Logistics and Supply Chain Management: Overview, Roles, Best Practices, and More

Today, companies use complex business models which consist of numerous interconnected entities that work together to run business operations. In this regard, logistics and supply chain management play a crucial role in the smooth movement of goods and services within the organisation and from the suppliers to the end consumers. 

Learn the roles, importance, and best practices of logistics and SCM and how their synergy is crucial for the optimal functioning of business operations.   

What is Logistics and Supply Chain Management: An Overview

Logistics involves all processes related to the movement of goods and services from their point of origin to consumption. It involves strategic coordination, supervision, and execution to ensure the timely availability of the appropriate products at their designated locations in the optimal quantities. 

Now, logistics can be broadly classified into two categories:

• Inbound Logistics: Inbound logistics is the inward flow of resources that a company needs to produce its own goods and services. 
• Outbound Logistics: Outbound logistics involves the storage and transportation of goods to the end user.  

On the other hand, supply chain management involves coordinating all processes ranging from the movement of raw materials from their point of production to the delivery of finished items to consumers.  

It involves a sophisticated approach that aims to establish a steady flow of goods, information and services across the business’s supply chain. 

Decoding the Role of Logistics & Supply Chain Management in Business Operations

Now that you have a clear understanding of logistics and supply chain management let’s move on to their roles. 

The following are the roles of logistics in business operations:

• Order Processing: Order processing entails managing and fulfilling the customers’ orders right from order placement to delivery. 
• Transportation: The transportation process involves determining the most optimised way of facilitating the movement of goods from suppliers to manufacturers and then to the consumers. 
• Inventory Management: Inventory management entails optimising the stock levels to ensure adequate product availability as per the market demand without the risk of overstocking or inventory stockouts.  
• Warehousing: Warehousing includes the storage and distribution of products in order to ensure their availability when and where required. 
• Packaging and Material Handling: Packaging and material handling involves all processes related to safeguarding goods during transportation and storage and ensuring their efficient handling.   
• Information Systems: Information systems include providing real-time data to promote efficient planning, seamless coordination, and effective tracking of the consignment’s status throughout the delivery period.  

Listed below are the roles of supply chain management in business operations:

• Production Planning: Production planning involves chalking out and coordinating the product manufacturing methods and schedules. They include assessing production capacities, resource availability, cost minimisation and overall operational efficiency optimisation.      
• Demand Forecasting: As the name suggests, demand forecasting refers to the process of determining market trends by taking into account factors like historical data, market trends, and other relevant variables to predict future customer demand.  
• Procurement: Procurement includes all processes related to identifying and selecting reputed suppliers that can provide the required raw materials and resources needed for the company’s production process. 
• Order Fulfilment: Under order fulfilment comes all activities related to processing customer orders, ranging from order capture to delivery. 
• Customer Relationship Management (CRM): Customer relationship management involves all processes related to building strong relationships with customers. It includes tasks like resolving queries, understanding their requirements and providing exceptional service. 

Logistics and Supply Chain Management: Importance for Businesses

When it comes to running business operations, both logistics and supply chain management play a crucial role. They facilitate the seamless movement of goods within the organisation ensuring the smooth running of the production mechanism. 

Moreover, these processes ensure timely deliveries to customers, promoting a positive user experience. They ensure that the products are always available on time to cater to market demand. 

Exploring the Best Practices for Logistics and Supply Chain Management

Following are some of the best practices that can help improve logistics and supply chain management in your business:

• Diversifying suppliers in order to avoid delays
• Purchasing supplies in bulk using blanket orders and standing orders to reduce costs
• Optimising inventory management by reliably predicting current and future demand
• Establishing partnerships with suppliers based on factors like pricing, timeliness, and expertise
• Investing in the latest supply chain software that leverages predictive analytics to help companies track the stock in their inventory, how fast it is moving out, and the amount needed in the future
• Tracking key supply chain metrics like inventory velocity, perfect order rate, inventory-to-sales ratio, warehousing costs, and supply chain cycle time
• Facilitating real-time data sharing to improve supply chain visibility
• Implementing risk management strategies for situations like raw material shortages, trade disputes, port disruptions, cybersecurity breaches, theft, natural disasters, etc. 
• Strictly adhering to regulatory compliances in order to avoid potential supply chain disruptions and reputational damage

Continually Adapting and Evolving for Optimal Logistics and Supply Chain Management

Given the increased competition in the current market, it is crucial for businesses to continuously adapt and evolve their supply chain and logistics management processes. 

In this regard, they can consider adopting technological solutions like predictive analytics, AI, machine learning models, etc. By doing so, they can proactively manage their inventory, improve delivery times, optimise vendor sourcing, and automate warehouse operations, enhancing user satisfaction and improving sales.  

Choosing the Right Logistics and Supply Chain Management Partner

When businesses choose the right logistics and supply chain management partner, they get to avail flexible solutions which they can upscale or downscale as per their needs. 

Porter Enterprise enables companies to choose a wide range of trucks based on their transportation requirements. We facilitate seamless deliveries for a wide array of items like agricultural goods, medical supplies, bulk couriers, construction materials, and more. 

Additionally, our service area extends to 20 cities across the country, enabling you to operate a pan-Indian supply chain with ease. 

Try Porter Enterprise today and handle your business logistics like a pro!

FAQs About Logistics and Supply Chain Management