Introduction to Logistics in the Economy and Organization


   Logistics has been called by many names, including the following: Business logistics, Channel management, Distribution, Industrial logistics, Logistical management, Materials management, Physical distribution, Quick-response systems, Supply chain management, Supply management.

   What these terms have in common is that they deal with the management of the flow of goods or materials from point of origin to point of consumption, and in some cases, even to the point of disposal. The Council of Logistics Management (CLM), one of the leading professional organizations for logistics personnel, uses the term in logistics management to describe: the process of planning, implementing and controlling the effective flow and storage of goods, services, and related information from point of consumption for the purpose of conforming to customer requirements.

   This definition includes the flow of materials and services in both the manufacturing and service sectors. The service sector includes entities such as the government, hospitals, hanks, retailers and wholesalers. In addition, the ultimate disposal, recycling, and reuse of the products need to the considered because logistics is becoming increasingly responsible for issues such as removing packaging materials once a product is delivered and removing old equipment.

   Logistics is relevant to all enterprises, including government, institutions such as hospitals and schools, and service organizations such as retailers, banks and financial organizations. Some of the many activities encompassed under the logistics umbrella, which illustrates that logistics is depend upon natural, human, financial, and information resources for input. Suppliers provide raw materials which logistics manages in the form of raw materials, in process inventory, and finished goods. Management actions provide the framework for logistics activities through the process of planning, implementation, and control. The outputs of the logistics system are competitive advantage, time and place utility, efficient movement to the customer, and providing a logistics service mix such that logistics becomes a proprietary asset of the organization.