The word Logistics comes originally from a French term “Loger” – to lodge or quarter. In this context to lodge or Quarter troops, but also extends to the transportation of supplies for troops.
Nowadays Logistics encompasses Business and defence elements. Combined this creates a more complete definition of logistics.
Lets start with a couple of definitions for these different elements of logistics
Firstly we have business logistics; This is a management function that deals with the flow of materials from the raw materials to the delivery of finished products to the users/consumers.
Procurement of the raw materials
The flow of materials into the production process
The physical distribution
Inventory requirements and management
The transportation an traffic management and
This allows for the efficient flow of everything from raw materials to finished products, from suppliers, factories, inventory warehouse and the end customers.
The Supplier of raw materials, they package & ship the raw materials to…
The producers manufacturing plant, who will in turn procure the raw materials and components, manage and control the inventories once the raw materials have been delivered, then manage the material flow through the production line,
then package, & ship the end product to…
A warehouse for storage (here they manage the inventories of what is in the warehouse, order processing, & onward distribution to…
The retail outlets (again the management of Inventories, and sales) or directly to…
The end customer!
An integrated approach to logistics management ties together the internal flow and out bound flow.
On the inward side there is the materials management including;
Purchasing the raw materials
In bound transportation, together with the inspection and acceptance of the delivered materials
Raw material storage
and inventory management,
The next element is physical distribution, of the finished goods to warehouses for storage and the inventory management of the contents of the warehouse.
Outbound transportation distributing the finished goods to retailers or directly to customers.