What is logistics is

What Is Logistics? Definition + Examples In Tech

19 Logistics Companies Getting Packages to Our Doorsteps

What Is 3PL? A Guide to Third-Party Logistics.

Logistics refers to the process of managing how resources are acquired, stored and transported. The term was initially used to describe the military movement of supplies and equipment to troops, but today, logistics has become closely associated with the global supply chain.

What is Logistics?

Manufacturers rely on logistics while overseeing complex operations in order to maintain efficiency, reduce costs and ensure that consumers’ needs are met. Due to the prominence of e-commerce companies such as Amazon, logistics embodies more than the actual movement of products from one place to another. Rather, logistics could be referred to as the steps that are taken in order to maximize customer satisfaction. As technology continues to transform our world, its influence on the logistics industry will only become greater, prompting a shift in how companies quickly and efficiently deliver their products to consumers.

Best Logistics Companies Hiring for Open Roles View Top Logistics Companies Hiring Now

The logistics industry has changed tremendously over the past century. During the 1960s, the supply chain was indelibly changed when IBM developed the world’s first computerized inventory management and forecasting system, which made it simpler to track orders, inventory and distribution. Since then, the industry has been propelled even further into the future, bringing with it an entirely new perspective on how we exchange goods across the globe. Today, the logistics realm is heavily influenced by AI and machine learning, which many organizations use to offer more accurate forecasting and enhanced order management. With these technological advances and more, the supply chain has been given the chance to prosper worldwide.

Given the rise of e-commerce and the rapid growth of the online ordering space, logistics has become one of the world’s fastest-growing industries. Many organizations have emerged in response to logistics’ continuous transformation, dedicated to optimizing the supply chain in unimaginable ways. Perhaps the most well-known logistics leader to have emerged over the past few decades is e-commerce giant Amazon. While Amazon was initially founded as an online marketplace for books, the company has become a household name across the globe, altering the way in which products are transported and delivered to consumers.

Amazon has become famous for its logistics strategy, which is made possible by the company’s global network of distribution, sortation and fulfillment centers. Amazon’s same-day and next-day delivery model rests on a complex logistics framework. Products are delivered to the company’s fulfillment centers before being moved to sortation centers. Once goods have made it through Amazon’s sortation centers, they are loaded onto a wide range of transportation modes, which can include the company’s own fleet of delivery trucks and airplanes.

Amazon has entirely redefined the logistics landscape, yet it’s not the only major third party logistics (3PL) provider making waves within the industry. Companies like UPS and FedEx have played a significant role in the transformation of logistics. These companies are capable of transporting goods from their point of origin, warehousing products and packaging them. Working with 3PL providers offers numerous advantages for both small and large businesses including the ability to obtain better rates, easily expand into new markets and improve customer service.

While 3PL providers are capable of handling the entirety of a company’s supply chain operations, the different components of the logistics process can be carried out by individual players. For example, freight companies solely handle the physical transportation of goods, while freight forwarders are dedicated to optimizing transport solutions and handling necessary documentation. In this sense, logistics could be seen as a complex web of moving parts, which operate in tandem with one another in order to boost efficiency and reduce costs within the supply chain.

Notable Logistics Tech Companies

Given the logistics industry’s seemingly endless transformation, logistics management is naturally made up of many different elements. These components include the planning, procurement and coordination of manufacturing materials, strategizing the development of a product and reclaiming materials and supplies involved in the manufacturing of a product. For logistics managers, keeping track of the many different aspects of a supply chain can be nearly impossible. Luckily, tech has successfully reshaped the logistics industry, turning it into a robust sector fueled by the rise of innovative new technologies.

As the demand for online delivery grows and consumers’ expectations become larger, the need to optimize logistics has never been greater. As a result, software developers have set to work creating platforms designed to make the supply chain more manageable. Real-time visibility software providers such as FourKites, project44 and FreightVerify empower supply chain operators to simply identify issues and quickly resolve them, saving organizations huge amounts of time during which they can focus on other aspects of the logistics process. Likewise, fleet management company KeepTruckin has made it easier to track cargo and drivers while improving efficiency and safety along the supply chain.

