Logistics and the Supply Chain
Logistics and the Supply Chain
Logistics is a critical component of the business supply chain and has three primary concerns which are receiving, storing and delivering a physical product. According to the Council of Supply Chain Management Professionals (CSCMP), logistics “is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements.” (Murphy Jr. & Knemeyer, 2015). Logistics “includes coordination and collaboration with channel partners which can be suppliers, intermediaries, third-party service providers, and customers” (Jones, 2012).

The term logistics itself has origins in the military but has evolved as a business concept to be a vital part of many businesses in this day and age and has differentiated into many different fields throughout the years. The four main fields within logistics are procurement logistics, production logistics, distribution logistics and disposal logistics.

“Procurement Logistics is the entire process used to select suppliers and negotiate contracts for delivery of goods or services” (Jones, 2012). This field of logistics includes market research activities, supplier management and ordering among many other tasks. Production logistics streamlines and controls the flow through the supply chain and includes activities “related to organizational concepts, layout planning, production planning, and control” (Jones, 2012). The delivery of finished products to the customer is known as distribution logistics. Distribution logistics integrates the ordering process, transportation of inventory, warehousing and material handling among others. Finally, disposal or reverse logistics” stands for all operations related to the reuse of products and materials. The main function of this field is to reduce logistics cost, enhance service, and save natural resources” (Jones, 2012)