The logistics are as simple as they are complex.
Getting a product or service from A to B is never that easy.
Logistics management is intertwined with supply chain management and together they form complex networks of logistical processes serving customers.
Because logistics goes far beyond physical distribution, there are multiple roles and functions of logistics. There is some controversy about how many functions of logistics there are, depending on whether or not you group similar logistics functions together.
For the purposes of this guide, we're going to talk about6 functions of logistics that reflect their role in the supply chain.
Let's dive in.
6 functions of logistics
All logistics operations, regardless of the size of the organization they serve, fulfill specific roles that support the movement of goods or services. Let's look at what these roles are and how they all come together in a transportation management process.
The following logistics functions are listed in chronological order rather than in order of importance to logistics management. Therefore, transport and the actual movement of goods are at the bottom of the list.
1. Order Processing
Every delivery process can only work if there is a system for order processing. Order processing systems vary from company to company - from a Shopify store to an ERP. In any case, it should support fast and effective information processing that gets transport activities going.
Integration is the core of order processing in logistics management.
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Customer-centric solutions, whatever they are, must be perfectly synchronized with the Transport Management System (TMS) to ensure that goods are delivered at the right time andconforms to customer standards.
Setups for processing orders
Order processing can look like this, depending on the complexity of the logistics process.
- One-click integration for eCommerce (e.g. a WooCommerce store integrated with a TMS for instant import of orders).
- Integration of CRM and delivery management systems viaAppyPie Connector Zapier.
- ERP and TMS integration via API - requires more time and technical effort.
Regardless of the facility, the processing of orders sets the tone for all transportation management: warehousing, distribution, customer service, shipment analysis and the movement itself.
Pro Tip:set up aZapier-Integrationto connect any order entry system (even Google Sheets) to delivery software.
2. Inventory Management
Inventory control is one of the logistics functions that are often summarized under the generic term inventory/warehousing. For the purposes of this guide, we separate inventory and warehouse management processes.
Inventory refers to the storage of finished goods in a warehouse. In order to support the transport and delivery processes, inventory control requires maintenance informationStock keeping, ensuring safety, forecasting demand for goods and of course replenishing stock.
File logistics
Inventory logistics remain on the borderline between inbound and outbound logistics as it encompasses both supplier relationship management (inbound logistics) and order processing (outbound logistics).
Therefore, inventory management is an important part of supply chain management and must be used efficiently. That means meticulous, data-drivenassortment planningand timely replenishment.
3. Warehousing
warehouse managementis a natural extension of inventory activities. While inventory covers all locations and therefore all inventory for order fulfillment, warehousing is limited to tracking inventory movements within a warehouse.
Processing, packaging and shipping processes are defined at the warehouse level.
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Both inventory and warehousing require sophisticated tools that support core functions and help reduce costs through automation. Especially if your company delivers from several warehouses and requires complex logistics solutions.
warehouse transport
One of the biggest trends in order fulfillment in 2023 will be micro warehousingmicro fulfillment. By strategically placing inventory in small warehouses in densely populated areas, retailers plan to reduce transportation costs and encourage more pickups.
Because automated routing and route optimization can be performed with unlimited departure locations, micro-fulfillment can be very cost-effective. You can get to the heart of warehouse transport activities and inspire your customers with ittimely deliveries.
4. Packing
Packing includes all activities and operations performed to prepare goods for handling and transportation to and from customers - in the case ofreverse logicand specially returns. Packaging is an essential logistical function as it determines the delivery success.
First and foremost, the packaging must comply with security and customs regulations that may affect your delivery service.
In addition, it is important that the packaging meets your storage and vehicle needs, and meets the demand for sustainable materials and moreGreen logisticsAspects.
5. Cargo handling
Cargo handling is one of the most important logistics activities that cannot be ignored when discussing logistics functions. It is closely linked to the packaging and very specifically determines the logistics costs.
The right package and handling procedures are the foundation of physical distribution. Equally important is safe storage and transport.
No consumer is happy about damaged products or the wrong product being delivered to their doorstep.
No business wants ever-increasing shipping costs because couriers have to make many trips to a customer to get the order right.
Tips to reduce handling costs
There are many things you can do to improve the logistics cargo handling function and greatly reduce your shipping cost.
QR/Barcode Scanning
QR or barcode scanning is a cost-effective way to improve your delivery success. By implementing track PODsFree barcode scanner appgive your couriers the ability to scan all goods within a load to ensure they are going to the right address.
Fleet Optimization
Route optimization and fleet optimization both serve the purpose of lowering your cost per delivery by maximizing your logistical resources.
For example by collecting all information about your fleet capacity and drivers' working hours, Track-POD'sRoute Optimization Algorithmcreates the quickest and cheapest routes without wasting vehicle memory.
Contactless delivery
Contactless delivery is a way to minimize the cost per delivery while improving customer service.
By upgrading to a contactless and paperless system, you are meeting the demand for contactless delivery while solving a major logistical challenge of picking up your customers at their homes at the scheduled time.
6. Transport
Last but not least, the transport itself. Of course, transport is one of the main tasks of logistics, if notthemainly.
It is required at every step of every supply chain, and how companies set up their transportation management system and functions determines the success of supply chain management.
We have already talked about many important aspects of logistics activities. From warehousing and warehousing to material handling and fleet optimization. Let's look at other logistics activities that help companies improve their customer service and increase the rate of successful deliveries.
Route optimization with ETA
Route optimization is an automated and powerful route planning that makes the most of your fleet and driver resources.
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Estimated Time Of Arrival(ETA) is available as a dynamic time for the dispatcher in the back office and a fixed time for the customer, which means they are more likely to be home on time.
Customer notifications and live tracking
Live vehicle tracking and delivery notifications are important in keeping the consumer at the center of the transportation process, which vastly improves customer service - not to mention your dispatchers can always see the real-time locations of all drivers en route.
proof of delivery
Proof of Delivery (POD) is a document created by your delivery management system once the product or products have been shipped from the warehouse to the customer's home.
With a system like Track-POD, you can send your customers a customized POD right after the products are dropped off at their door. Your drivers can also collect electronic signatures and take photos, which also become part of POD.
Shipper Portal
Sender portal, d. H. a place for your regular customers to sign upadd, track and manage their orders independently, is an invaluable part of any supply chain management process.
Track POD has onecustomer portalfor carriers to sign up and help you fulfill your logistics functions.
Before you go
There are many logistics activities because there are different logistics functions. They all support information processing, storage in various warehouses, product and material handling, customer service, and many other things related to physical distribution.
I hope this blog post gives you an overview of the role that logistics plays in supply chain management and the respective functions that it fulfills.
If you are interested in any of the logistics and business solutions listed above,Try Track-POD for freeor book a demo to see our cost-effective transportation management system in action.