Importance of logistics

Importance of logistics

Logistics is a service in its own right in most medium and large companies. The importance of logistics is crucial.

Managing a company’s physical flows is not an easy task. It is a question of controlling all the inputs and outputs of the various resources in the company. It is therefore advisable for every company to set up a department. Whose responsibility for logistics management would be entirely its own. When good management of supply, transport and other flows within a structure is achieved. It is more likely that the structure will achieve its objectives.

This function, which cuts across other departments, is strategic and has a considerable influence on the company’s activity. Even more so when one recognizes the importance of logistics.

Responding to customer demands and providing superior service as a differentiator are the most important benefits of good logistics management. The provision of fast, accurate and quality services is the responsibility of this sector.

Good management therefore leads to revenue growth. Gives a company’s brand a good reputation, generates more business and reduces costs.

Aim of logistics

The aim of logistics is to ensure, in the shortest possible time. And under the best possible conditions, the circulation of the product. From the company to the customer. To do this, this function must fulfill a certain number of missions: “Inform the production department about the quantities to be manufactured in the medium term. By providing reliable sales forecasts. Inform the production department about the quantity to be manufactured at term. By rapidly communicating data concerning the orders processed. Have the product requested by the customer. Or in other words manage the stocks. Transport the product to the customer, i.e. ensure their transport and delivery. And ensure the proper functioning of the product by setting up a certain number of services”.

The benefits for a company

Logistics is important for all the actors in the company because it influences its activity. It is, in most companies, a transversal function that concerns all departments. And allows them to be linked as efficiently as possible. It is part of the value chain.

Logistics is a real tool for competitiveness, aimed at improving the coordination of company services. And mobilizing them to pursue a common objective: customer satisfaction. In certain sectors of activity, logistics can be a competitive advantage.

The objective of in-company logistics covers both the short term (optimisation of daily physical flows). And the medium to long term (implementation of action plans to optimise production and storage parameters).

The importance of a good supply chain

For any commercial or industrial enterprise, the objective is to produce goods and services. And to make a profit from them. But the commercial function is not enough to optimise profits and ensure customer satisfaction. It is also necessary to master logistics because it is a real tool to be able to stand out from the competition.

To assess the chain’s performance, the company relies on various indicators. For example, for good supply management, the availability of goods and delivery times must be taken into account. Warehousing management requires stock monitoring. Possible losses in value as well as stock coverage. Logistics also involves transport: the filling rate of the means chosen to transport the goods, the average cost generated per product.

The impact of technology on logistics

Over time and with the many innovations: GPS devices, shipment tracking software, etc., the company has developed a number of new products. And even the appearance of drones (Amazon). The productivity and efficiency of the supply chain have increased tenfold. Leading to a marked increase in performance for companies that make good use of it. Add to this improved process control and significantly reduced costs. Goods can now be tracked 24/7 and the exact delivery date can be determined.

Such progress greatly improves the customer experience. And, above all, it saves time and ultimately maximises profits. It is obvious that if a company wants to remain competitive. It must invest in and learn about the latest technologies.

In any case, logistics plays an important role in the economic life of a society since it cannot survive without trade with the outside world. The logistics chain must be fluid for a company to be profitable. It should not be forgotten that the logistics function is complementary with the sales department and with the other functions of the company. The goal is, once again, customer satisfaction for better profitability.

If technologies and innovations are subjects you like. You will find articles on this subject in this category.

Advantages of investing in logistics

The vast majority of companies focus on the development and production of their products and services. To meet the needs of their customers. However, if these products do not reach the customer effectively, the company will fail.

This is the main role of logistics. If products are not produced and shipped on time. Customer satisfaction can decrease. Which affects the company’s profitability and long-term viability.

In addition, the more efficiently raw materials can be purchased, transported and stored until they are used. The more profitable the business will be. In short, the coordination of resources for the delivery and use of materials can be a driving force or bankruptcy for a business.

To conclude

We can therefore see very clearly the importance of logistics. Its role is crucial and must not be neglected under any circumstances. On the one hand because it allows for better competitiveness and on the other hand because it allows for better customer relations and better development of the company.

If, like us, logistics is a subject that interests you. Remember to regularly look at this category, we often publish. We will be happy to discuss this subject with you so contact us or leave a comment.

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