José Luis Salazar Correa 23/08/18

Logística y Cadena de Suministro 15100434

Tarea #3
THE IMPORTANCE OF LOGISTICS
Logistics is about providing the right goods to the right recipient in the right quantity
at the right place at the right time.

Logistics management is a part of supply chain management; it plans, implements

and controls the flow and storage of goods and services in order to meet
customer’s requirements. Logistics management is a basic factor in the success of
any company’s operations and has a direct impact on its bottom line. As freight
volume grows and transportation becomes more complicated, the need for logistics
management rises.

Even small businesses deal with finding suppliers, if not with transporting
merchandise to a store. Small business owners also conduct distribution logistics
with inventory and warehousing. And, every small business owner can tell you
about how they handle reverse logistics, with returned merchandise or refusal of
services. Larger businesses may deal in all four logistic fields.

In the business environment, logistics either have an internal or external focuses

(inbound or outbound). Depending upon the business involved, this part of the
chain can be simple or complicated. For more complicated procedures, third
parties often are hired to conduct any one of the four fields within business
logistics.

Third-party logistics (3PL) involves using external individuals or organizations to

execute logistics activities that have traditionally been performed within an
organization itself. If, for example, a company decides to export its product, it may
hire a person or organization to help with distribution logistics. Today, there is a
movement toward building fourth-party logistics (4PL), which integrates 3PL
competencies and other organizations to design, build, and run comprehensive
supply chain solutions. A 4PL general contractor would manage other 3PLs,
truckers, forwarders, custom house agents, and others, essentially taking
responsibility of a complete process for the customer.

Another specialty includes logistics consulting services. Firms in this industry

specialize in the production and distribution of goods, from the first stages of
securing suppliers to the delivery of finished goods to consumers. Such firms give
advice on improvements in the manufacturing process and productivity, product
quality control, inventory management, packaging, order processing, the
transportation of goods, and materials management and handling. In the process,
these consulting firms might suggest improvements to the manufacturing process
in order to use inputs better, increase productivity, or decrease the amount of
excess inventory. Consulting firms in this segment of the industry also advise on
 José Luis Salazar Correa 23/08/18
Logística y Cadena de Suministro 15100434
Tarea #3
the latest technology that links suppliers, producers, and customers together to
streamline the manufacturing process.

Even project management requires logistics, as one vein of this science

coordinates a sequence of resources to carry out projects. Typical constraints in
project management include scope, time, and budget, or the same constraints
involved in business logistics. The time constraint refers to the amount of time
available to complete a project. The cost constraint refers to the budgeted amount
available for the project. The scope constraint refers to what must be done to
produce the project’s end result.

Logistics is considered to have a significant impact on the performance of a

manufacturing organization. This research uses a pilot study, a large-scale survey
of manufacturing managers and linear structural relationships (LISREL). The
research methods develop measures and test relationships between six
constructs: physical supply, physical distribution, logistic expansion processes,
customer service, manufacturing flexibility and company performance. The results
of the research confirm that logistics influences the manufacturer's ability to satisfy
customers and overall performance. The level of manufacturing flexibility in the
company, as indicated by the presence of advanced process technology and the
participation of manufacturing management in the formulation of strategies, alters
the role of logistics in the success of the organization.

Keeping operations costs to a minimum is a top priority for most business owners
as they strategize to reach maximum profit margins. The speed of modern shipping
methods may make the elimination of large warehousing centers seem like a good
idea. However, warehousing remains a critically important part of the business
supply chain. Consider the benefits of warehousing before reducing this
component of your company's logistics.

This must also be the goal of every company out there, since a company that fails
to do one of these things will not be in business long.

As such the mastery of these "external" logistics functions is tantamount for every
company.

There are however also the "internal" logistics, which deal with the workflow inside
the company. These activities have the goal, to make production more efficient and
therefore cheaper, so that the "external" logistics can be fullfilled easier (e.g. if we
can produce faster we can easier provide our product at the right time).
 José Luis Salazar Correa 23/08/18
Logística y Cadena de Suministro 15100434
Tarea #3

As such logistics (not strictly in the transport sense but also in the sense of
managing a workflow/process) is considered one of the most important fields for
every company.

BIBLIOGRAPHIC SOURCES

Michael Tracey, (1998) "The Importance of Logistics Efficiency to Customer Service and
Firm Performance", The International Journal of Logistics Management, Vol. 9 Issue: 2,
pp.65-81, https://doi.org/10.1108/09574099810805843

Florian Köffel, Logistics Student (2014) consulted in: https://www.quora.com/Why-is-

logistics-important-to-companies

Kimberlee Leonard. (2018) The Importance of Warehousing in a Logistics System

Consulted in: https://smallbusiness.chron.com/importance-warehousing-logistics-system-
74825.html

PLSLogistics.(2015)¿Why is Logistics Management Important? Consulted in:

http://info.plslogistics.com/blog/why-is-logistics-management-important