In essence, logistics management is the overall administration of all available resources to meet the demands of the public or the targeted consumers of each company. This requires the involvement of several key areas of the organization to ensure the smooth flow of business, not only in terms of sales and finances, but also service delivery to its market. In general, this is the amalgamation of all resources and departments to join forces in solving any existing issues and achieving an organizational goal.
The business approach of today incorporates every personnel and every machine that contributes to the overall success of the company. Approaches may involve Six Sigma—a known analytical tool of which the proponent is Motorola—to identify the defects and its sources and to come up with correct action plans that will reduce the occurrence of these defects. The Six Sigma principle indicates that there should only be six defects for every million output.
Once defects are analyzed and its sources are figured out, the organization will know where to put its energy instead of blindly creating new approaches to every problem that will occur. The main goal is to prevent the occurrence of the problem by eliminating the defects from the actual source. Sometimes, this may involve man, machine, method, and process. There may be extraneous variables, such as environmental factors and personal behaviors that may not be easily addressed. In this case, a long term action plan is necessary.
Logistics management not only involves personnel but also resources. For example, a business office may get its paper supplies from one source, its pencils from another one, and its ink from another company. One organization does not source its tools from one company alone. The main goal of logistics in terms of resources is to find the cheapest yet durable or ideal material from different sources and put these materials together to come up with a product. A canned good factory gets its sodium glutamate from one company and its processed meat from another. In the end, the final output is the canned good.
Add to this the several key functional areas that play critical roles in the output or the product. Plus, even if the product is good to go, there has to be people who will take care of its marketing and advertising. There is no point in coming up with the most delicious food in the market if no one will know about it. To address this, a company employs marketing strategies that streamlines public awareness of the products existence. This involves trucking, advertising, and so on.
Other than that, the goods should be kept fresh and of high quality to meet the standards of the consumers. This means that every person and every machine should have a controlled output in relation to the demand of the people. There should never be overproduction, as this will eventually lead to lost revenue. A good product that cannot be consumed is of no value to anyone. All of these things—manpower, production, raw materials and resources, marketing, and service delivery—should be centralized before a company can say that it has an efficient and effective logistics management strategy.
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