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Meaning of logistic management

Logistics management is a process which integrates the flow of supplies into, through in and through out of an organization. Logistic strategy is implemented to achieve the highest level of service which ensures that the quality of raw materials are available at the right place, at the right time at the right cost.

Logistic management is process of procuring right material in right quantity, Carrying through right transportation, storing rightly in store, issuing to plant in right quantity, converting into finished goods with right kind of machinery, storing into finished goods department and transporting finished goods to distributors at right time in right quantity.

Supply chain management helps in logistics management and enables a company to have a constant contact with its distribution team, which could consist of trucks, trains, or any other mode of transportation. Given the changes that affect logistics operations such as emerging technologies and industry initiatives, developing and using a formal logistics strategy is very important.


 Supply Chain vs. Logistic Management

Supply chain management is an extension of logistic management. However, there is a difference between the two. Logistical activities typically include management of inbound goods and outbound goods, includes transportation, warehousing, and handling of material, fulfillment of orders, inventory management, and supply/demand planning. Although these activities also form part of supply chain management, the latter has different components. Logistic management can be termed as one of its part that is related to planning, implementing, and controlling the movement and storage of goods, services and related information between the point of origin and the point of consumption.

Supply chain management includes more aspects apart from the logistic function. It is a tool of business transformation and involves delivering the right product at the right time to the right place and at the right price. It reduces costs of organizations and enhances customer service.


Benefits of effective logistic system

Improvement in logistics can results in savings in cost of doing business. These savings can also reveal in the profits of the company. Some examples of how logistics can help a business are as follows:

  1. Cost savings
  2. Customer satisfaction
  3. Outperform competitor or competitive advantage
  4. Stable inventory or reduced inventory
  5. Improved delivery time

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