Considering all of the work that goes into Amazon’s e-commerce services, it may come as no surprise that the company relies heavily on the latest technology in order to accomplish its consumer delivery goals. Amazon has been using AI to power its product recommendations for years, and more recently, the company adopted machine learning to build the handheld virtual assistant, Amazon Echo. But Amazon doesn’t solely use technology to maximize the customer experience. In fact, the company’s technological expertise extends to its packaging and delivery services. The e-commerce company made headlines in 2012 when it introduced automation into its supply chain upon acquiring Kiva Systems. Today, Amazon’s warehouses are filled with thousands of robots built to optimize the picking and packing process.

Nevertheless, Amazon isn’t the only logistics leader that has unlocked the potential of robotics. In fact, the warehouse automation space has grown tremendously over the past several years and is expected to become increasingly more valuable over time. The growth of this sector is attributed largely to the steady rise of e-commerce, which has ignited the need to send products out quickly while lowering operating costs. The popularity of online grocery shopping in particular has bolstered the growth of warehouse automation, as online grocery retailers have been forced to meet consumers’ ever-increasing demands while competing with brick-and-mortar stores.

As warehouse automation continues to infiltrate the logistics industry, autonomous vehicles are becoming a supply chain essential. For companies like Amazon, self-driving vehicles are not only profitable within the warehouse, as they harbor the potential to make on-road delivery faster and more efficient. Many San Francisco-based companies like Starship Technologies and Turo are developing revolutionary new ways to autonomously transport goods, thus unleashing new possibilities within the logistics realm.

Alongside the emergence of autonomous vehicles, the commercial use of drones has opened up new avenues for supply chain management. Within a warehouse setting, drones can be used for aerial inspection and can even carry out maintenance requests, all of which can save manufacturers vast amounts of time.

Given drones’ ability to quickly transport small items, many tech companies are trying their hand at developing aerial transportation modes. For instance, logistics startup Volans-i is creating unmanned aerial systems designed to quickly deliver materials and reduce unnecessary warehouse inventory. In doing so, the company aims to help managers have more control over their supply chain while saving substantial amounts of money.

While there are many options when it comes to packaging and delivering goods quickly, supply chain experts are still searching for ways to manufacture products at a speed that exceeds consumers’ expectations. For this reason, 3D printing has entered the logistics space as a possible solution. The process of gathering supplies and producing a product often requires the most time and effort within the supply chain setting. If 3D printing were applied to the production process, consumers would have greater control over the supply chain. Potentially, a consumer could place an order for a product and then a local 3D printer shop would quickly create the product before sending it out for delivery. 3D printing could ultimately disrupt the logistics industry, as it offers manufacturers the opportunity to produce complex and customized goods faster than ever before.

Technology has the potential to reinvent every aspect of the logistics process. And because the supply chain boasts seemingly endless possibilities, there are countless companies dedicated to logistical optimization. For example, Flexport has developed an operating model designed to simplify global freight forwarding, while Transfix has created a marketplace that connects shippers with a national network of carriers. It’s clear that technology is radically revolutionizing the logistics realm. As the world’s tech community continues to optimize every link of the supply chain, the global transportation of products will only continue to become faster and more efficient.

What does Logistics Mean? Logistics Definition

What are Logistics? What do logistics mean?

If you subscribe to a service from a link on this page, Reeves and Sons Limited may earn a commission. See our ethics statement.

The term “logistics” appears pretty frequently in the business world, but not everyone understands what it really means.

Broadly, Logistics is:

The management of resources or products when in storage and transit. In ecommerce ventures, logistics are the processes of shipping order to customers or transporting an inventory to a merchant. The logistics process keeps a track of goods in transit and up unto the point of delivery. Logistics management is the practice of locating and identifying potential distribution and shipping companies, and evaluating their effectiveness. For most businesses it is more cost effective to outsource the logistics to a third-party company that specializes in transport and storage, and this is especially true for ecommerce ventures.

