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In general, logistics simply means coordinating the movement of people and items so that everything flows smoothly, though by definition it can refer to a wide variety of things in a business context. However, the most common use of the word logistics in the business world today has to do with the movement of merchandise from one place to another. A business that sells products, for instance, will usually contract with a third-party logistics services provider that ensures that those products get from the manufacturer to the retailer, where customers can purchase them.
TL;DR (Too Long; Didn't Read)
Logistics services refer to the coordination of items as they’re distributed from warehouses to consumers, usually by truck or air.
What Is Logistics Services?
A business that sells products has to find a way to get those items to customers. Even if the items are sold online, they’ll still move from Point A to Point B, usually through a shipping service. If you’re a one-person operation, you may take each item to the post office, but over time you’ll want to upgrade to a shipping provider. Grow even further, and things will get a little complicated since you’ll deal with shipments using multiple carriers on a regular basis. That’s where logistics services providers come in. They specialize in managing the shipment process for business, coordinating things so that products end up where they need to be in as efficiently a manner possible.
What Is the Role of Logistics?
There are several factors in the process of getting a product from the manufacturer to the customer. First, it may go to a warehouse, where it waits for an order to send it. Whether it spends time in the warehouse or not, though, the next step is a truck or plane, which takes it to a retailer or postal carrier so that it can get in the hands of customers. However, transportation can be tricky, especially if the weather disrupts the process. Logistics providers oversee all of this, coordinating transportation services to keep products rolling forward. If a client doesn’t have enough product to fill an entire truck, for instance, a logistics company may arrange to combine that customer’s shipments with another customer’s, strategically routing the truck picking both orders up to avoid delays.
Using Technology in Logistics
In most states logistics companies work both locally and across state lines, with some even handling overseas shipments. Thankfully, providers now have the technology to help manage the process. Logistics software helps professionals in the field determine the best route, even handling the complications that come with combining multiple shipments into one truckload. Today’s solutions even make it easy to track overall productivity, thanks in large part to the sophisticated analytics now built in. As a result, analytics are becoming increasingly important as businesses search for a company that can give them an ongoing overview of their supply chain.
Stephanie Faris is a novelist and business writer whose work has appeared on numerous small business blogs, including Zappos, GoDaddy, 99Designs, and the Intuit Small Business Blog. She worked for the State of Tennessee for 19 years, the latter six of which were spent as a supervisor. She has written about business for entrepreneurs and marketing firms since 2011.