What is Logistics Management? Definition from FreightRun.comPosted On 22th January 2016
There is a misconception that Logistics Management’s sole function is to reduce freight costs. Proper Logistics Management should enable superior planning and that should mean less expensive expedited shipments that blow up the budget because you must ship a pallet of material on a chartered jet or team driven express trucker. So Logistics Management does have the goal to reduce the incidence of expedited shipping since that cost is wasteful. But Logistics Management does not mean choosing the least expensive carrier every time; it means balancing that cost with the delivery requirements and on-time performance record of a particular carrier.
Logistics Management also can means building a more robust “supply-chain” in the sense of being less fragile to inventory, production, port disruptions, weather, “Black Swans” (unexpected events), and disruptions due to labor strikes, computer and cloud system breakdowns. An overemphasis by Logistics Managers on cost reductions can make the supply chain vulnerable and unable to serve the customers and can severely damage the business. “Predictions” of orders based on, for instance, statistical studies or historical studies can be another source of fragility in the supply chain - they are apt to be radically wrong some years and so safeguards need to be built into the supply chain.
So logistics management done well involves excellent judgement and proper orchestration across the enterprise of all actors involved in transportation, production, distribution and sales functions.