A way a business or startup runs in this digital age has a massive impact on the industry and its sustainability.
The long term survival of a newly set up business lies in the adding of professionalism in every core area as well as making allotments for better operations and growth.
As and when a business starts to expand, the company faces numerous problems in the form of:
- customer or client complaints,
- a defective piece of a product gets delivered,
- competition in new product offerings and
- raw material procurements,
- supplier credit terms,
- bad packaging, etc.
And to service, all these variants of problems methodologically requires separate experts in separate departments.
Separate functions in the form of departments will ensure specialization in each of its core areas with recruitments made of experts in that respective core area.
And swift and easy solving of various problems.
Into this domain is the function of Logistics and its management worth mentioning.
Across the supply chain of a business lays the set of collective activities of rendering the manufacture of products and services and its final delivery to the customers.
Necessarily, the logistics function in a company entails B to C type of marketing and all sorts of activities enabling ease of consumption of products and services for the final consumers.
Logistics management can be termed as the planning and controlling the efficient flow and storage of goods and services from the point of origin or manufacture to the end of final consumption.
ELEMENTS OF LOGISTICS MANAGEMENT
Below mentioned are elemental functions forming part of logistics management:
- INVENTORY MANAGEMENT
This is one of the main parts of handling a company’s logistics.
Taking care that the right quantity of inventory of raw materials is always present at the right time for its further processing is crucial.
And finished goods are well kept, ready for transportation and sales without any pilferage should also be ensured.
Many types of inventory problems like:
Insurance: Insurance of the finished goods has to be taken for better safety prospects;
Storage: the type and hygiene factor of the warehouse matters for the right preservation of raw materials as well as finished goods;
Damage: Incur no or less number of damage when the raw materials are transported from the supplier to the godown, and this even applies to the final goods for sale; and
Pilferage: the security aspect of the godown should be to make sure so that no amount of raw material or finished goods get stolen either in transit or while in the warehouse
Concerning raw materials: Additionally, as part of inventory management, the placing and scheduling of various kinds of orders from the raw materials supplier are also essential.
The timely availability of raw materials will only ensure that the manufacturing process does not get delayed due to any reasons.
- WAREHOUSING AND STORAGE
It is another function forming part of logistics. Warehouses house the raw materials and finished goods till the time they transport for either further processing or final sales.
And so the manner the goods are stored, the type of warehouse
- Nearness to final consumers
All these main pointers of the warehouse and godown do matter for a growing business.
At this stage, an entrepreneur might feel the crunch in working capital, as the more facilities, a warehouse has, the rates of its rent becomes more significant, and thus affordability factor creeps in here.
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Packaging of goods is very integral for effective sales and product reputation capture.
The manner a product is packaged is also part of logistics management. And for the same, the packaging should be robust without any spillage during the time of several transits.
Additionally, the package of the products should also be with damage proofing to not accommodate any unwarranted tampering or pilferage possibility.
Sometimes various businesses also ensure to stamp the ISO ratings in the package to exhibit to the customers its premium quality aspect and full acceptance amongst the masses worldwide.
Another most important element of the logistics function is transportation. Transporting of the finished goods to the final consumers and transporting the raw materials to the next place of manufacture.
In this realm, various factors like:
Mode of transport: calculation as to which model would be cost-effective as well as render speed in delivery.
The cost incurred: Costing proposition of transporting should be affirmative.
The actual time of delivery: how much time is required to deliver the final goods before the reach of the competitor’s products.
You should calculate all these factors beforehand.
The calculation of transportation cost and other logistics should also depend on various dealer outlets, factories, warehouses, and other essential consumer points of delivery.
Consumers these days not only purchase goods from the market and shops but also require home deliveries, and for the same, the transportation cost should be calculated.
Additionally, for home deliveries, agents will also have to be posted in transit to sell the same on time safely.
Taking care of the logistics function in a business in a systematic and streamlined manner is integral for the overall growth of the business.