Understanding the concept of supply chain

An Introduction

The logistics service industry is defined generally as the acquiring, producing, and shipping of goods and materials to an ultimate or final destination. The industry involves more than 500 million people worldwide and sees annual revenues in excess of $75 billion dollars. Logistics services involve the movement of goods and materials between their point of origin and their location of use or disposition.

Logistics service refers to the entire range of activities associated with receiving, producing, transporting, marketing, storing, and distribution of goods and materials.

Transportation services include air freight, land and sea freight, trucking, rail, maritime transportation, and other forms of transportation used to bring resources to and from one location to another.

What does a supply chain consist of?

When considering the supply chain, it is important to remember that there are five main parts: manufacturing, transportation, distribution, retailing, and storage.

  • The manufacturing part of the logistics chain is what brings together the manufacturing and production process with the supply chain. At the manufacturing facility, raw materials are manufactured, tested, assembled, packaged, and shipped to the warehouse.
  • The transportation portion takes raw materials from the manufacturing facility to the point where they will be used in the final product; it may be by road, rail, or air. Distribution centres receive the finished product and transport it to the retail outlet.
  • The distribution logistics portion involves the movement of goods between the warehouse and the consumer. This portion also takes into consideration the transport of finished goods. Distribution logistics involves the design and creation of a distribution system, including warehousing facilities, loading docks, trucking routes, and warehouse equipment.
  • The last portion of the logistics system is the reverse logistics, which handles return and refund requests. The reverse logistics include international trade, which requires the shipment of goods to another country. Because of the many ways logistics services are used around the world, it’s only natural to learn about the different types of logistics that are available.

What is the need of supply chain management & Outsourcing?

Supply chain management is an area of expertise that includes the physical warehouse, receiving, and distribution stages. This can be outsourced or handled internally depending on individual company requirements.

When companies purchase goods, they have to maintain an accurate inventory level of all products, including incoming and outgoing shipments. In order to obtain an accurate inventory, logisticians will use shipping manifests, invoices, and other related information to create an accurate inventory picture.

The trend of buying one product in bulk at a time makes it difficult for many companies to keep their inventories balanced. However, some companies find that by outsourcing their supply needs, this is much easier.

 

Functions of Logistics service  

  • The main functions of these businesses include the movement of freight between points in the supply chain.
  • They also provide warehousing and off-loading services. Warehousing refers to the process of moving resources from one location in the supply chain to another.
  • Off-loading is the temporary storage of finished goods that will be transported to the intended locations later or that need to be moved temporarily for one reason or another.
  • In order to perform a successful supply chain logistician must have a sound knowledge of business requirements, current market conditions, the physical environment of the business, and business strategies.

Different Types of logistics

In addition to business logistics, there are other types of logistics. These include transportation, warehousing, special materials, manufacturing, construction, food processing, and environmental remediation.

One type of logistics service that is growing rapidly and finding applications in both the private and public sectors is procurement logistics. Procurement logistics includes the process of purchasing needed goods and materials from suppliers, inventories, and factories that manufacture these goods.

 

Role of Business logistics

Business logistics are required when developing and executing a product or service, preparing the goods for shipment, storing finished goods, receiving, packing, and shipping goods.

Business logisticians can forecast demand, establish quality controls, determine transportation methods, evaluate waste disposal and audit inventory systems.

Logistics service providers work to provide businesses, governments, and individuals the ability to fulfil their needs through the efficient use of their resources.

They prepare reports regarding performance of all aspects of the supply chain and perform any necessary assessments. They develop and implement policies and procedures that comply with governmental requirements.

Logistics support in distribution also includes creating an accurate distribution network. A company needs to maintain a complete and accurate distribution network in order to meet their delivery and fulfilment needs.

Lastly, by using logistics services like http://www.vanglogistics.com/  to perform  tasks of supply chain, companies are able to save money and increase profits.

1 thought on “Understanding the concept of supply chain”

  1. You’re right, understanding supply chains can be helpful to understand how pricing works. This is important when you want to use such a service.

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