The Importance of Logistics in Business

A successful business requires good planning and good planning should include the basics of business logistics.   Without a sound strategy for how your business uses the right tools and procedures with regards to logistics, you can find yourself out of business before you know what happened.

The Right Logistics for the Business

Whether you're building widgets and shipping them out or you're receiving parts to build widgets or you're just pulling in orders and sending out electronic media, each process requires a solid plan for business logistics.    Widgets and production requires moving and freight and shipping and receiving.   It also requires a process for handling all that.   Pushing out electronic media requires a different set of business logistics, primarily those that procure orders, those that prepare to transmit and those that transmit.   No business is too simple to not have a set of sound business logistics.

Coordination Aspects

Each step of the business process requires a sound coordination plan.   The requirements for your next product or job need to be obtained in the right amount, just enough to get started or if it's a manufacturing process then there might be several rounds of prototyping and customer acceptance in the loop too.   You need to find a person to be a coordinator and to get the requirements together in a timely manner.    The procurement of items along with the requirements could be a separate job within the logistics department, but often sits alongside the requirements team.    Finding the right parts or tools or resources to do something with the requirements is a full-time job in itself, or can be setup as a part-time job during a specific phase of the development and production lifecycle.

Physical Logistics

Will getting from point A to point B mean driving your grandmother's sedan or will it be planning for a ship to take freight across the ocean?    Every business has some level of physical logistics, whether it be setting a schedule for picking up ingredients or hauling out bales of hay or even livestock, this part of the logistics chain is critical to ensure that you'll have what you need waiting when you need it.   Someone must take an active role to ensure the product or its components are picked up or delivered on time on budget and in the right order and state.   Moving people into the right place at the right time is also considered part of this link in the chain and that could make or break a business if it's not done properly.

Cost

Unless your business has an unlimited budget, what you need to do with what you have is key to ensuring that the profit margin stays intact.   Paying an additional hidden fee or tax or freight charge could wipe out the profit on an entire shipment or order.   It takes a special individual to handle the cost aspect of the logistics chain because without the art of negotiation and knowing how to strike bargains, then you might as well forget about making profits.   

These are just a few examples of the importance around business logistics, but there are many more depending upon your special needs.   The internet is a great tool to learn more about it.