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“Good is the enemy of great. That is why so few things become great.” ~ James C. Collins
One of the most effective ways for businesses that produce goods and services to maximize their budget is through supply chain management. Logistics, which manages physical, informational, and human flows to optimize them and prevent needless resource waste, also plays a significant part in supply chains.
Logistics in the supply chain organize the shipping and storage of products and services. Beginning with raw materials, the technique moves on to manufacturing and/or distribution until coming to an end when a business delivers finished goods to a client or when products are delivered back to their original location. Although they encompass different (but related) operations, supply chain management and logistics are frequently used interchangeably. A supply chain includes the manufacturing and distribution of products and services to all different kinds of clients.
Both supply chain management and logistics, when done correctly, may give businesses a competitive edge and benefit customers. Logistics entails organising and carrying out the storage and transportation of products between various supply chain nodes.
Facilities, personnel, equipment, and other resources are coordinated by logistics to make sure that things move when they should and that there is room for them at the next stop. The procedures that make up logistics include demand forecasting, shipping (including logistics operations), inventory management, material handling, and order fulfillment.
Throughout an item's route to the consumer, logistics oversees the movement and storage of goods and services as well as the paperwork and reports that track those movements. Transportation strategies used to move inventory between locations are included in logistics.
Effective supply chain management requires this component to determine where items can be stored at each stage until they are required at another site
Why Logistics Are So Important to Supply Chains
Because it organises and keeps track of the people and resources required to store and transmit goods and services, logistics is an essential component of supply chains.
Logistics make ensuring that supplies and goods move consistently, on schedule and within budget.
Logistical components that assist supply networks include:
Challenges Logistics Helps to Overcome in Supply Chain Management
Reduction of business expenses. In supply chain management, the primary function of logistics is to raise the overall value of each delivery, which is measured by customer satisfaction.
This means that maintaining a particular level of high-quality customer service must be connected to the efficiency and reduction of personnel resources. Volume reduction of traffic. One of the major expense areas in logistics management is transportation costs.
Reducing the requirement for intermediary services.
The price of setting up supply chains includes intermediary services (such as transportation, storage, marketing, and recycling).
Quick reaction to shifting market demands. Advanced logistics models also assist in fast adapting to shifting market demands in order to maintain leading positions against competitors and continue to be in high demand.
Values Logistics Provides to the Supply Chain Business
With the help of logistics solutions, supply chain management makes it easier to maintain a high level of customer service while lowering the price of obtaining raw materials, storing, delivering, and selling products and services to end users.
Workflow stability is a quick step toward cutting costs and raising general customer happiness.
Usually, this is accomplished with careful planning.
Increasing general client satisfaction is a quick way to boost word-of-mouth marketing for your brand.
The fact that such advertising is one of the most effective strategies and is completely free for you is an added benefit;
You can lower the net cost of a good or service and hence increase its ease of access to the end consumer by cutting out a few supply chain middleman.
“So, the conclusion is that, “Those in the supply chain know the impossible is possible.”
Hence, Supply chain management is an important part of every organization as it improves the effectiveness, efficiency, management of resources, etc. it also establishes good and prominent relations with the stakeholders like suppliers, customers, etc.
By:
Vaibhav Singh
Section-A