In its original
sense, the word refers to the movement of the military troops from one place to
another where they are supposed to be with intermediate stays in lodges duly
arranged. But, later the scope of the
logistics evolved manifold to include movements of goods, services and even
information. The word logistics thus has come to mean basically movements of
things from one place to another with a specific purpose.
business of any kind at any level is possible without movement of things, and, since
no economy of any nation can survive and sustain itself without business,
logistics has gained extraordinary but essential importance for trade and
commerce. Economic transactions and logistics are inseparable. Now, logistics
can be defined as the effective movement of goods and services from the place
of origin to the place of consumption. This involves everything one can think
of in connection with trade and commerce.
For example, in brief, the one who dispatches must have the very things
needed by the other to dispatch; it means the sender has the right inventory of
things. Next, he must plan movement in such a way that things reach the
receiver in time; it means the right selection of the mode of transport; again,
the thing he dispatches must not be damaged in any way before it reaches the
desired place; it means packaging. Above all, he must send the things at a
lower cost so that his profit margin does not suffer much. It means economies
of scale in respect of logistics. For the one who receives it, he must market
the goods in time to the right customers. It might mean, as it is becoming
popular nowadays in all cities, minor door delivery movements of goods. From
this rapid survey of business areas, it is clear that logistics forms the
backbone of any industry. To grow in trade and in commerce means to grow in
effective logistics. It applies to all institutions of business, domestic and
Now let us see
some popular definitions of ‘logistics’.
Logistics is the general management of how resources are
acquired, stored and transported to their final destination.
The science of planning, organizing and managing activities
that provide goods or services.
is defined as a business planning framework for the management of material, service,
information and capital flows. It includes the increasingly complex
information, communication and control systems required in today's business
process of planning, implementing, and controlling the efficient, effective
flow and storage of goods, services, and related information from point of
origin to point of consumption for the purpose of conforming to customer
Philip Kotler defines logistics as
“planning, implementing, and controlling the physical flows of materials and
finished goods from point of origin to point of use to meet the customer’s need
at a profit”.From these various definitions, it is clear that logistics refers to a
process which is essentially a movement of goods etc to the customers for their
requirements. Philip Kotler’s definition adds one very significant point: at
profit. Every branch of business needs
profit to sustain itself and logistics is no exception. Without excess money on
the investment, no business can thrive.