Business logistics involves planning, organizing, and controlling the movement of supply, inventory, and information within a company. It can save time, resources, and costs. Logistics management is crucial for almost every business process and has its roots in the military. Seven principles form the basis of logistics management, and information logistics is important due to improvements in technology.
Business logistics is the process of planning, organizing, and controlling the movement of supply, inventory, and information within a business. It typically involves the inflow and outflow of goods and information from purchasing raw materials, to transporting goods to different stages of production, to distributing goods to the end user. Through effective business logistics execution, a company can save time, resources and costs.
A significant part of the management process is centered around logistics. Almost every business process, including the production line, warehouses and distribution centers requires constant movement of goods. By effectively implementing business logistics, a company can use fewer resources to provide the same quality of products or services. This usually results in a higher profit margin and gaining an edge over your competitors.
Logistics has its roots in the military. During World War II it became crucial to find ways to move people and material efficiently. In the 1950s, companies began integrating this philosophy into their processes and corporate logistics was born. Since its inception, business logistics has advanced to include a variety of other management concepts.
During the 1950s, logistics officers who had served in World War II transferred and contributed their expertise to the private sector. Their experience in coordinating the war effort has translated into new practices in transporting resources and inventory. Furthermore, the 1958 recession led to cost-cutting measures, which meant logistics managers had to devise new ways to move goods more efficiently and at lower cost.
Seven principles form the basis of corporate logistics management. The first is having the right items, and the second is having the items when they are needed. The third and fourth principles, respectively, provide the right number of items and deliver them at the right time. The fifth is buying the items at the right price; the sixth is maintaining the good condition of the object; and the seventh is delivering the items to the right person.
Information logistics is generally considered an important element of business logistics for several reasons. Improvements in information technology have enabled companies to communicate instantly with suppliers and customers from all over the world. Additionally, supply chain management is made more efficient as materials can be tracked at every stage of the manufacturing process. Finally, material requirements and enterprise resource planning are accelerated with the help of software dedicated to these processes.
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