The introduction of logistics in the shipping of goods has meant a sharp decrease in goods that go missing in transit, or drivers of vehicles who decide to take a detour on their way to the destination.

The packages can be located at any point during the journey thanks to equipment in the truck or other means of transport being used. It has also improved delivery times, ensuring that customers have goods and products when they need them. The ultimate goal of logistics is to move goods from one point in the supply chain to the next in the fastest, most efficient and most cost effective manner possible.

Business logistics has transformed dramatically since the 1970s. Supply companies and supply chains have become increasingly complex due to the rise of global supply chains. This spawned the need for specialists in logistics, known as logisticians. The complexity of supply chain management only increased with the boom in technology as software was developed that aids in the movement and tracking of goods in the supply chain. While the software helps map out and track shipping routes, it has also allowed for increasing complexity in supply chains.

Logistics vs Supply Chain Management

Because Logistics, transportation, purchasing, material handling, and other business processes have continued to evolve over the years, they have become more interconnected. The procurement, warehousing, and point of origin practices associated with managing your goods are all linked in some way. Because there are so many overlaps, it’s easy for the definitions of certain terms to begin blurring together too.

Supply chain management and Logistics are sometimes used as interchangeable terms. However, while these terms do have some commonalities, they’re not the same thing.

Supply chain management is a broad umbrella concept that refers to the processes that link together to ensure that you get the products you need to your warehousing facilities, then through to the point of consumption with a competitive advantage.

Logistics apply to the movement, management, and flow of goods, services, and information within your overall supply chain.

Defining Logistics and the Supply Chain

Supply chain management refers to the collaboration between firms that connect customers, suppliers, and other partners as a means of improving efficiency and end-customer value. The Michigan State University states that supply chain managements are strategic decisions in a distribution network. Proper supply chain management set up the “operational” environment where the optimization of logistique information begins.

Logistics, on the other hand, is a component of the supply chain process. A logistics company, for instance, would plan, implement, and manage the effective forward and backwards movement of goods and services. Examining the inbound and outbound environment, logistical planning considers the activities between the point of origin for the product, and the point of consumption. The aim is to ensure that you meet your customer’s requirements with the correct logistics (and inventory management).

Logistics as an overarching concept can cover the transportation of goods, warehousing, packaging, and various other activities that position inventory. The concept started life in military science, but quickly became common in the business world as well. Whether you’re outsourcing logistics, or managing your own system, the objective is the same.

Logistics ensures that your customer receives the product they want at the right time, according to the correct demands for price and quality. Outbound and inbound logistics are both part of the consideration. While inbound logistics cover things like obtaining raw materials for a product, outbound logistics go beyond the initial purchase and storage of goods. Outbound logistics consider distribution to the customer, including fulfilling orders, managing stock, packing, and shipping.

Do Logistics and Supply Chain Management Work Together?

Although they’re not the same thing, supply chain management, and logistics processes share related information and aims. The two solutions supplement each other to ensure that products move seamlessly through warehousing, to a distributor and distribution center, to finally arrive at the final destination.

According to definitions on Wikipedia and other websites, logistics cannot exist without supply chain management, and vice versa. Notably, supply chain management is a way of linking processes within a business or network of companies into a model that drives an advantage for the business, and end-user. Logistics refers to the flow of goods, and the services or information that move in and out of an organization, from the hiring and purchase of a forklift, to the use of a United States distributor.

While the main focus of the SCM is gaining a competitive advantage, logistics is all about achieving customer satisfaction. The term “logistics” has been around for a long time, while supply chain is relatively new, but both will always be connected in your business processes.

Components of Logistics

To fully understand how retailers use logistics, and what logistics mean, it’s worth considering some of the components that are often involved in the logistics journey. For instance:

Why is Logistics Important?

