Logistics is concerned with getting the products and services where they are needed when they are desired. It is difficult to accomplish any marketing or manufacturing without logistical support. It involves the integration of information, transportation, inventory, warehousing, material handling, and packaging.
The operating responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished inventories where required at the lowest cost possible
The formal definition of the word ‘logistics’ is: – it is the process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.
Within the firm the challenge is to coordinate individual job expertise into an integrated competency focused on servicing customers. In most situations the desired scope of such coordination transcends the individual enterprise, reaching out to include customers as well as material and service suppliers. Ina strategic sense, the senior logistics officer leads a boundary spanning initiative to facilitate effective supply chain relationships. The excitement of contemporary logistics is found in making the combined results of internal and external integration one of the core competencies of an enterprise. Throughout the history of mankind wars have been won and lost through logistical strengths and capabilities or the lack of them. Even though the generals of the past have understood the critical role of logistics it is only in the recent past that the big organizations have realized its role in the achievement of competitive advantage.
Arth Shaw in 1915 pointed out that: the relations between the activities of demand creation and physical supply… illustrate the existence of the 2 principles of interdependence and balance. Failure to co-ordinate any one of these activities with its group-fellows and also with those in the other group, or undue emphasis or outlay put upon any one of these activities, it is certain to upset the equilibrium of forces which mean efficient distribution. The physical distribution of the goods is a problem distinct from the creation of demand. There are many ways of defining logistics but the underlying concept might be defined as follows: ‘Logistics is the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory through the organization and its marketing channels in such a way that current and future profitability are maximized through the cost-effective fulfillment of orders.’
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