Wednesday, 6 August 2014

What is the Importance of Logistics?

All organisations need to use logistics, which is why it’s a central feature of economic activity. Almost all aspects of human activity depend on the movement of goods. Without logistics the good and materials will not move, which means no operations can take place and no customers would be served, whether they’re buying food to eat or materials for manufacture.

The fact that without logistics nothing would be moved clearly shows the importance of the activities and processes that make up logistics. The problem is logistics is also an expensive activity and it varies between organisations. Many organisations find it difficult to put a figure on how much they spend and many don’t even know the actual final costs. 

The problem is the cost of fuel is riding and this adds to the cost, along with the cost of employment, environment protection, land and safety are all contributing to the rising costs too. To combat the rising costs logistics is working harder to become more efficient, the managers are working to lower their overheads and come up with suitable solutions that will reduce spending. These solutions include reducing the stock inventory, using efficient vehicles, reducing empty journeys and reducing overheads using ecommerce. 

1 comment:

  1. As the spouse of an owner operator, liability insurance also plays a big role in the rising costs of logistics as well as maintenance and breakdowns. How about a better payroll for these drivers that are away from their families days or weeks on end including some holidays. They sacrifice a lot for us the consumers.