Logistics administration

economic-dictionary

Logistics management is the set of operations and strategies that a company must implement. This, to efficiently carry your goods to the end customer.

That is, through this type of administration, those resources that are necessary for the company to develop its economic activity are managed.

The logistics administration covers the identification of the product in each phase of its transport, the storage of goods, among others.

Correct logistics management supposes, therefore, that a firm is able to supply its clients according to their demand. In turn, you must ensure that the business generates an economic benefit.

So, logistics management requires the coordination of tasks of storage, transformation and distribution of production elements to the end consumer. Thus, the lowest possible associated cost is sought.

Through optimal logistics management, it is possible to more efficiently control a supply control and process chain that ultimately has an impact on the economic health and profits of the company. All of this design is detailed in the organization's strategic plan.

Bases of logistics administration

Proper logistics management must be based on speed. In other words, the firm must be able to face its operations by reducing as much as possible the average response time in each of its phases of the distribution chain.

Additionally, there must be a very rigorous control regarding quantities and locations in each part of the production process. In this way, saving and optimizing resources is sought.

Taking into account the evolution of the markets and their characteristics, different concepts have appeared in economics and marketing that propose a guide for logistics management, as is the case of cross docking. In simple terms, this is a model that seeks to avoid prolonged storage of goods.

Elements that hinder good logistics management

Any situation that could go against or slow down the efficiency or effectiveness of the supply chain makes logistics management difficult, such as:

  • Repetition or duplication of processes.
  • Problems derived from poor or low inventory turnover.
  • Waste of resources or error in the identification and estimation of the cost of the input or merchandise.
  • Excessive number of legal, fiscal or bureaucratic obstacles.

Tags:  administration economic-analysis Business 

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