The ability to optimize the delivery of goods from manufacturer to consumer is the key to a successful business. Therefore, every entrepreneur (both experienced and novice) needs to understand what it is. Logistics is the science of the process of moving a product or service from the starting point (producer) to the endpoint (consumer). All processes related to the transportation of goods are subject to logistics. Not all entrepreneurs understand that even the product itself is established and works without interruptions only due to the fact that the logistic scheme of interactions is clearly verified and calculated. From the explanation above, a simple layman or a newbie in the business world may not immediately understand the whole essence of logistics.
Logistics companies plan, implement, and control the movement and storage of goods, services, or information within a supply chain and between the points of origin and consumption. Various logistics companies handle some or all of these supply chain functions, depending on a client’s logistical needs. Logistics is a term synonymous with the military. In times of war supplying troops with the proper equipment and supplies was a logistics function. Logistics has evolved since the 1950s with the rise of consumerism and the subsequent growth of more complex supply chains. Coordinating the movement of supplies and materials is now a globalized process. Today, the business sector uses logistics as a term to describe the efficient flow and storage of goods from point of origin to the point of consumption. The supply chain is a vital part of this process. A proper supply chain may include transportation, shipping, receiving, storage, and management of all or one of these functions. Logistics may also apply to information, transportation, inventory, warehousing, material handling, packaging, disposal, and security within the business sector.
An example of the use of logistics at all stages of business
Company “X” has developed a new line of products. The plans of the management are to launch production and organize the process of selling this product. To accurately calculate each stage of the project’s implementation, you need to form a logical chain. Each segment has its own rules of work, often – individual leaders. But what is especially interesting is that every process, one way or another, is affected by logistics, and is completely subordinate to it.
Production planning
This is the starting point for a product manufacturer to set up a manufacturing process. Why is the influence of logistics on the construction of production so important? Planning the supply of raw materials, placing production facilities, transporting raw materials and finished products as they are manufactured – each of the stages is accompanied by the movement of objects along the chain indicated in the diagram above. At this stage, the task of the logistician is to calculate the least costly routes for transportation, as well as organize the work as soon as possible.
Supply planning
After the production of products, Company “X” must take care of the next stage of delivery of the goods to the client’s hands – the sales network. To transport a product, it is necessary to determine the best and, at the same time, the shortest delivery routes. The task of the logistician is to arrange work on the movement of products with jewelry precision. If your logistics department is performing poorly, expect serious losses.
Sales process management
Even when products produced by Company “X” is on the shops, the logistics will still be involved. Just not in a “pure” form, but in combination with marketing. It is interesting, but even the simple movement of the goods through the warehouse of the distributor and the height of the “face” * of the product on the shelf is a derivative of the logistics operations. A small summary can be summed up: the entire process of production and sale of goods depends on logistics. Furthermore, Logistics 4.0 has the objective of creating a transparent ecosystem, in which all the systems involved can expose relevant data. Well-thought-out and implemented logistics operations are the key to obtaining the planned income on time and in full.
The Difference between a 3PL Company and a Freight Brokerage Firm (3PL vs. Freight Broker)
People often use the terms 3PL and freight broker interchangeably, however, this creates confusion regarding the nuances of either service. 3PLs and Freight Brokers are both intermediaries between the shipper and the carrier, yet their roles differ. A broker focuses primarily on executing a singular shipment and works to meet specific cost and service goals. The 3PL provider thinks about the bigger picture and more strategically. They plan earlier in the supply chain and anticipate the needs of a client through every step of the supply chain, transport, and delivery process.
What is a freight broker?
A freight broker will often focus on one single shipment and act as a non-asset bearing intermediary between a shipper with goods to transport and a carrier who actually moves the freight. Essentially, a Freight broker works directly with owner-operators nationwide to coordinate individual shipments. Freight brokers currently handle significant amounts of truck transport in North America. In the grand scheme of things, freight brokers often connect with hundreds or even thousands of small to medium-sized freight carriers to provide a large network of shipment options. This then affords shippers alternatives to larger freight carrier providers. Smaller carrier operations often rely more on brokers for business than larger carrier providers, because these larger carriers often have long standing relationships with 3PL companies.
What is a third-party logistics company?
In another post, we detail what a third party logistics company is, but in its broadest form, 3PL applies to any service contract that involves the storing or shipping of a commodity. A 3rd party logistics company may only offer a single service, like transportation, warehouses in Reno NV, or inventory management. However, it may also offer a system-wide bundling of services and management of a client’s entire supply chain. Many 3rd party logistics companies integrate operations. Warehousing and transportation services are all tailored to a client’s needs. what is a logistics company, what does a logistics company do. A third-party logistics company is typically an asset-bearing firm that establishes relationships with shippers on a broader scale. Third-party logistics companies typically make an investment in physical and human capital including brick-and-mortar locations and wheels on the ground.
Connect with Full Tilt Logistics
Streamlining, consolidating, and outsourcing your logistics processes can result in huge long term financial savings and better overall client service. Connect with Full Tilt Logistics to learn more about what is a logistics company and what does a logistics company do. We’re here to help you achieve your overall shipping needs as they arise across the United States. We are always happy to answer any and all shipping and logistics-related questions. It’s our goal to provide you with the best customer service possible!
6 Benefits of Logistics Management
Given that the movement of goods is what drives cash flow, it stands to reason that managing that movement—logistics management—is a core business concern. Indeed, logistics management impacts a company’s bottom line for better or worse. It’s best not to leave that impact to chance.
The following are six major benefits of effective logistics management.
- Visibility: Logistics management affords greater visibility into the supply chain. This enables businesses to better control costs, tease out efficiencies, spot supply chain problems, conduct demand planning and gain insights into opportunities.
- Reduced overhead: Logistics management enables companies to reduce overhead in areas from cutting shipping costs to shrinking how much warehouse space they need by proactively controlling inventory levels.
- Improved customer experience: An excellent customer experience (CX) is the driving factor behind repeat sales. By delivering orders accurately and quickly, you improve the customer experience which in turn increase brand loyalty and future sales.
- Preventing loss: Logistics management helps prevent loss in several ways. One is by a true inventory accounting, so your company knows exactly how much stock it has on hand at any given time. Companies can also track movement and current location so stock won’t be misplaced or diverted without notice. In addition, by ensuring optimal storage and transport conditions, such as temperature and moisture management, solid logistics prevents spoilage and damage.
- Support expansion: Demand forecasting supports expansion by realistically calculating inventory needs and ordering, transporting and stocking accordingly. Further, logistics management best practices help companies scale to fulfill more customer orders on time.
- Competitive edge: Delivering orders correctly and on time is a foundational element in the customer experience—and good CX is key to repeat orders as well as solid brand reputation and net promotor scores, which in turn help a company acquire new buyers. Logistics management helps a company consistently deliver, or over deliver, on promises and sharpen its competitive edge.
At the same time, you should know that direct-drive logistics organizes and arranges freight brokerage solutions very effectively and efficiently. The logistics companies use these transportation solutions for a lot of businesses. In this way, the logistics teams also find freight carriers at affordable prices.
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