So, what makes logistics so valuable?

The simple answer is that it’s a solution for helping companies to plan realistic and sustainable growth. No matter the size of your company, or what industry you work in, you’ll always have an ambition to grow and expand. Logistics helps you to maintain that growth, without having to deal with excessive costs and inefficient processes.

As part of the supply chain, logistics can make running your business a lot easier. Supply chains are often very complex and sensitive, as they depend on changing demands in the customer lifecycle. Because of this, a supply chain will often struggle to deliver high value if it’s not effectively organized. Logistics helps to improve the supply chain by decreasing the waste of materials and time.

With Logistics, companies can:

Satisfied customers are crucial to any business. They’re the thing that keep your company operating at its best and ensure that you can continue to make a profit. Creating satisfied customers isn’t just about finding the right price for your items or delivering great features. You should also be considering how you can effectively deliver the best experiences to your target audience too. That’s where logistics and supply chain management come in.

Now that you know more about how logistics work, you can create the kind of amazing experiences that your audience expects. The result should be better sales, more profits, and a growing business.

What is logistics? Definition and meaning

Logistics is basically ensuring that all the material and personnel are in the right place at the right time to make sure that a project or a business objective is accomplished. In the military, it is the science of planning and carrying troops and equipment, plus the movement and maintenance of forces.

“[It] can be defined as having the right type of product or service at the right place, at the right time, for a right price and in the right condition.”

Business logistics is all to do with getting the right item in the right amount at the right time at the right place for the right price in the right conditions to the right customer.

The word can be used as a singular or plural noun, i.e. we can say either logistics ‘is’ or ‘are’.

Logistics in the world of business

In business, logistics is the management of the flow of things between their point of origin and their final destination in order to meet the needs of companies and customers. It is a subset of supply chain management.

The resources managed in logistics include a wide range of items, including:

The logistics of physical things – things we can touch – generally involves the integration of material handling, information flow, production, packaging, transportation, inventory, warehousing and security.

Logistics management means to plan, implement and control the effective forward-reverse movement of goods – plus sharing the related information between the point of origin and the point of consumption in order to meet customers’ needs.

Origin of logistics

Some economic historians and etymologists (they study the origin of words) say that evidence points to the term coming from the late nineteenth century – from the French word logistique (loger = to lodge), and was first used by Baron de Jomini, (1779-1869), a Swiss officer who served first as a general in the French and later in the Russian service.

Others say it came from the Greek word λόγος (pronounced: l a uvos), which means ‘reason’ or ‘speech’, and λογιστικός (pronounced: leh i sticoz), which means ‘responsible for counting’ or ‘accountant’.

“Art of moving, quartering, and supplying troops,” 1879, from French (l’art) logistique “(art) of quartering troops,” which apparently is from Middle French logis “lodging” (from Old French logeiz “shelter for an army, encampment.”

What does a logistician do?

A specialist in logistics is called a logistician. They analyze and coordinate a business’ or organization’s supply chain – the system that moves products from supplier to consumer.

Logisticians manage the whole life cycle of a product, starting from where it is acquired, then distributed, allocated and finally delivered. They exist in virtually every industry.

Typically, logisticians do the following:

A logistician oversees several activities of a company, including purchasing, shipping and delivery, inventory, and warehousing. He or she uses sophisticated software systems to plan and monitor the movement of goods.

According to sokanu.com, in the United States the federal government is the largest employer of logisticians. Many logisticians who work in the military are, in fact, civilians. Any company that is involved in deliveries, such as couriers and freight shipping businesses, will have a large team of logisticians.

Video – What is logistics?

This video explains in simple terms what logistics is.

Logistics

Investopedia / Zoe Hansen

What Are Logistics?

Logistics refers to the overall process of managing how resources are acquired, stored, and transported to their final destination. Logistics management involves identifying prospective distributors and suppliers and determining their effectiveness and accessibility. Logistics managers are referred to as logisticians.

