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Types Of Logistics Management

Although logistics is repeatedly referred to as a whole, we can differentiate between various types of logistics a Managementccording to the stage IoT the products are in at a given time. Logistics can be comprehended as the specific set of phases involved from a product’s manufacture to its consumption by the end customer.

For starters, we need to distinguish between operations performed in the storage, procurement, etc., known as intralogistics, and tasks fulfilled outside the transportation, order delivery, etc., or external logistics.

It’s also necessary to recognize four basic types of logistics that take place in the supply chain known as procurement, production, distribution, and everything relating to after-sales service. 

 

1- Procurement Logistics 

 

Procurement logistics is liable for managing supplies required for the manufacture and sale of concluded products, semi-finished goods, and raw materials.

Companies have three approaches for managing procurement logistics:  

 

  • Just-in-time: the required materials are obtained when instructed to complete the manufacturing process.

  • Being in Sync with production: supply planning is done by keeping a keen eye to anticipate manufacturing needs. This way, you know in advance when and how many products will be received.

  • Safety stock: this consists of storing more goods than those you need for production to compensate for any unforeseen circumstances (changes in demand, supplier delays, etc.). 

 

To ensure efficient procurement logistics, it’s crucial to consider a series of variables, namely: the selection of suppliers, the exact amount of stock ordered and frequency of procurement, the inventory management model applied, and the load unit(s) used to store, handle, and transport the products.

 

2- Manufacturing logistics 

 

Industrial or manufacturing logistics includes and optimizes all processes taking place from the purchase of raw materials to the creation of the final product.

These are the two most common production strategies: 

 

  • Make to stock or the push system: goods are manufactured ahead of time and subsequently stored in the warehouse. The sales department only sells the available merchandise.

  • Make to order, or the pull system: The product is manufactured once the order is received from the customer.  

 

The main objective of industrial logistics is to reduce manufacturing lead time, that is, the amount of time it takes from the moment a production order is generated until the product is finished.

Manufacturing logistics aims to cut production lead times

 

3-Distribution logistics

 

Also known as transport logistics, distribution logistics is charged with ensuring that products or goods reach customers quickly and efficiently. There’s no point in offering an attractive, functional, and affordable product if you can’t guarantee that the customer will receive it in the agreed-upon time, condition, and quantity. 

Distribution logistics can be:

 

  • Direct: the manufacturer is charged with distributing the product directly to end consumers.

  • Indirect: as opposed to ending customers, the merchandise is sent to other wholesalers or to retailers (who sell to end consumers).

 

Distribution logistics intervene right after the product has been manufactured, encompassing transportation, storage, order preparation, and delivery to the customer.

Distribution logistics is responsible for delivering products to customers

 

4- Reverse logistics

 

The set of practices and processes connected with managing product returns and refunds is known as reverse logistics. Reverse logistics can be classified as:

 

  • Returns logistics: the most common type, this has grown the most because of e-commerce. It deals with returned orders sent back to distribution centers. 

  • Waste logistics: this has to do with the recycling, treatment, and recovery of waste to take advantage of it or eliminate it to prevent environmental damage. 

 

The activities necessary for implementing efficient reverse logistics are essentially the same as those involved in all types of logistics operations. Nevertheless, the main difference is that they need to be properly planned to keep reverse logistics from interfering in other warehouse operations. 

 

Different Types Of Logistics Strategies

 

The four types of logistics phases are often confused with the various practices each company can adopt to employ a comprehensive business approach. In this sense, we can highlight the following logistics strategies:

 

  • Green logistics. Also referred to as environmental or sustainable logistics. Green logistics ensures that sustainable activities are carried out and that the environmental footprint is reduced

  • Integrated logistics. In integrated logistics, all the business’s activities and departments coordinate to deliver orders with the utmost effectiveness.

  • Omnichannel logistics. It confines the practices adopted by a company to tailor its installation to meet new digital consumer needs (the fact that a product can be purchased online and returned in-store, for example). In omnichannel logistics, warehouses manage large volumes of daily orders containing few units and work with very tight time frames. 

  • Logistics 4.0. It involves the commitment to automate and digitize all logistics operations. This concept includes automated systems and fosters the automated management of warehouses, through interconnectivity, information digitization, and the use of cloud-based IT apps.

  • Defining the logistics strategy/strategies to adopt to achieve specific targets calls for well-structured logistics planning that’s agreed upon by all stakeholders. 

  • Green logistics promotes an environmentally-friendly supply-chain process

 

Objective: Efficient Logistics

 

Firsthand knowledge of the various logistics varieties and strategies will help you to adapt to new trends brought about by social changes and technological advances. Omnichannel retail, same-day deliveries, and the e-commerce boom are just some of the challenges in the different types of logistics fields that have to tackle to meet each company’s goals.

Contact Six Industries Inc today to get started.

 

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