According to ghiani, logistics can be defined as the planning and controlling of products and information in an organization, it aims at delivering materials to a given destination for anything trying to optimize a particular measure and ensuring satisfaction of a given set on constraints. These definitions can be simplified to manage the management of the flow of goods as well as services from the point of consumption activities that take place under logistics information integration, warehousing, packaging, inventory, security, transportation, as well as handling of materials. Logistics compliments supply chain by add value to place, as well as time utility.
Logistics are identified in different fields due to performance value. These fields include procurement, after sales, production, disposal, as well as distribution fields. This paper will identify the areas where organizations involve logistics as well as the essence of an effective logistics to a firm or on organization. These fields of logistics determine specific activities. Procurement logistics involve make/ buy decisions supplier and management of other things as well as market research. Production logistics’ key principle is to connect procurement to distribution logistics. This field of logistics determines the capacities of production under available resources in response to distribution logistics. Distribution logistics deal with delivering of finished goods to the consumer or rather customers. Its components include processing, warehousing, as well as transportation. This logistics is most essential since the time, place as well as quantity of production vary from the time, place, and quantity of consumption.
Nowadays logistics have been simplified through l advancements which are mostly technological, plenty of complex things which hinder effective logistics management can now be visualized, modeled, observed and optimized as well through software’s. Using these software’s has become a necessity, businesses that are successful are using this software to case the work of logistics analysis and hence providing effective strategies of managing supply and demand. Problems in logistics majorly occur in organizations that engage in product delivery but they can also occur in firms producing services (Ghiai, 2004). Examples of this include garbage collection, after sales services, as well as mail delivery, among others. Maintenance and operational cost of logistics is another hindrance of its use. Research conducted in the United Stated in 1997 proved that organizations used 862 billion dollars as the total logistics expenditure. It is hence essential for organizations to understand how to minimize the cost of logistics.