«Logistics» was initially a military-based term used in reference to how military personnel obtained, stored, and moved equipment and supplies. The term is now used widely in the business sector, particularly by companies in the manufacturing sectors, to refer to how resources are handled and moved along the supply chain.

Key Takeaways

Understanding Logistics in Management and Business

In simple terms, the goal of logistics management is to have the right amount of a resource or input at the right time, getting it to the appropriate location in proper condition, and delivering it to the correct internal or external customer.

For example, in the natural gas industry, logistics involves managing the pipelines, trucks, storage facilities, and distribution centers that handle oil as it is transformed along the supply chain. An efficient supply chain and effective logistical procedures are essential to reduce costs and to maintain and increase efficiency. Poor logistics lead to untimely deliveries, failure to meet the needs of clientele, and ultimately cause the business to suffer.

The concept of business logistics has been transformed since the 1960s. The increasing intricacy of supplying companies with the materials and resources they need, along with the global expansion of supply chains, has led to a need for specialists known as supply chain logisticians.

In the modern era, the technology boom and the complexity of logistics processes have spawned logistics management software and specialized logistics-focused firms that expedite the movement of resources along the supply chain. One reason large online retailers like Amazon have come to dominate the retail landscape is the overall innovation and efficiency of their logistics along every link of the supply chain.

Manufacturing companies may choose to outsource the management of their logistics to specialists or manage logistics internally if it is cost-effective to do so.

Special Considerations

The tasks for which a logistician is responsible vary depending on the business. Primary responsibilities include overseeing and managing inventory by arranging for appropriate transportation and adequate storage for the inventory.

A qualified logistician plans out the logistics process, coordinates the steps as inventory, and resources move along the supply chain.

Specialized training in supply chain management and logistics are often core or elective courses, or even discrete programs of study, in business education. A business degree that emphasizes these skills—or in some cases, a technical degree in systems analysis or database management—is usually necessary to begin an often well-paid career as a logistician.

What Is Logistics, And Why Is It So Important To Business?

Logistics can be classified as an enterprise planning framework for material management, information, service and capital flows. Logistics, when seen in the context of the modern day work environment, may include information that is complex in nature while giving importance to all the communication and control system that are essential in today’s businesses.

To simplify, logistics has been defined as having the right type of product or service at the right place, at the right time, for a right price and in the right condition.

Logistics has evolved as a common and well-known business concept because of the ever increasing complexities of modern day business. The primary goal is to effectively manage the project life cycles and resultant efficiency. This has greatly evolved with a logistics manager’s role in promoting an efficient system of supply chain management.

In business terms, it can be summarized as a competitive strategy adapted by the enterprise to meet and exceed the expectations of its existing and prospective customers. It refers to a complete process of total supply chain management that is established to achieve a state of perfection through efficiency and integration. Logistics does not mean a single work activity but refers to a group of activities performed to attain the goal of a business enterprise that is maximizing their profits. This may involve steps like purchasing, planning, coordination, transportation, warehousing, distribution and customer service. A business can run without profits, but it needs money to fund its services, pay its employees and grow its customer base. Logistics plays an important part in the present business world; it cannot be neglected by an enterprise focused on growth and profitability.

Logistics is a mixture of a number of professional disciplines, such as: planning, controlling, directing, coordination, forecasting, warehousing and transportation, facility location, and inventory management

As per the Council of Supply Chain Management Professionals, logistics has been defined as the part of the process of supply chain that plans, control sand implements an effective and efficient flow for the purpose of storage of goods and services and other related information from the point of commencement to the point of final consumption with an aim to satisfy the requirements of its existing and prospective customers.

All activities that are involved in the movement of goods and services from the point of origin to the point of final consumption are grouped under the term ‘logistics’. The field of managing or supervising all these activities when grouped together as a collective unit, is placed under ‘logistics management’. People who are given the task of managing the logistics department may also be referred to as ‘distribution managers’.