The logistics industry is growing rapidly across the globe. In fact, the logistics market is anticipated to reach $15.5 trillion in value by 2023.
To reach this market valuation, the industry will grow at a 7.5 percent clip. Despite being a multi-trillion dollar industry, many people do not know exactly what logistics is.
Read on for a comprehensive guide to logistics management. Learn what logistics managers do and more about their duties and responsibilities.
What Is Logistics Management?
Logistics is a broad and wide-reaching competency. In its simplest form, you can think of logistics as supply chain management.
This is the process of ordering a raw material and delivering a final product to an end user. There are so many different logistics activities that occur between these 2 points.
For example, you have the packaging, handling, storage, and transportation (PHS&T) of material. Also, there are many other functions like inventory management and quality assurance.
Logistics management boils down to overseeing this entire process. This involves the management of human, financial, and physical resources.
Why Is PHS&T So Important?
PHS&T is critical to delivering quality products to your customers. For starters, the material must be packed safely to avoid damage during transportation.
This is especially important for fragile, expensive material such as computer electronics. Other equipment requires extensive crating. This means it has the ability to shield the material from water intrusion or shock impact.
The storage element is a critical component of inventory management. It is necessary for your company to protect its physical assets. Also, the process must be in place to quickly identify material from inventory. Then, it is prepared for final shipment.
Finally, the transportation piece links the entire process together. This is how raw material is delivered to a manufacturing plant or an end product to a retail store.
Transportation involves many different carriers including ground, air, rail, and sea. The logistics manager makes the best choice from a cost and schedule perspective.
Is Data Collection and Forecasting Required?
A major part of logistics management is pre-procurement forecasting and analysis. This involves supply versus demand analysis to determine order volume.
Also, logistics teams perform analysis to determine when to place an order. When inventory falls to a certain level, the logistics manager must initiate a new order.
These determinations include consideration of external factors such as supplier lead time. They also may involve seasonal weather patterns and other events that extend supplier lead time.
Accurate forecasting requires a significant data collection effort. These important logistics decisions cannot be made subjectively. To optimize logistics operations, only fact-based decisions are made. They are also supported by robust data analysis.
Wrapping It Up
This is the tip of the iceberg for the supply chain management process. There are hundreds of different logistics activities that take place to optimize operations.
That said, logistics elements like PHS&T are still critical to business success. It is imperative to preserve valuable assets and ensure their timely delivery. If you want to learn more about logistics management, please contact us for guidance.