Logistics

https://www.shopify.com/encyclopedia/logistics

What is Logistics?

Logistics is used more broadly to refer to the process of coordinating and moving resources – people, materials, inventory, and equipment – from one location to storage at the desired destination. The term logistics originated in the military, referring to the movement of equipment and supplies to troops in the field.

Logistics Components

The management of logistics can involve some or all of the following business functions, including:

• Inbound transportation 
• Outbound transportation
• Fleet management
• Warehousing
• Materials handling
• Order fulfillment
• Inventory management
• Demand planning

Why Logistics is Important

Although many small businesses focus on the design and production of their products and services to best meet customer needs, if those products cannot reach customers, the business will fail. That’s the major role that logistics plays.

But logistics also impacts other aspects of the business, too.

The more efficiently raw materials can be purchased, transported, and stored until used, the more profitable the business can be. Coordinating resources to allow for timely delivery and use of materials can make or break a company.

And on the customer side, if products cannot be produced and shipped in a timely manner, customer satisfaction can decline, also negatively impacting a company’s profitability and long-term viability.