In the theater of war, logistics was used to describe the complex process of moving troops and their equipment. Shortly after the Second World War—in particular, during the 1950s–the concept was borrowed by the industrial world to handle the increasingly complex business of storing and moving goods and services.
This demand for organized storage and distribution locally, regionally, and internationally created a new field of management: logisticians to orchestrate supply chain functions.
The Council of Supply Chain Management Professionals (CSCMP), a worldwide association of professional supply chain logisticians, offers a comprehensive definition of the entire business: “Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.”
The four primary fields of logistics
What supply chain logisticians generally do is manage the four primary fields of logistics: procurement, production, distribution, and disposal.
- Procurement Logistics is related to activities like market research, planning requirements, making decisions about manufacturing or buying, managing suppliers, and controlling orders.
- Production Logistics is related to activities like concept generation, layout planning, and production planning.
- Distribution Logistics is related to activities like processing orders, warehousing, and arranging transportation.
- Disposal Logistics, often called Reverse Logistics, is related to activities like reusing products and materials, reducing the cost of logistics, and saving natural resources.
The importance of logistics for companies today
All companies, whether they are small business or large organizations, which have physical goods are engaged in the supply chain. Depending on the nature of the business, this can be simple or complex, inbound or outbound.
Usually, if the supply chain is simple, like say, a small import-export business, it can be handled by the business itself. However, as a business grows supply chain functions can quickly become overwhelming. This is why large companies typically rely on third-party logistics companies to deal with handling the problems associated with storing goods or moving them from one place to another in an orderly manner.
Since large organizations usually have very complex storage and distribution needs, companies that offer supply and demand solutions will inevitably need to cover a broad range of businesses and handle a diverse range of projects. Without this elaborate infrastructure and network of facilities or strategic partners, things can become increasingly chaotic. A solutions-focused company like Unigroup Logistics company, for instance, has a relocation network in over a hundred countries, covers a wide spectrum of businesses, offers domestic or international distribution, and can offer clients millions of square feet for domestic or worldwide storage. It quickly becomes obvious that hiring a third party logistics company can free up a big business to focus on its core competencies instead of dealing with the massive complexity associated with managing, storing, and delivering physical products to customers.
While it required a tremendous amount of organization and coordination to move an army from one side of the world to another, today’s commercial logistics operations require a level of sophistication that would have impressed the military generals of the Second World War.
For more information on careers in supply chain management, visit scmedu.org.