Logistics analysis involves planning and managing the flow of goods or information through various business channels to maximize opportunities for economic wealth creation. Companies may employ individuals or departments with the necessary skills to review each stage of the supply chain process and find areas of inefficiency or higher operating costs. This analysis can also help businesses decide whether to outsource logistics tasks or implement technology overhauls to reduce costs. Additionally, logistics analysis can help determine the best geographic locations for transportation, resource harvesting, and skilled workforce employment.
Logistics analysis is the technical planning that a company will have to follow to manage the flow of goods or information through various business channels. Large companies may have their own set of sub-units that provide supply chain services such as packaging, shipping, warehousing and distribution. Other times, companies may outsource these services to other businesses. Logistics analysis reviews each step of this process to maximize opportunities for return on value and economic wealth creation.
Most large companies will either employ one individual or set up a small department that handles logistics analysis. Because this business requires a certain set of business skills, companies will only hire individuals with the necessary set of skills for this position. A degree in shipping or supply chain management is often required, along with a background in warehousing, fulfillment or other backroom business.
To conduct reviews in the logistics analysis process, a company’s management team will often look at each stage of the supply chain process and find areas of inefficiency or higher than normal operating costs. Since many of the logistics or supply chain functions may be secondary to a business’ primary operating environment, costs can quickly escalate as the business may not have the proper facilities in place to complete logistics tasks at the lowest possible cost. Therefore, a business must decide whether it can outsource these tasks at a cheaper overall cost, rather than continuing to complete them in-house.
Another purpose of logistics analysis is to find areas where a company currently does manual work, but should install a technology overhaul. In most cases, the costs of implementing the technology are offset by lower operating costs in terms of reduced cash expenditures for day-to-day activities. For example, using electronic data interchange systems will allow a business to order goods quickly through the use of technology rather than relying on employees to constantly monitor inventory and place orders.
Using logistics analysis also helps a business decide where to locate facilities for the transportation of physical goods. A producer located in one region of a country will most likely prefer to sell its products nationwide. To do this, it can determine that having multiple locations will allow access to the desired market. Using logistics analysis, companies can determine which geographic locations offer the best options for moving goods by rail or truck, harvesting natural resources, and employing a skilled workforce to produce goods and services.
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