ISCOM 374 Week 1

Logistics in the Supply Chain

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Logistics and the Supply Chain

Logistics and the Supply Chain

Logistics is a critical component of the business supply chain and has three primary concerns which are receiving, storing and delivering a physical product. According to the Council of Supply Chain Management Professionals (CSCMP), logistics “is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements.” (Murphy Jr. & Knemeyer, 2015). Logistics “includes coordination and collaboration with channel partners which can be suppliers, intermediaries, third-party service providers, and customers” (Jones, 2012).

The term logistics itself has origins in the military but has evolved as a business concept to be a vital part of many businesses in this day and age and has differentiated into many different fields throughout the years. The four main fields within logistics are procurement logistics, production logistics, distribution logistics and disposal logistics.

“Procurement Logistics is the entire process used to select suppliers and negotiate contracts for delivery of goods or services” (Jones, 2012). This field of logistics includes market research activities, supplier management and ordering among many other tasks. Production logistics streamlines and controls the flow through the supply chain and includes activities “related to organizational concepts, layout planning, production planning, and control” (Jones, 2012). The delivery of finished products to the customer is known as distribution logistics. Distribution logistics integrates the ordering process, transportation of inventory, warehousing and material handling among others. Finally, disposal or reverse logistics” stands for all operations related to the reuse of products and materials. The main function of this field is to reduce logistics cost, enhance service, and save natural resources” (Jones, 2012)

The importance of logistics within business has grown tremendously over the years and its main purpose is to satisfy constantly changing customer requirements and behaviors. “Meeting customer demand and providing superior service is one of the most important benefits of good logistics management” (PLS Logistics Service, 2015). In addition, good logistics management also has the ability to “drive increased revenue for the company” (PLS Logistics Service, 2015) and improve the brands reputation which in turn can generate more business. Finally, good logistics management is important for a company’s cost control as it manages its inventory and the resources needed to operate it.

There are many different issues or challenges that can influence logistics and directly impact the supply chain. Two of the most important issues are changes in consumer behaviors as well as technological advancements. In terms of customer behavior, it is the constantly changing expectations of not only the product itself, but also of how quickly it can get to the customer. When considering exact products from different retailers, customers will usually consider how fast they can get this in order to make a decision of which retailer to use. This is important for logistics business managers because they need to be able to offer a fast service. For example, “logistics service providers such as FedEx and UPS offer a variety of delivery options to prospective customers. FedEx and UPS customers can choose same-day delivery, next-day delivery by noon, next-day delivery by the close of business, second-day delivery by noon, among others” (Murphy Jr. & Knemeyer, 2015). Another aspect of changing consumer behavior is the change in family roles that we now have as compared to 30 or 40 years ago. “One consequence of these changing family roles has been an increasing emphasis on the convenience associated with a family’s grocery shopping experiences” (Murphy Jr. & Knemeyer, 2015). This convenience has translated into extended store hours, different types of delivery services, and ready to eat foods. Each of these has logistics related implications that business managers must understand and consider. For example, labor hours have to be adjusted to ensure that products are delivered at optimal times without becoming a nuisance to the customers themselves. All of these changes can create challenges for logistics managers to manage inventory, suppliers and maintaining product quality throughout the supply chain. In addition, logistics managers have to look at risk in terms of supplier reliability and have to had solid plans for back ups in case they are necessary (Boariu, 2018)

One recent example of logistics managerial issue that I’ve experienced is with the recent holiday shopping season. During this season everyone wants to ensure that anything they order is delivered on time, and as promised. In order to do that, retailers and their logistics networks must work together to ensure that they have appropriate resources such as transportation networks and labor to cover the increased demand and expectations. Managers must also ensure that their productivity levels are correct in order to maintain an efficient operation.

References Boariu, N. (2018). Major Issues Facing Supply Chain Managers. Retrieved from Procurify: https://blog.procurify.com/2015/06/10/4-major-issues-facing-your-supply-chain-manager/ Jones, R. (2012, April 3rd). Logistics: What It Is And Why Its Important To Your Company? Retrieved from Logistics Degree: https://logisticsdegree.net/2012/logistics-what-it-is-and-why-its-important-to-your-company/ Murphy Jr., P., & Knemeyer, A. M. (2015). Contemporary Logistics. Upple Saddle River, NJ: Pearson. PLS Logistics Service. (2015, October 27th). Why is Logistics Management Important? Retrieved from PLS Logistics Service: https://www.plslogistics.com/why-is-logistics-management-important/