Definition - What does 

Logistics Management mean?

Logistics management is a supply chain management component that is used to meet customer
demands through the planning, control and implementation of the effective movement and
storage of related information, goods and services from origin to destination. Logistics
management helps companies reduce expenses and enhance customer service.

The logistics management process begins with raw material accumulation to the final stage of
delivering goods to the destination.

By adhering to customer needs and industry standards, logistics management facilitates process
strategy, planning and implementation.

Logistics management is the governance of supply chain management functions that helps

organizations plan, manage and implement processes to move and store goods.

Logistics management functions

To varying degrees, logistics management functions include customer service, sourcing and
procurement, production planning and scheduling, packaging, and assembly. Logistics
management is part of all the levels of planning and execution, including strategic, operational
and tactical.
Further, it coordinates all the logistics activities, and it integrates logistics activities with other
functions, including marketing, sales, manufacturing, finance and information technology.

Importance of logistics management

Effective logistics management is important to companies for a number of reasons, both positive
and negative.
Good logistics management ensures that products are shipped in the most economical, safe,
efficient and timely manner. This results in cost savings for the company and more satisfied
customers.
In contrast, poor logistics management can result in damaged or delayed shipments, which can
then lead to dissatisfied customers, returns and scrapped products. The consequences of these
problems include higher costs and customer relation problems. In order to avoid these results,
effective logistics management includes careful planning, proper software system selection,
proper vetting and selection of outsourced vendors, and adequate resources to handle the
processes.

Logistics management process

Logistics management generally consists of processes for inbound and outbound logistics traffic.
Inbound logistics is the process of moving goods from suppliers into a warehouse, then into a
production facility to make products. Inbound logistics can include raw materials, tools,
component parts, office equipment and supplies. Outbound logistics is the process of moving
finished products out of warehouse inventory and shipping them to customers.

Here are some examples: For a computer manufacturer, inbound logistics might involve
electronics parts, computer chips, cables, connectors, molded casings and shipping cartons.
Outbound logistics involves the finished computer and associated peripheral devices.
Meanwhile, for a furniture manufacturer, inbound logistics could involve wood, glue, fabrics,
screws, nails, paint and safety glasses, while outbound logistics would involve the finished
furniture.

Scope of Logistics Management

The logistics industry is an important driver of economic growth and development. All types of
businesses, big and small, need logistics managers to help with inventory and accounts
receivable. There are therefore different types of logistics such as third party logistics, business
logistics, production logistics and professional logistics.

The main functions of a qualified logistician include inventory management, purchasing,

transportation, warehousing, consultation and the organizing and planning of these activities.
Logistic managers coordinate the efforts required to bring in raw materials and supplies and then
ship the finished product made by the company to wholesalers or distributors. 

The role of distribution manager within logistics may involve transportation, stock control,
warehousing, and ensuring structures are in place to monitor the flow of goods and materials. A
logistic manager is also responsible for making sure that the goods are stored in a proper and safe
manner in addition to looking after their timely dispatch to outlets.

A range of business tasks is undertaken to support the smooth and efficient operation of supply
chain processes, and typical work activities usually include monitoring the quality, quantity, cost
and efficiency of the movement and storage of goods, coordinating and controlling the
information systems and analysing data to monitor performance and plan improvements and
demand. With the setting up of large courier companies, and freight and forwarding agents
handling global operations and moving containers across countries and cities, and today’s e-
commerce explosion, logistics management has grown in importance, and those in logistics
management are much sought after.