Logistics management is the part of the supply chain which plans, implements and controls the efficient, effective, forward and backward (reverse) flow and storage of goods, services and information between the point of origin and the point of consumption in order to meet customers' requirements rather to the customers’ delight. Logistics, as a business concept, evolved only in the 1950s. Logistics management This was mainly due to the increasing complexity of supplying one's business with materials, and shipping out products in an increasingly globalized supply chain, calling for experts in the field who are called Supply Chain Logisticians.
This can be definedas having the right item in the right quantity at the right time at the right place for the right price and to the right target customers (consumer); and it is the science of process having its presence in all sectors of the industry. The goal of logistics work is to manage the fruition of project life cycles, supply chains and resultant efficiencies. Logistics is concerned with transmitting the products and services where they are needed or when they are desired. It is difficult to accomplish any marketing or manufacturing without logistical support.
It involves the integration of information, transportation, inventory, warehousing, material handling, and packaging. The operating responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished inventories where required at the lowest cost possible. Responsiveness of the distribution system is to transmit inventory needs to the factory and get the products in the market. The cost inventory consists of holding cost (such as cost of warehousing, tied up capital and obsolescence) and replenishment cost (including the manufacturing cost).
In one of the global logistics study conducted by Deloitte, a set of attributes was developed to identify high opportunity industries with diverse but complementary product flows for the logistics outsourcing industry. The attributes were formulated based on the requirements of the various aspects of supply chain planning and implementation including design, implementation and management of logistics services. The set of attributes derived were to focus attention on those industries that offer greatest opportunity for logistics service providers.
In order to reduce logistics costs and focus on core competencies, Indian companies across verticals are now increasingly seeking and using the services of third-party logistics service providers. Traditionally LSPs (Logistics Service Providers) concentrated mainly on transportation and logistics as they form a major share in logistics. However, in order to keep up with rising demands and customer expectations, companies now also concentrate on value added services like packaging, custom clearance, inventory management and labeling.
The evolving business landscape and increasing competition across industries, is creating the need for more efficient and reliable logistics services than what exists today. For example, rapid growth of organized retail and the need to reach out to the large untapped rural markets in India are necessitating development of strong back end and front end supply networks. While the end user industries like auto, consumer durables, organized retail, etc are direct triggers for the growth of the logistics sector.