How Logistics Operations Can Optimize Your Supply Chain Management

Logistics operations refer to the process of moving products from their manufacturer or a distribution center all the way to the end customers. Without solid logistics operations, your e-commerce business won’t be able to successfully meet customer demand. 

When you have the right planning, infrastructure, processes, and technology in place, your logistics operations run smoothly and efficiently. This means orders get to customers in a timely and accurate manner, and your customers are satisfied. 

What Are Logistics Operations?

Logistics operations cover every part of the process of moving finished goods from their manufacturer, distribution center, or fulfillment center to customers. Many different processes are involved in logistics operations, including inventory management, processing orders, and shipping orders. 

Large companies often have logistics coordinators or managers who manage all the logistics operations. Smaller companies generally handle logistics operations themselves. 

Are Logistics Operations & Supply Chain Management the Same Thing?

While these terms are often used interchangeably, logistics operations and supply chain management are actually slightly different. Whereas logistics operations deal primarily with the storage and movement of goods, supply chain management is more comprehensive.

They also differ somewhat in their goals. Logistics operations are chiefly targeted at customer satisfaction, ensuring short delivery times and accurate order fulfillment. Supply chain management is more focused on gaining a competitive advantage in the marketplace. 

How Do Logistics Operations Work for E-Commerce Businesses?

Robust order fulfillment capabilities are key to the success of any e-commerce business. If there are continual hiccups in this process, an online business is not likely to succeed. This is where solid logistics operations come in.

With streamlined logistics operations, orders can be processed quickly and accurately. Products can be picked and packed without issue, and orders can then be smoothly shipped to customers. 

Inventory management factors into logistics operations, working to ensure that products are not out of stock. With proper management, items are restocked when they run low, avoiding back-ordered products. Good logistics operations effectively forecast demand, ensuring supply is there. 

Activities to Manage 

While logistics operations involve the broad idea of managing the entire process of moving goods, they are made up of many smaller actions. Each of these activities is complex in its own right, so it’s important to regularly assess each part of the process, ensuring it is working well. 

Here are smaller processes involved in logistics operations:

Supply

Suppliers or manufacturers are often the first parties in logistics operations. Suppliers provide raw materials, whereas manufacturers supply the finished products. 

It’s important to choose a reputable supplier or manufacturer with a track record of providing goods on time and in good condition. Take the time to foster this relationship, as it will be essential to the success of your e-commerce business.

Distribution Centers

If you don’t fulfill orders yourself in-house, you likely work with a distribution or fulfillment center. These establishments manage the order fulfillment process for you, allowing you to focus on other aspects of your business. 

Since inventory is stored at distribution centers throughout the country that may be closer to your customers, you can often save on shipping costs. Your customers will also get their deliveries sooner.

Warehousing Services

Before your products are sold, they must be stored somewhere, and this is where warehousing comes in. If you are doing your own order fulfillment, you may rent warehouse space where you house your inventory. If you’re using distribution centers, your inventory will be stored in those centers.

A robust warehouse management system (WMS) is imperative to effectively manage your inventory. If you are working with a distribution center, they will use their own WMS. This system will track when products come in, where they are stored, and when they are ordered and shipped out.

Accurate orders speak volumes about your company’s logistics operations. They are a sign that things are running well.

Shipping

If you fill orders in-house, you’ll likely work with a shipping carrier to get volume discounts. If you work with a distribution center, they will handle the shipping process for you. 

No matter which option you use, your logistics operations will manage the shipping process, tracking timelines and costs for all shipments. The goal of logistics operations is to keep the process running smoothly.

How to Optimize Your Logistics Operations

Any improvements you make to your logistics operations directly affect your supply chain management. Whether you’re looking to make big changes to your supply chain or tweak little things for an aggregate impact, you can effectively optimize your logistics operations with attention to a few details.

Inventory Management

With quality inventory management software, you can manage your inventory in real time. This means products will never be out of stock when a customer places an order. 

Automated Order Processing & Fulfillment

You can save significant time with automated order processing and fulfillment. You’ll still have employees involved in certain aspects of the picking and packaging process, but automation can take over some of the activities. This means less room for human error and faster order fulfillment. 

Technology Warehousing Solutions

Implementing a WMS will help you better manage inventory levels, cut waste, and boost overall productivity. You’ll have a bird’s-eye-view of your operations and how you can improve them to bolster your supply chain efficiency.

Reporting Capabilities 

You need data to make informed decisions that can improve your logistics operations. Various software solutions can gather that data for you and offer reports that are easy to understand. 

Partner With Logistipedia to Improve Your Logistics Operations

Determining where to improve your logistics operations can be a tedious and confusing process. At Logistipedia, we’re experts in logistics and supply chain management. We can gather the data you need, analyze it, and suggest improvements for increased efficiency, lower costs, and higher revenue.

Contact us today to get started. 

Logistics Operations FAQs

How do logistics operations work?

Logistics operations manage the entire process of moving finished goods to customers. There are many steps involved in logistics operations, such as inventory management, order processing, picking items, and packaging and shipping orders.

What is the best way to manage logistics operations?

Many companies manage their logistics operations in-house, but this can be time-consuming. You can also hire a third-party entity to manage them for you. They can suggest areas for improvement that can save your business money, shorten your order fulfillment timeline, and result in happier customers. 

How can you easily improve logistics operations?

Technology is one of the easiest ways to improve your logistics operations. Software solutions allow you to easily manage inventory, quickly process orders, ensure accuracy in picking and packing, and track products along every step of the fulfillment journey. 

Is supply chain the same as logistics?

No, though they are similar. The supply chain involves many different parties, including suppliers, retailers, customers, and other parties. They all work together to manage the flow of goods, meeting all established requirements along the way.

Logistics operations simply govern the movement of goods from manufacturer or retailer to the end customer. Logistics operations are a bit more granular, whereas supply chain management is a bit more macro. That being said, both terms are often used interchangeably today.

References

What Is the Difference Between Logistics and Supply Chain Management? (March 2019). IIM Udaipur Chronicles.