For example, in the natural gas industry, logistics involves managing the pipelines, trucks, storage facilities, and distribution centers that handle oil as it is transformed along the supply chain. An efficient supply chain and effective logistical procedures are essential to reduce costs and to maintain and increase efficiency. Poor logistics lead to untimely deliveries, failure to meet the needs of clientele, and ultimately cause the business to suffer. It requires a high degree of synchronicity between the production systems and the related processes of supply chain partners to maintain the time commitments on delivery and simultaneously, inventories are to be kept low across the chain. The quality of information flow across the chain participants, concerning inputs and finished goods movement, have enormous impact on response times across the chain and on inventory build-ups. Integrated information management has become a key feature in all logistics management systems.
If the flow of goods from production to consumption by procurement logistics, production logistics, and sales logistics is described using the circulatory system of the body, it would be said to be forward logistics. On the other hand, recovery logistics or reverse logistics is the flow that recovers and recycles products, containers, and packaging that have fulfilled their role. Similar to recycling logistics described later, emphasis is being placed on this flow in recycling-oriented societies.
Finished goods arrive at the retailer’s main distribution warehouse for intake. The items are first unitized—broken down from bulk commercial packaging to individual consumer packages. Barcodes are added, then items are sorted, packaged and shipped to the store or a nearby warehouse. Logistics for the retailer begins with intake of goods and continues through the movement of those goods to their final destinations, which in this case is a brick-and-mortar store, not the final customer. If the manufacturer has a direct-to-consumer model, it may use a supply chain as a service provider to get its products to the end customer.
For example, logistics planners must consider warehouse space availability and special requirements such as cold storage, docking facilities and proximity to modes of transportation such as rail lines or shipyards. Attention to logistics can support expanded product lines in good times or provide a basis for gaining a competitive profit edge during periods of slow growth. Whether the goal is increased market shares or increased profits from existing or smaller market shares, logistics considerations can be basic to these accomplishments. Among manufacturers, there has been a general reduction in the number of warehouses through which products of any one company are distributed. Answers to this question require the preparation of a competitive product flow plan, based on information about competitors’ plant locations, production strategies, warehouse locations, and methods of transportation.
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Some universities and academic institutions train students as logisticians, offering undergraduate and postgraduate programs. A university with a primary focus on logistics is Kühne Logistics University in Hamburg, Germany. It is non-profit and supported by Kühne-Foundation of the logistics entrepreneur Klaus Michael Kühne. Traditionally in logistics, configuration may be at the level of the warehouse or at level of the distribution system .
Formats of EDI documents called EDI standards, specify what information goes where within an EDI document. The final step of the delivery process – from a distribution center/facility to the end user – can range from a few blocks to 50 or 100 miles. To deliver orders to consumers, last mile logistics engages parcel or small package carriers. If you want to learn about integration with eCommerce delivery and shipment carriers, read our article dedicated to this topic. In the case of 3PLs, they usually have no assets of their own, but rather match vendors’ shipping requirements to qualified fleet providers.