5 Components of Logistics Operations Management
The logistic operations in a supply chain are controlled and managed by some primary components of Logistics management. These components describe how all the activities are undertaken in a supply chain. Therefore, it is crucial to discuss these main components of logistics operations management. Besides, this discussion also helps differentiate the role of logistics within the supply chains. Logistics management is a complex term; however, you can understand it by understanding its five fundamental components in an International logistic company. Let's discuss further!
5 Fundamental Components of Logistics Management Below is the list of the 5 basic components of logistics management that plays a crucial role in a supply chain: 1. Planning 2. Packaging and Organization 3. Inventory Control
4. Transportation 5. Information and Control Now let's discuss these components in detail to develop a deeper understanding. 1: Planning It all starts with planning. Planning is critical for efficient supply chain connectivity. Besides, it also caters to interface and synchronizing the overall supply chain as a constant process. Market conditions keep changing and sometimes cause disturbance in the demand and supply equilibrium. However, efficient supply chain management needs to ensure manufacturers' constant and unhindered supply of goods. Great planning is required to achieve this, making it one of the most important components of logistics operation management. To keep the supply unhindered, the manufacturers need to work efficiently. However, due to the imbalance in the system, demand does not align with the supply of the products. In such a case, the storage of the surplus goods produced must be planned thoughtfully. Storage units and warehouses can help in such a scenario. The storage units must be well-equipped with storage shelves and racks for the proper placement of the goods. 2: Packaging and Unitization Now that we have seen the importance of planning in systematic logistics operations management, let's discuss another important aspect of care and conditioning of the goods: Packaging and Unitization. Packaging is crucial in a supply chain, and which is why it qualifies as a key component of logistic management. Proper packaging of the goods guards the item during travel from the manufacturer to the retailer. Besides, it also protects against any harm until the retailed moves the item. Packaging of the item also encourages a purchaser to buy it. Many firms are seriously engaged in the research work on the color schemes, designs, and packaging that can encourage potential buyers to make a purchase from them. Unitisation is the process of arranging together a number of similar things into one big delivery unit for their efficient handling and movement. Packaging and
unitisation typically involve the process of packing products in a cubical form, which makes them easy to store, load, and transport.
3: Inventory Control The next important component in the list is inventory control. It is a broad concept that guarantees that the proper measures of stock are taken by a business. It helps them to satisfy customers' needs immediately. Besides, regulating the minimal storage cost is also an important task of the inventory control process. The proper management and control of the inventory require focusing on in-hand items, information of the stock conditions, availability of warehouses, and several others. It involves the following decision makings:
How much stock should keep in hand? Where to store the stock? What quantity is to be stored? Getting the answers to these questions can help you ace the process of inventory control. Besides, you also need to keep a close look at the demand and supply metrics that prevail in the market, which can include the prediction of demand and managing inventories accordingly. Demand keeps changing dynamically. In such a case, inventory control can be a useful tool in structured supply chain management. 4: Transportation Transportation is the next important and fundamental component of logistics operations management which fuels the activities of a national and international logistic company. Transportation is essential at every stage, be it manufacturing, delivery of finished goods, or returning. Transportation is necessary for all the phases of production and delivery. The process includes the planning, management, and controlling an efficient forward and reverse flow of the goods in a supply chain. A myriad of logistic activities relies on transportation that may include different modes, such as road vehicles, freight shipping, train cargo, and air transport.
Some goods that don't have a greater shelf life, such as food items, are not transported too far off places. However, other durable products can be transported to all corners of the world. The safe and disruption-free transportation of goods shouts out for an efficient Transportation Management System. Besides, a sustainable transport system must be energy-efficient and environmental-friendly as well. 5: Information and Control It is an important process that assists in the management of a business. Information and control are required to ensure that diverse operational processes and procedures operate smoothly. It entails real-time delivery tracking, in which the truck driver receives real-time information on where to load the next load and deliver it. The objective of information and control management is to ensure that the businesses operate with their optimal efficiency by reducing wastage. An enterprise involves a plethora of activities and procedures. The component information and control is crucial to operate and manage these operational procedures. The information required for inventory has already been discussed. Order levels help in determining which orders need to be chosen and packed in warehouses, as well as transportation planning and organization. The job of information and control is to assist in the development of information systems that may be used to control operational procedures. Besides, they are also crucial in demand and inventory forecasting. Conclusion Understanding the five components of logistics operation management is an advantageous act for an enterprise. It can bring the activities of logistics management in an optimal shape by eliminating the major shortcomings and introducing the best practices and technologies. These are some of the most complex yet essential areas of supply chain management for a national or international logistic company, and therefore, need to be managed with the utmost care and attention.