If you want to know what is logistics, you must first be sure that it is not the same as chain management. Then you are about to know what their differences are so that you know how to apply each concept to a company.
What is logistics: concept and definition
- You resolve what is logistics understanding that it is the system by which a product is delivered and including costs and quality as agreed with the buyer of the same.
- As it is a system that involves the supply chain, it includes the inbound and outbound transportation of the product to the customer’s home, its management, storage, preparation of the customer’s order, inventory, supply and demand for the product, and management of who operates the logistics.
- Therefore logistics, having to do with the supply chain, deals with functions that are specific to its segment, has a logistics manager who will take care of the planning, development and control of the flow of products and It will be in charge of delivering the product with the declaration of receipt of the same and even organizes the company’s warehouse and the control of the units.
What is logistics and difference from chain management
- You already know what logistics is and what the person in charge deals with, then you will be able to understand its difference with the chain management, because although in the supply chain its objective is to control the entire cycle with an optimization of the planning, with the optimization supply of the product, schedule the manufacture, storage of products and their distribution.
- The supply chain has a manager who is in charge of coordinating the entire flow of products with the guarantee of the delivery and quality of all supplies.
- In this way, a new relationship is established between customers and suppliers, for which it is necessary for the company to invest in the correct software so that the supply chain can be correctly synchronized, because it will contain a single information on the chain and can be accessed in real time to inventory that will also be unified.
- Therefore, logistics becomes part of the supply chain within an economic cycle that controls the flow of products and everything that is linked to them.
What is business logistics?
What is logistics? Business logistics is a strategy of the production system that gives the advantage of better competitiveness, because it allows planning, implementation and control of the flow of raw materials, from the flow of products that are in the process of production, from finished products with all the information related to production from its origin to consumption.
The sector of the company dedicated to business logistics is in charge of managing, outsourcing and subcontracting, including the management and organization of the activities involved in obtaining, transferring and storing raw materials and products from the moment they are acquired from suppliers. until they begin to be distributed to customers and consumers.
The company achieves a good logistics strategy when it designs a logistics plan involving raw materials, suppliers, production centers, warehousing, information channels, distribution and sales networks.
On the other hand, the chain management is in charge of controlling the life cycle of the product from its creation to its consumption, but it is closely related to business logistics.
It includes the procurement process with the management of the materials, interrelating with the suppliers and the company, the production process with the management of production operations, of the manufacturing centers, the distribution process with the management of the products until reaching the customers. and consumers.
What is logistics: services involved
- Selective logistics that, depending on the particular characteristics of the product, the competition and the target audience, distinguish who will be the distribution intermediaries and how many they will be.
- The exclusive logistics strategy that distinguishes the number of points of sale of a particular product and leaves out others.
- The intensive logistics that is opposed to the previous one because it distinguishes several distribution channels so that the product can bequeath to its target audience.
What is international logistics
- International logistics is carried out from the commercial alliance that a company from a particular country applies with another country for the import and export of products.
- For example, Mexico has a high development potential through a commercial alliance with Chile due to trade and customs agreements between both countries, for which it applies a high quality logistics and distribution load.
- Mexico relies on bilateral agreements with Chile such as the subscription to the free trade agreement that allows to expand and diversify trade without barriers and therefore the circulation of goods is much easier.
- In short, it belongs to the international trade sector that deals with the export process adjusting to international trade clauses.
- However, most of the production companies do not have specialization in the issues related to international logistics, for which they hire others that are those that function as logistics operators, since they are the ones that focus on managing the transport and the customs activities.
- In this sense, it is essential that the appropriate management of delivery time is applied in international logistics to respect the commitment that an agreed delivery period means with the customer, which also avoids a penalty.
- International logistics is responsible for carrying out various services from the labeling of the products with all their care, the packaging and packaging that offers security in the arrival of the product in good condition without increasing the cost, the decision of long-term transport distance to the preparation of the product for customs review with its proper documentation to avoid any delay in customs.