Concept of Supply Chain Management

Logistic may be defined as a complex movement of employees, products, and services. With the increasing competition and dynamism in the business environment, every business organization should develop a communicative supply chain management system. This will enable the business to fight against the growing competition. 

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Distribution chain management is a critical area to deal with in the context of financial performance of a business. It is important for the top management to look into the pros and cons of developing the supply chain and product distribution network.

Defining Logistics

Logistic refers to the function of storage and movement of products from the place of business to the final consumer, the place of production to the place of packaging or from the wholesaler to the retailer. Logistic as a concept comprises of every item related to business namely finished products, employees, machinery, etc. Logistics can be termed as a complex process to meet the transportation needs of the customer on a timely basis.

The concept of Logistics & Supply Management

There is a basic difference between the concept of logistics and supply chain management. When the area of concern is internal movement within the organization, like the movement of raw material and finished products, it comes under the purview of logistics, while the movement outside the premises of the organization that are external to the business is known as supply chain management. It includes distribution of products from suppliers to wholesalers to retailers. 

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Importance of Logistics

Logistics management may look into many areas in a business; namely distribution, the order of raw material, the supply of finished goods, etc; but the main area of service is the customer management. If the business is unable to maintain and grow its customer base, the basic purpose of supply chain management is dissolved.

However, it is necessary to carry out a cost-benefit analysis before the implementation of Logistic management. If the expenses of implementation of logistics management is more than the value it will be able to create, then it should not be implemented.

Process of Transportation

The area of utmost importance in the operations and logistics management is the transportation process. The capability of the transportation process to ensure that the goods are delivered to the final consumer on a timely basis is a major task. Due to the implementation of logistic management in an organization, business expenses like transportation cost, weight control, power and electricity expenses are reduced. Thus, one can say that transportation plays an important role in logistic management.

The effectiveness and efficiency in an organization can be improved by implementing a reliable transportation network with the help of logistic management system. 

Logistics help the business to improve its transportation time, reduce the cost involved and help manage the transportation network better.

E-Commerce in Supply chain management

With dynamic business environment, combining supply chain management and E-commerce has become the need of the hour. The interaction between the final consumer and business with the help of the world wide web has helped business create more value for the consumer at a comparatively lower cost. The combination of the internet with supply chain management has helped the business as well as the final consumer keep a check on the movement of goods with the help of live tracking systems, and this has reduced the cost of maintaining call centers to attend to such queries.