and transportation of goods.

Any company strives for success, trying to present competitive advantages in the market favorably. Experts make forecasts of customer needs and abilities to satisfy them in full. To do this, they need to deliver goods to the point of sale in a timely manner, without allowing a shortage.

Distribution logistics is a tool that helps to solve these issues, provided that the main postulates are observed:

  • the product is in demand;
  • the product meets all quality standards;
  • the required number of units of goods has been delivered;
  • the delivery was made within the agreed time frame;
  • the order was delivered to the place specified in the contract;
  • the delivery took a minimum of the company's costs.

The goal of the logistics department is considered achieved if the cargo, which has not lost its vendibility during transportation, was delivered at the right time to the right place. The cost of delivery from the manufacturer to the store shelf is one of the highest, and they directly affect the final cost of production.

Courier work is also included in logistics and affects the final cost of any product, even if you are promised free delivery.

Logistics teaches you to optimally distribute loads and resources. Irrational use of human resources and transportation costs significantly reduce the overall profit.

For example, the company abandoned the courier delivery of documentation and replaced it with an electronic document management. Thus, it involved information logistics. The time for receiving important papers and the method has been reduced, the process has become cheaper (no need to pay for the paper and for the courier's work).

Tasks that logistics solves:

  • choice of transport (freight, railway, aviation, sea transport);
  • distribution of goods in containers for safe transportation;
  • compilation and optimization of delivery routes;
  • cargo transportation;
  • inventory management (distribution, dispatch, re-order);
  • safe storage in warehouses;
  • application of markings required by law;
  • tasks related to customs, and many others.

In simple words, logistics takes control of any flow (material, financial, information) and optimizes it. Its goal is to increase economic efficiency by:

  • demand forecasts;
  • arranging routes;
  • selection of methods of delivery of finished products;
  • procurement management;
  • inventory monitoring in order to determine liquidity and reduction of production time.

According to experts, a properly debugged transportation process reduces the path of goods from the warehouse to the shelf by up to 40%, and the increase in profit reaches 15%.

Transport operations

Supervises the direct shipment of goods from one point to another. It consists of several separate, but closely related links:

  • determination of optimal delivery conditions;
  • selection of a suitable vehicle;
  • route planning and reduction of fuel costs;
  • control over the delivery process;
  • organization of personnel work (production, warehouse, movers, drivers).

Transport logistics is responsible for the entire path of the goods from the supplier to the consumer. Sometimes the delivery is carried out from another country or continent. Despite the well-developed air transport network, about half of all large-sized cargo transportation accounts for sea and river transport. The reason is the cost: it costs significantly less to deliver cargo by water than by air.

For example, the manufacturer does not have its own transport department. The logistician selects contractors — a transport company, security, determines the optimal route and calculates how to save on fuel.

Procurement logistics

Procurement logistics is necessary to start the production process: the company purchases the necessary resources and only after that starts production, starting the chain from the manufacturer to the end consumer. No large-scale production can do without a purchasing logistics department. This department:

determines the number of necessary components to start production;

identifies the best offers on the market, calculates the budget and conducts negotiations with suppliers;

organizes delivery to production, accepts the delivered resources, transfers them to the warehouse and stocks.

Distribution logistics

It helps to achieve the ultimate goal of production — entering the market and selling finished products. Distribution logistics is also called marketing. It is aimed at improving the level of service, product quality, reducing travel time from the manufacturer to the shelf, and therefore making a profit.

Customs operations

Solves several tasks related to the transportation of cargo across the border, such as:

  • transportation of goods abroad;
  • documentary support (obtaining certificates, customs clearance);
  • ensuring the safety of cargo;
  • assessment of the fulfillment of customs requirements.

Customs logistics requires a high level of knowledge in the field of international legislation, as well as in economics.

Stocks

Controls the available stocks of goods and materials for uninterrupted production at the lowest cost. Stocks help the company to respond quickly to increased demand, to protect itself from the risks associated with the failure of supplies of consumables, to participate in wholesale transactions.

Warehouse

It helps to optimize costs, taking into account the shelf life of products, competently using warehouse space, applying zoning principles. Warehouse logistics includes accounting of stored commodity items, organization of a reserve and building up the processes of receiving and unloading goods.

Ecology

Large companies try to adhere to the principles of ESG (which includes responsibility for production, social activity and a modern approach to management), so this vector of development is gaining popularity. He controls the production and disposal of waste from it, as well as the collection of packaging from the consumer for its further processing, destruction or safe storage.

Many modern companies try to comply with environmental logistics. Only natural lighting is used in production facilities, reducing electricity consumption. Production waste is carefully collected and disposed of in a harmless way, and they also organize the collection of packaging from their goods for reuse on their own. Environmental logistics teaches you to control carbon dioxide emissions, use electricity from renewable resources, environmentally friendly fuel and bicycles for couriers instead of cars.

Logistics chain management

Absolutely any product is produced thanks to logistics chains. They form the final price of a certain product that we take from the shelf in the store, at the order pick-up point or from the courier's hands.

The general concept of the chain is based on three actions — the purchase of necessary components, the production of a product, and the sale of manufactured goods. But the more additional actions in the chain, the higher the cost of production. Failure or chaos in the built system provokes delays in production, rising costs (for example, for storage or additional purchase of missing components), termination of contracts and a blow to the image.

The introduction of logistics chains into production, that is, the structuring of processes, improves financial performance. For example, sales are growing or shipping costs are decreasing. In order for the chain to function, it is necessary to plan each of the points:

  • supply of components;
  • production;
  • pricing policy;
  • promotion;
  • warehouse logistics;
  • demand forecast;
  • possible expansion of the assortment.

The results of the forecasts form tasks for each link of the chain, thus all its work is adjusted.

Profession of a logistician

Each of the logistics directions implies its own subtleties and requires the necessary skills and knowledge. But in general, the logistician's job is to plan, control and optimize. A professional in this business responds quickly and competently to emergency situations, is able to conduct in-depth analysis and predict customer demand, develops routes and improves them.