Types of logistics

economic-dictionary

Logistics is a discipline that encompasses all the operations to be carried out so that the product reaches the consumer in perfect condition. Consequently, by encompassing so many operations, there are different types of logistics.

In our economic dictionary, we have defined the concept of logistics. Of course, the concept is so broad that it is necessary to write and develop an article for the types of logistics.

It should be noted that logistics is an essential point for the company. Usually we tend to believe that logistics is just transporting products to be sold. Nothing is further from reality. Logistics is much more than that. Since, if we pay attention to the definition, we will realize that it is "all that is necessary" for the product to reach the customer.

Therefore, logistics can be classified according to several aspects. On the one hand, we can classify the types of logistics depending on the phase of the production process that takes place. While, on the other hand, we can classify the types of logistics according to the strategy carried out.

Types of logistics according to the phase of the production process

We could summarize the production process in storage, transformation and distribution. In addition, to these three stages, we will add after-sales service. The types of logistics according to the phase of the production process are:

Procurement logistics

This is the type of logistics that ensures that the company receives the materials necessary for production in the appropriate time. Among the main functions of supply logistics are:

  • Choose providers
  • Ensure that delivery times are met
  • Inventory management
  • Analyze the production needs of the company
  • Study the trends of the items you buy
  • Ensuring the quality of supplies

The supply logistics takes care of everything that has to do with the above.It is an essential point in the production process. It is very important that there is good communication between all parties to buy raw materials at a better price, of better quality and within the considered period. If this section does not work well, the company will lose money. It may happen that the supply is greater, that it arrives after the deadline, that it arrives in poor condition. All of these are losses for the company.

Warehouse logistics

Storage logistics is within what is known as internal logistics. It ensures that all supplies that arrive at the company are correctly stored and duly registered. Among the tasks or functions he is in charge of are:

  • Update inventories
  • Record of the place where they are stored
  • Plan storage areas according to the type of product
  • Facilitate the incorporation of supplies into the production process
  • Indicate how each of the supplies will be transported.

In short, storage logistics deals with the phase of the production process that goes from when supplies enter the company, until they are incorporated into the production process.

Production logistics

Production logistics is one that ensures that raw materials or supplies pass from one phase of the transformation to another until the end of the product. Production logistics are also part of internal logistics.

From the moment the supplies are received from the warehouse until they leave it, they are managed by the production logistics department. There are many companies that transform products in various phases. For example, to produce a car you have to build several pieces and then put them together until you have the complete car.

Among the main tasks attributable to production logistics are:

  • Transform products
  • Transport intermediate products to the next transformation phase
  • Ensure that the transformation following quality standards
  • Prepare the final product to be distributed

Although there are many other functions, we could summarize it in the previously mentioned ones. Without a doubt it is a fundamental part where (in case of not being done well) it will be possible to incur higher costs and less quantity produced.

Distribution logistics

Distribution logistics is one that is responsible for transporting the final products to their destination. This destination can be points of sale (owned by the company itself), other companies or the final consumer.

Depending on the final recipient of this phase, the logistics will have different characteristics. However, in general, distribution logistics is responsible for:

  • Type and size of packaging.
  • Vehicles in which it is transported.
  • Areas in which it is distributed.

Clearly, distribution logistics encompasses much more. Thus, each of the tasks listed above has to answer many questions. For example, in the case of vehicles in which to transport, it will be necessary to think if we do it by motorcycle, car, truck, boat, plane. In addition, the transport chosen will depend in turn on the type and size of packaging and the location.

That is, the three variables are interrelated. If we have several types of products (some very fragile and others more robust), we must be careful not to mix them so that they arrive in good condition. The vehicle must also be conditioned.

But what if separating fragile and non-fragile products leads to increased costs? If they are not separated, what is the additional cost in time and money? And if we do not separate them, we will have less costs. But what would be the cost of the possible breakage of some products?

The logistics of distribution is responsible for all this, analyzing and coordinating all these types of decisions.

Reverse logistics

Reverse logistics deals with the opposite process of all the types of logistics described above. That is, precisely to manage all possible waste (reusable or not), products in poor condition or sent by mistake.

This section could be part of the after-sales service. However, reverse logistics is much more than that. It is not only responsible for returning the products that customers return. It also ensures that the excess material in other phases of the production process is reused, recycled or properly disposed of the products that must be taken to a landfill.

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