According to Ghiani (2004), logistics can be defined as the planning and controlling of products and information in an organization. It aims at delivering materials to a given destination for another trying to optimize a particular measure and ensuring satisfaction of a particular set of constraints. These definitions can be simplified to mean the managing of the flow of goods as well as services from the point of manufacture to the point of consumption ensuring that the requirements of the consumer are observed. Activities under logistics include information integration, warehousing, packaging, inventory, security, transportation, as well as handling of materials. Logistics compliments supply chain by add value to place, as well as time utility.
Logistics are identified in different fields due to performance value. These fields include procurement, after sales, production, disposal, as well as distribution fields. This paper will identify the areas where organizations involve logistics as well as the essence of an effective logistics to an organization.
These fields of logistics determine specific activities. Procurement logistics involve make/buy decisions, supplier and other management, as well as market research. Production logistics’ key principle is to connect procurement to distribution logistics. This field of logistics determines the capacities of production under available resources in response to distribution logistics. Distribution logistics deal with delivering of finished goods to the consumer or rather customers. Its components include processing, warehousing, as well as transportation. This logistics is most essential since the time, place as well as quantity of production vary from the time, place, and quantity of consumption.
Today, logistics have been simplified through technological advancements. Complexities which hinder effective logistics management can now be visualized, modeled, optimized and analyzed through particular simulation software. These complexities have necessitated the use of this software. Successful businesses are using this software to case the work of logistics analysis and hence providing effective strategies of managing supply and demand. Problems in logistics majorly occur in organizations that engage in product delivery but they can also occur in firms producing services (Ghiani, 2004). Examples of this include garbage collection, after sales services, as well as mail delivery, among others. Maintenance and operational cost of logistics is another hindrance of its use. Research conducted in the United Stated in 1997 proved that organizations used 862 billion dollars as the total logistics expenditure. It is hence essential for organizations to understand how to minimize logistics cost (Rushton, 2000).
Reliability and sustainability are other factors which affect the efficiency of logistics. Reliable systems as well as equipment’s should be able to perform intended purpose for the identified period under stated conditions through effective logistics. Inefficient logistics will lead to a wrong probability on performance capabilities of systems hence causing massive losses. Reliability will thus project the probability of systems and equipment in an organization (Landford, 2006).
