Classification of the main types of logistics

Classification of the main types of logistics

Logistics is a strategic direction of the company, which allows you to significantly reduce costs in the field of procurement, production and delivery, eliminate risks and stand out from competitors. As a result of competent systematization and optimization of key business processes, the conclusion of profitable deals and the attraction of new customers is ensured. Today we will analyze the definition and types of logistics, its tasks in business, and at the end of the article we will consider how to choose the right transport and logistics company.

Contents

Logistics definition

Referring to the world experience, we can safely say that the use of logistics significantly increases the efficiency of doing business.

In successful projects with a worldwide reputation (Ford Motors, Honda, Coca-Cola, IBM), logistics has been the main component since the first days of their existence.

The term is of Greek origin and means - to reason, calculate. This direction is considered as a tool to ensure high competitiveness and reduce the company's losses to minimum values.

To thrive, entrepreneurs strive to anticipate and ensure that consumer needs are met. Today the "golden rule" of business is a combination of three "n":

  • desired action;
  • desired time;
  • desired location.

A logistics strategy helps to achieve the ideal result. The key function of logistics is to ensure the company's competitive attractiveness in the market.

This happens by managing material, information and financial flows in compliance with six principles:

  • Cargo in demand from the buyer.
  • Excellent product quality.
  • Amount required.
  • Timely delivery.
  • Arrival at the desired location.
  • Minimum expenses of the company.

Summarizing, we can say that if the goods that satisfy the consumer's need were delivered to the right place on time, we can assume that the logistics task has been completed.

How it works

Logistics; what is it in simple words, types, services

Classification and types of logistics

All types of logistics are closely interconnected. The main feature of its classification is its functional orientation.

Logistics as a term in a broad interpretation means the science of the rational distribution of material, information and financial flows. Such a universal concept requires a systemic classification. Division by scale, functional focus, types of resources and other distinctive features - are considered in the proposed material.

Logistics types by functional area

General logistics methods are applicable to almost all areas of economic activity. Each of the functional areas is characterized by its own characteristics that set the specifics of resource flow management. For ease of perception, the classification by the type of business activity is summarized in a short table.

Functional areas of logistics Brief description of Procurement Selection of the optimal source of supply and determination of the feasibility of establishing own production of the initial product. production Internal distribution of resource flows of the enterprise. Management of sales of finished products (for trade organizations - goods) and its stocks. Inventory creation Development of an optimal reservation system for initial products and goods in order to ensure uninterrupted supply and distribution. Selection of the most profitable channels for the formation of logistics chains, through which delivery will be made in a timely manner and at the lowest cost. Customs clearance Organization of import, export and transit international resource flows. Routing of information exchange related to customs administration. money assets management. Organization of the system of optimization of goods turnover, consumer service and warehouse management. energetics Rational distribution of energy flows (electrical, heat).

Large enterprises tend to use an integrated approach that integrates all or most of their activities.

The above table can be supplemented with other categories of functionally specialized logistics. Possible sectors of the economy that require a special approach to regulating flows include, for example, tourism and the hotel business. It makes sense to consider some types separately.

Procurement

Economics claims that every enterprise, implementing commercial policy, acquires objects of labor. Perhaps, in modern conditions, the universality of this provision can be challenged: some types of activity, mainly associated with the production of intangible assets, do without working capital, and sometimes without fixed assets. But operating firms are forced to purchase components, consumables and raw materials.

Trading networks maintain a variety of assortments by receiving goods from different suppliers.

The purpose of procurement logistics is reduced to an efficient solution of the threefold problem:

  • Timely provision of production (trade) of primary products intended for processing (resale) at the lowest possible prices. In other words, the business must be profitable and operate without downtime.
  • Optimization of circulating assets. This means avoiding overstocking of warehouses with sufficient stocks.
  • Quality control of raw materials, raw materials, components and goods.

Logistics is an important area for optimizing the activities of a transport or manufacturing company. Rational management of all resources can significantly increase profits.

Book Description

Book Reviews

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