Why All Businesses, Big or Small, Rely So Much on Logistics


The Definition of Logistics

The word logistics originated with the military, used to describe the process of moving supplies and ammunition to the front line. After WWII, the term has moved over to the business world, but it holds a similar meaning.

The Merriam-Webster Dictionary defines logistics as “the things that must be done to plan and organize a complicated activity or event that involves many people.” That’s pretty good, but why don’t we get a little more specific.

According to the Council of Supply Chain Management Professionals (CSCMP), a worldwide organization of logistics professionals, logistics is “the process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods including services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.”

OK, that’s pretty long-winded. Here’s a shorter definition from CSCMP that sums it up pretty well: “The management of inventory, at rest or in motion.”

Now we’re working with something. Are you starting to see why logistics is so crucial to the success of your business?

4 Main Areas of Logistics

Logistics doesn’t begin and end with one process or organization.  In other words, it doesn’t take place all under one roof. There are 4 main areas of logistics:

1.       Procurement: This is the first step in the supply chain, and it isn’t production. First, you need to conduct market research, make purchasing decisions, select suppliers, and negotiate contracts. What makes procurement run smoothly? Logistics.

2.       Production: Now you’ve got to design and produce the goods. This means organizing and planning (logistics) the layout and production of your product so that the whole process is streamlined and efficient.

3.       Distribution: Now your goods and services are ready to be distributed to your customers. You’re dealing with processing, storing, and transporting; while documenting every step of the way.

4.       Disposal Logistics: It doesn’t end with the consumer. Logistics is obsessed with reducing cost and eliminating waste. With disposal logistics, also called reverse logistics, you look for ways to reuse and recycle scraps and byproducts of the supply chain.

All Businesses Needs Logistics

Whether you’re dealing with apparel or software, you need logistics. A large corporation might deal with all four areas of logistics, but even a small company usually works with suppliers and distribution.

For more information, and for ways you can improve your company’s logistics, visit

Posted: 5/27/2014 9:53:47 AM by Global Administrator | with 0 comments
Filed under: distribution, procurement, production, Disposal

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