What is logistics?
www.investopedia.com gives the definiation of logistics as : Logistics is the whole process of managing how resources are acquired, stored, and transported to their final destination. A person who oversees the process is called a logistician.
What are the 10 activities of logistics?
There are 10 common activities in logistics. If you work in logistics field, i am sure your job will involve in some of these activities.
- Inbound transportation
- Outbound transportation
- Materials handling
- Packaging
- Order fulfillment
- Warehousing
- Inventory control
- Reverse transportation
- Operation planning
- logistics optimization
Importance of logistics
if a business succeeds it must have a successful logistics system. if a business fails, its logistics system must have problems. A good logistics system helps a company to succeed. A poor logistics system deteriorates the business.
Success in logistics not only means on-time delivery, high customer satisfaction to a business but also leads to higher production rates, better inventory control, lower warehouse cost, etc.
For example, in manufacturing environment, their logistics include transporation of inbound raw material, outbound of finished products, truck management, warehouse and distribution utlization management. An efficient logistic system is crucial to reduce costs and increase efficiency. Poor logistics lead to untimely deliveries, failure to meet customers’ needs, and eventually causes the business to fail.
7 R’s for logistics
7’Rs are standard to measure how good or poor your logistics system is
What are the 7 Rs? The Chartered Institute of Logistics & Transport UK (2019) defines them as:
Getting the Right product, in the Right quantity, in the Right condition, at the Right place, at the Right time, to the Right customer, at the Right price.
Right product
It is very important to give the right product to customers. Right product means right color, right size. The product shipped out should be exactly what customers ordered.
Right quantity
Ship right quantity is not only important to customers but also to your business. If you ship more to one customer that means you are short to fulfilling other customers’ orders. this, in turn, will lower your sales revenue and customer satisfaction.
Right condition
The product’s condition can be new, used, or refurbished. Ship the right condition product according to the customer’s request. Ship the wrong condition product to customers will lead to unhappy customers and yourself to suffer revenue loss.
Right place
Always ship the product to the correct delivery address. Return shipping, never delivered product both will double the shipping cost to your business
Right time
Time is everything to customers. Customers might purchase this product for a special event, such as a birthday or anniversary. Once you miss the time you ruined everything. This customer may never come back.
Right customer
It is a huge waste of time and money to ship products to the wrong customers. To fix this mistake you have to double the labor cost in the warehouse, double the shipping cost, and deal with unhappy customers.
Right price
Price is king in the market. You have to come out with a strategic price that not only keeps your price competitive but also leaves room for profit.
4 modes of transportation in logistics
Ship
Based on oecd.org that over 90% of international trade uses the sea route to ship goods. so the ship is a vital transportation mode in international business.
Plane
Airfreight is an indispensable part of international transportation modes. Many time-sensitive industries such as seafood, flower, fruit, pharmaceutical depend on air shipping to do business.
Train
Train or rail is the most important intermodal transportation that connects major ports with domestic cities.
Truck
According to the America truck association, Trucks move roughly 72.5% of the nation’s freight by weight. The truck is closely linked with our everyday life. The majority of your grocery, HomeGoods are moved by truck.
what is logistics explained in below video
Is logistics the same as supply chain management?
Logistics is not equal to supply chain management. The supply chain system has a very broad category that starts from sourcing, procurement, vendor management, all way to delivery to the final destination. Logistics is only a part of a supply chain system.
What does logistician do?
Each logistician has a different job scope based on their job title. Overall the logistician is the person who oversees the process to move a product from point A to point B.
What skills do you need to be a logistician?
Many unforeseen problems might happen, when the cargo is on the water or on the road. Basic skills that a professional logistician should have: calm under pressure, problem-solving, adaptability, good communication skill, good math skills, etc.
Calm under pressure
Have the ability to handle pressure and work under pressure. For example, when containers arrived at US port, you only have 4 days free time to pick up the container. If the document is not correct or if the truck comes in late, any of these kinds of incidents can delay the container release and lead to demurrage. It is not a big deal to pay $200 demurrage for one day if you only handle one container. how about you handle 20 containers with one-week demurrage then it sums up to $20,000. Getting a job done during a narrow time frame is critical to a professional logistician.
Problem solving skill
The ability to plan under pressure and solve problems can help you in a logistics career
Adapability
Many things could happen during the transition of goods. A professional logistician must act quickly on sudden changes, and adapt to situations seamlessly.
Communication skill
The ability to communicate clearly and efficiently is a plus skill for people in logistics. As a logistician, you are constantly communicating with customers, suppliers, and carriers.
Mathematics:
You do use maths a lot as a logistician. You calculate shipping charges based on cargo’s weight, size, and transportation mode. Many jobs in logistics require you to think mathematically and crunch numbers.
What kind of jobs are in logistics?
According to indeed.com there are 13 jobs that are very popular in logistics
1, logistics coordinator
A logistics coordinator works to arrange the transportation of goods from one place to another. They prepare shipping documents, communicate with people involved in the transportation.
2, logistics specialist
Logistics specialists are the person to oversee the entire shipping process for a company. They will address any issues associated with the shipping process. They work with people internal or external to make sure the shipping process is smooth and successful.
3, Inventory analyst
Inventory analysts are logistics specialists who control inventory levels, cut inventory costs and manage day-to-day inventory operations.
4, Warehouse manager
Warehouse managers manage the day-to-day operation of warehouese, such as load, unload truck, containers. They also have the responbility to train and monitor all warehouse employees.
5, Inventory manager
The inventory manager’s key responsibility is making sure that companies have enough inventory for sales at the same time keep inventory levels low. Carrying too much inventory than needed is an extra cost to the business. Carrying just enough inventory is the inventory manager’s goal.
6, Fleet manager
Fleet managers manage the purchase and maintenance of company vehicles.
7, Logistics manager/8,Transportation manager
There is not very much difference between logistics manager and transportation manager. Logistics managers focus on creating logistics strategies. Tranportation managers focus more on the execution of strategy.
9, Logistics analyst
Logistics analysts use data to find valuable information to improve a company’s logistics efficiency, lower logistics cost.
10, Purchasing manager
Purchasing manager’s job is to purchase quality material or products under the company’s budget
11, Landman
Landman is responsible in negotiate price and buys land for business
12, Demand planner
Demand planners use historical data, analyze customer’s buy habits to plan for demand
13, Supply chain manager
Supply chain managers are accountable for a company’s success in the supply chain system. Logistics is part of the supply chain system, so the supply chain manager is also responsible for the logistics system’s efficiency.
Resources:
https://www.investopedia.com/terms/l/logistics.asp
https://www.futurelearn.com/info/courses/principles-global-management-logistics-assets/0/steps/65241
