It is significant to acknowledge various types of logistics in various stages of SC processes like; purchasing, production, distribution, distribution, and various things relevant to after-sale services. today, we’ll discuss the various types of logistics in supply chain management; its definition, and various categories.
What is Logistics in SCM?
Logistics in supply chain management is the process of transporting products and goods from the suppliers to the manufacturing facility and to end customers. The entire process comprises various activities ranging from planning to implementation on how the company acquires, transport, store, and distribute goods to the end consumer. However, various types of logistics management help you to achieve end-to-end transparency for the growth of your business.
Nowadays, logistics management has become a key element of SCM processes. It is necessary to launch an effective logistics strategy to amplify the customer service and delivery processes. However, it comprises various activities and processes and they’re as follows;
- Inventory control
- Storing
- Packaging
- Warehouse management
- Delivery service
Quick, easy, and seamless movement of goods and products from the production unit to the end customers helps companies to gain a competitive edge.
Logistics Strategies
Some of the main logistics strategies are as follows;
Sustainable Logistics
It also goes by the name of green logistics. It comprises taking corrective measures in the transportation industry to decrease the damaging impact on the environment due to logistics activities. However, it means decreasing the carbon footprint and fuel consumption in the logistics activities and processes in the long term.
4th Party Logistics
4PL is a form of the operational and functional model and it offers quick and easy SCM solutions to businesses and companies. However, it comprises various activities and processes ranging from inbound to outbound logistical operations.
3rd Party Logistics
3PL is the method of outsourcing logistics services. Businesses and companies offer 3PL services and they comprise inventory management, transportation, warehousing, order fulfillment, and others.
Integrated Logistics
As the name implies, it comprises coordination among various business activities and departments with the objective of completing orders effectively and efficiently.
Types of Logistics in Supply Chain Management
Some of the main types of logistics in supply chain management are as follows;
Purchasing and Procurement Logistics
Procurement and purchasing logistics have the obligation of managing supplies required for the sale and manufacturing of raw supplies, semi-finished goods, and finished goods. Businesses and companies employ the following strategies for organizing and managing procurement logistics;
I-Safety Stock
It comprises storing and warehousing products and goods that you need for production and manufacturing to avoid issues like supplier delays and changes in demand.
II-Production and Synced
SC planning happens with the objective of meeting manufacturing and production demands. It allows you to know in advance how much and when to stock merchandise whether stored temporarily or easily.
III-Just-in-Time
JIT comprises receiving the necessary supplies and materials while completing the production and manufacturing process; not ahead of time. However, it goes a long way in storing them.
It is difficult to keep in mind various variables for effective and efficient procurement and purchasing logistics. It comprises of following;
- Choosing suppliers
- Number of stock ordered
- Frequency of procurement
- Inventory management of applied model
- Load unit time
- Transporting, managing, and storing products
Manufacturing Logistics
Manufacturing and industrial logistics comprise amplifying various processes ranging from purchasing raw materials to the development of final products. Some of the main types of production and manufacturing strategies are as follows;
I-Make to Order, Pull System
The manufacturing and production of products start after receiving the orders from the customers.
II-Make to Stock, Push System
The production and manufacturing of products ahead of time and then stored in the warehouse. The departmental sale would also sell the available merchandise.
The goal and objective of industrial logistics is to decrease the manufacturing lead time. It takes a lot of time from the point of production and manufacturing order until the finished goods.
Distribution Logistics
It also goes by the name of transport logistics. It comprises making sure goods and products approach customers efficiently and effectively. However, it offers affordable, functional, and attractive if you don’t agree that the customers would receive it in the pre-decided quantity, condition, and timing. The distribution logistics could be the following;
I-Indirect
It comprises of sending merchandise material to the retailers and wholesalers, contrary to the end consumers.
II-Direct
It consists of charging the manufacturers and producers by directly sending the products and goods to the end consumers.
After the production and manufacturing of goods and products, the distribution logistics comprises of following steps;
- Production and manufacturing
- Transportation
- Storage
- Order preparation
- Delivering it to the end consumers
Reverse Logistics
The reverse logistics comprises managing refunds and product returns. Reverse logistics has got following types;
I-Waste logistics
It deals with the recover, treatment, and recycling of waste in order to take advantage of it or avoid environmental damage.
II-Return logistics
It is a very common type and it has developed due to online and e-commerce platforms. It comprises sending return orders back to the distribution centers.
The activities of efficient reverse logistics are the same as those of logistics operations. The main difference is that they should develop a proper system that won’t get mixed up with the warehousing operations.
Conclusion: Types of Logistics in Supply Chain Management
After an in-depth study of various types of logistics in supply chain management; we have realized that logistics management plays a key role in the SCM operations and processes. If you are learning about logistical processes, then you should keep in mind the abovementioned types.
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