One definition of business logistics speaks of “having the right item in the right quantity at the right time at the right place for the right price in the right condition to the right customer”. Business logistics incorporates all industry sectors and aims to manage the fruition of project life cycles, supply chains, and resultant efficiencies.
The term “business logistics” has evolved since the 1960s due to the increasing complexity of supplying businesses with materials and shipping out products in an increasingly globalized supply chain, leading to a call for professionals called “supply chain logisticians”.
In business, logistics may have either an internal focus (inbound logistics) or an external focus (outbound logistics), covering the flow and storage of materials from point of origin to point of consumption. The main functions of a qualified logistician include inventory management, purchasing, transportation, warehousing, consultation, and the organizing and planning of these activities. Logisticians combine a professional knowledge of each of these functions to coordinate resources in an organization.
There are two fundamentally different forms of logistics: one optimizes a steady flow of material through a network of transport links and storage nodes, while the other coordinates a sequence of resources to carry out some project (ex:restructuring a warehouse).
Nodes of a distribution network
- Factorieswhere products are manufactured or assembled
- A depotor deposit is a standard type of warehouse thought for storing merchandise (high level of inventory).
- Distribution centersare for order processing and order fulfillment (lower level of inventory) and also for receiving returning items from clients.
- Transit points are built for cross dockingactivities, which consist in reassembling cargo units based on deliveries scheduled (only moving merchandise).
- Traditional retail stores of the Mom and Pop variety, modern supermarkets, hypermarkets, discount stores or also voluntary chains, consumer cooperative, groups of consumer with collective buying power. Note that subsidiaries will be mostly owned by another company and franchisers, although using other company brands, actually own the point of sale