STUDENTS' CORNER - 115
In this session, we propose to spend some time on ‘The Role of
Logistics in Supply Chain Management’.
Almost all the fundamental principles of business find place in any
discussion on business-related area like, say, logistics and supply chain
management, business administration, marketing and sales, distribution, so on.
Under logistics we have discussed almost
all the significant aspects of business which involves necessarily what is
called supply chain. Today, the most popular area of study is supply chain
We know business deals with selling
products or services generally; this in turn implies that business involves
manufacturing products and selling or offering services, all at a cost that
guarantees some extra-money in the process of business; the extra-money is
well-known as profit. Businesses thrive on profit and business without profit is
like a human being without breath.
Logistics ensures the supply of
materials to the parties concerned in right time in right quantity in right
quality and in right shape to the right customers. Required raw materials must
reach the manufacturer of the products using those raw materials; the
manufactured finished products must reach the customer; in between, if there
are intermediaries, there must be, the products must reach the whole salers and
the agents; then, from the wholesalers or the agents, they must reach the
retailers and from the retailers finally the products must reach the end-user,
the customer. Thus, in all intermediate stages of movements of the products,
there must be no delay or fault and managing all these movements of the
products through carefully selected channels of distribution, efficient
transport must be arranged. All these very basic tasks come under logistics.
Efficient logistics sees to it that all necessary materials, be they raw
materials or finished materials, move in the right direction so that the
specific business planned and executed is accomplished to the satisfaction of
all the parties concerned. From procuring and supply of raw materials to
delivery of the product to the customer, it is the responsibility of the
Again, warehousing, that is storing the
products safely when needed is also part of logistics management. Not only
storing the finished products safely but also storing the required raw
materials and other machineries for need is also a very import duty of the
logistics manager. Indeed, he also plays a critical role in the accounting of
the company. These facts are generally discussed in inventory and accounts.
The essence of efficient logistics rests on providing
superior quality service to the customers; it only means that the needs of the
customers must be adequately met to the satisfaction of the customers. Nowadays,
it is being talked about that mere satisfaction of the customers is not enough;
the customers must be delighted. A
delighted customer prefers to stay with the company even in the face of severe
competition for the product he uses.
Efficient logistics management creates visibility for
the company at every possible opportunity and it ensures ultimately revenue
generation to the company through successful management of the supply chain.
Many companies choose 3PL to carry out some of their logistics
functions. We will look into 3PL
logistics in our next session.