Today, most businesses have started selling their products online. Hence, focusing more on customer satisfaction rather than profit has become quite important. Your competitors may sell the same qualitative products to the same set of customers. Well, in such cases, customer satisfaction can make a significant difference. You can achieve it through good logistics management.
Efficient logistics management isn’t just about moving goods—it’s about moving customers toward satisfaction.
What Is Logistics Management?
There are numerous processes in supply chain management. Logistics management is a part of such processes. It controls the flow of goods from its origin to its final destination.
Logistics management involves planning, warehousing service, packaging, and shipping.
For example, you have a business that sells sneakers online. You have to source the materials required to produce sneakers. The factory will manufacture the sneakers.
The finished ones will move to the warehouse. The warehouse team will store the sneaker’s properly. The worker will pack the sneaker when a customer places an order. The shipping company will pick up and deliver the package to the customer.
Importance Of Logistics Management
Good logistics management can work spectacles for an e-commerce business. Below is a list of its importance.
Streamline Operations
Logistics management is the backbone of the supply chain. It streamlines different processes, from procurement to ecommerce fulfillment, by reducing the cost of any business and maximizing the utilization of resources.
Enhance Customer Satisfaction
Today, we live in a digital World. Customers expect much better service than before. If shippers can’t deliver the products on time, it can adversely affect the customer. Good logistics management ensures that all orders are delivered to customers on time. It can be possible by coordinating various activities like warehousing and transportation.
Mitigating Risks
Logistics management is not just about moving goods from one point to another. It’s about navigating all the challenges that may come along the way during the storage and transportation. 3PL Logistics professionals identify threats like natural disasters and adopt proper strategies for safeguarding goods and products.
Drive Business Growth
Good logistics management can help in growing a business effectively. It allows a company to enter a new market or expand its product.
Improves Warehouse Management
The warehouse is the heart of any logistics operation in business. A well-organized warehouse can even track and manage goods properly, dramatically improving customer satisfaction.
Proper Route Planning
Proper logistics management can optimize transportation routes, ensuring orders are delivered to customers at the right time. It involves analyzing various tools and techniques and choosing the most efficient one. WMS (Warehouse Management System), GIS (Geographic Information System), TMS (Transportation Management System), and vehicle routing software are a few tools.
Function Of Logistics Management
Planning
The first step in logistic management is proper planning. You need to estimate resources and customer demand so there will be no shortage of goods.
Procurement
Procurement involves selecting suppliers who can provide raw materials or products at the proper time. You must select suppliers who can meet the Company’s goals, provide high-quality products and services, and maximize cost savings.
Inventory Management
The main aim of this process is to track the inventory in a supply chain. It balances the supply and demand of the product by optimizing inventory levels and reducing stockouts.
Warehouse Management
It involves storing and handling goods in the warehouse. Warehouse logistics management involves picking, storing, packaging, and shipping goods.
Transportation
It involves transporting goods from one location to another, i.e., supplier to manufacturing company or from warehouse to the doorstep of the customer.
Difference Between Logistics And Supply Chain management
- Supply chain management involves various processes, i.e., from raw material procurement to delivery of products to customers. Logistics management is the subset of supply chain management.
- Supply chain management aims to optimize the entire supply chain network, increasing customer satisfaction and reducing warehousing costs. Logistics management ensures that products reach customers at the right time and in proper condition.
Best Strategies For Effective Logistics Management
You can follow the below strategies for effective logistics management.
Warehouse Management Strategies
You can maximize the space inside the warehouse by utilizing the vertical space. You can even divide the warehouse into different zones based on factors like demand for the product or picking requirements. Assign workers to each zone to increase efficiency.
There can be autonomous mobile robots inside the warehouse. They will move the products inside the warehouse space. It eliminates the need for any physical worker, thus reducing the labor costs of a business.
The usage of conveyor belts will bring products directly to operators. It eliminates the requirement of unnecessary movement inside the warehouse. You can implement warehouse management software to track goods right from their arrival inside the warehouse to storage and delivery.
Transportation Management Strategies
Moving goods from the supplier to the end customer is possible by rail, road, or air.
Choosing the effective one can be pretty complex for any business. Adopting transportation management strategies may significantly help reduce costs and increase customer satisfaction. The TMS will help choose the most efficient route by considering traffic, distance, and many more factors.
Inventory Management Strategies
The business can use inventory management software to track goods in the supply chain.
Benefits Of Logistics Management
Cost Reduction
Logistics management will give your business better visibility. It helps to identify the inefficiencies or resource wastage. For instance, you can optimize the transportation route to reduce the fuel costs. You can optimize the warehouse storage to minimize the space required for lease.
Improve Customer Satisfaction
Effective logistics management involves proper inventory and warehouse operation management. It dramatically helps to improve the fast and accurate delivery of goods to customers. There are fewer chances of customers seeing out-of-stock messages on the website.
Remain Ahead Of Competitors
Proper logistics management can help respond quickly to an unexpected event like a sudden rise in demand or delay of any product from the supplier. Proper decisions at that time will not impact your customer satisfaction and will help to keep your business ahead of competitors.
Reduce Stock Out Or Overstocking
Good logistics management will reduce the possibility of either overstocking or understocking. It helps in increasing the brand of your business.
Conclusion
Adopting the latest technology can help a business to grow ahead of its competitors. Proper logistics management can help in the timely delivery of products to customers and thus help build the Company’s brand.
AAJ Supply Chain Management
