When discussing logistics concerning supply chain management, we’re usually referring to the movement and control of materials from the point of origin to the point of consumption.
So, what’s the goal here?
The aim of logistics can be summed up in the 7Rs:
“Getting the right product, in the right quantity, in the right condition, at the right place, at the right time, to the right customer, at the right price.”
This topic is, of course, a fairly huge topic, with many (pun intended) moving parts involved – what goes on between Point A and Point B?
The 12 elements of logistics: What we’ll cover
In today’s article, we’ll be focusing on four discrete categories of logistics operations to explore 12 elements of logistics. These four categories will be:
- Category 1: Supply logistics
- Category 2: Inventory management
- Category 3: Freight logistics
- Category 4: Logistics infrastructure
Note: We won’t be touching on the logistics of production, reverse logistics, or specialist logistics operations in this high-speed rundown of the elements of logistics.
Let’s dive in!
Category 1: Supply logistics (AKA “Who needs what?”)
First up is supply logistics, which is concerned with sourcing and attaining essential materials and products.
Procurement
Procurement is the process of choosing, ordering, and acquiring materials or products.
It occurs at multiple points along the supply chain, including in the purchasing of:
- Raw materials (for use in production)
- Indirect materials (for use in the production process)
- Transportation (for freight or distribution of an end product)
- An end product (for sale to the end market)
Procurement equips a business with the materials, supplies, or products needed to function.
Order processing
Order processing is the workflow that involves setting up and fulfilling an order. This workflow can include order picking, quality control, and assigning tracking information.
Again, this step can be relevant to the inbound logistics of raw materials and the outbound logistics of delivering an end product.
Category 2: Inventory management (AKA “What have we got where?”)
Inventory management involves the storing, handling, and preparing of a business’ stock – whether that’s of raw material, partially formed product or final product.
Warehousing
Warehouse management involves not just storing materials and stock, but the processes that allow materials to move in and out of the storage area.
Organizing your materials is crucial to ensure safe storage and smooth flow of materials.
Materials handling
While in a warehouse or storage facility, you’ll often need to move items from one location to another. We call this materials handling.
Materials handling can be manual, assisted (through equipment such as forklifts), or automated (through machinery or robotic solutions).
The safe movement of materials allows for load storage, preparation, and shipping.
Inventory control
Inventory control is “the process of managing a company’s warehouse inventory levels.”
Inventory management may include:
- Tracking existing inventory and incoming inventory
- Optimization of stock levels (to avoid stockouts or
- Managing the cost of inventory storage
- Forecasting demand levels
While inventory managers often use inventory control for direct materials and products, it can also refer to the maintenance of appropriate levels of MRO materials.
Packaging
Packaging is an essential element of logistics, and appropriate packaging can help avoid various issues, including damage, non-compliance, and delays.
Not only does packaging work to protect shipments, but it can make sure they’re easier to lift, move, and store safely. In addition, proper labeling ensures that the correct goods reach the right destination on time.
Category 3: Freight Logistics (AKA “Getting from A to B”)
Inbound transportation
Inbound freight involves transporting raw products or materials from a supplier or vendor to a business.
The logistics of moving goods by air, sea, or land and distances can vary widely. However, whether you’re sourcing globally or from a local supplier down the road, the inbound transportation of materials is central to the logistics journey.
Outbound transportation
On the other hand, outbound freight is the transportation of finished products from a business onwards to vendors, distributors, or customers.
Touchpoints along this supply chain section might include distribution centers, retailers, or a third-party logistics company.
Like inbound freight, this might also involve transporting products long distances. However, it also typically incorporates some form of intermodal transportation that may culminate in using a smaller courier vehicle such as an urban delivery truck.
Fleet management
With all these different shipments going on, fleet management takes control of overseeing and optimizing the use of a fleet of vehicles.
This set of processes typically includes monitoring compliance, ensuring environmental standards are met, consolidating loads to increase efficiency, optimizing routes for fuel efficiency, and generally organizing the use of the vehicles and other modes of transport.
Category 4: Logistics infrastructure (AKA “What we need to get the job done”)
Our final category – logistics infrastructure – includes the equipment, buildings, people, and tools needed to make it all come together.
Facilities and infrastructure
Logistics infrastructure can include many buildings and facilities, including factories, warehouses, industrial parks, and distribution centers.
The safe maintenance of these locations is essential to the function of the other elements mentioned in this article.
Personnel
From truck drivers to traffic managers, inventory management specialists to procurement managers, the personnel that power the supply chain is an essential logistics element.
Information and control
Finally, the coordination of each element mentioned both requires and generates a lot of data that can be utilized to optimize further, forecast, and improve logistics operations.
Information and control facilitate the planning and analysis of all logistical processes, helping to track and control these in the present and work to make strategic improvements in the future.
For logistics support you can count on, there’s Jansson
If you’re feeling a little whiplashed after that speed tour of the 12 elements of logistics, you’re not alone.
At Jansson, we have the expertise and experience to offer quality logistics and transportation support that lets you take a much-needed step back.
For a free quote or to find out more about what we offer, reach out to Jansson today.
