What is the relevance of logistics in terms of my business?

[coolio0234]

WARNING: Idiot newbish question: Why do I need to worry about logistics? I’m a very small business-- home office and a U-Store It for my warehouse. Tend to work on small-scale orders, and I’ve gotten myself nicely settled in very close to the source of the product stream. What about logistics should I have to worry about?

[gamerfan]

There are no idiot questions, only idiots who don’t ask questions. In the most basic sense, logistics means that, not only can you promise to your client that you can ship his order and get it delivered in the agreed-upon time frame, but you can actually perform. If you fail to get product to the destination in the time frame proscribed by your contract, you’ll very likely lose that client, in addition to possible legal damages. Strategic planning and common sense will prevent this from happening, even on as small a scale as you’re operating on.

Similarly, do it for the good of your clients. If, by making prudent use of logistics and other planning, your product reaches the end user neither late nor early, but precisely when it’s required, then he’s able to save considerable capital on warehousing costs and reduce his need for excessive inventory. The just-in-time supply chain model is utterly dependant on sound logistics.

Logistics isn’t just getting goods to the end user on time, either. It covers your internal needs, as well-- raw materials, basic components, office supplies, company cars, uniforms, spare parts, janitor gear, whatever. With this in mind, it becomes clear that logistics is a fundamental function of business. It means that all the little puzzle pieces required both to keep your client happy and your company viable, with a minimum of capital expended to make it so. Sorry to wax so lengthy, but this is sort of a passion of mine. Folks asking “what’s the use of logistics” sort of make me go all commerce nerd.

[dirtyPoster11]

Keep in mind, too, that logistics is doubly important for those of us small businesses still reliant on traditional distribution channels. That is, we aren’t massive Big Box multinationals with enough capital and demand that we can bypass most of the supply chain altogether.

Basically, there’s more moving parts involved in our models, and so it takes more planning and strategy on our end to make all those parts (suppliers, distributors, agents, etc) work together. Planning ahead is a massive part, too, since we’re more heavily affected by increased transportation costs, etc. Don’t think for an instance that you don’t need to concern yourself with logistics just because you’re a small business. It’s one of the most necessary aspects of your company if you intend to keep doing business.

[coolio0234]

So solid logistics means that not only my customers will be happy, but my suppliers, too. Seems like consistent, predictable product turn-around will make my suppliers happier with my company as well. I guess you can tell I didn’t do a lot of reading before asking, but it really seems like logistics makes the machine run.

[gamerfan]

Pretty much, yeah. Keep in mind, logistics grew out of military strategy. It’s the science of feeding and supplying armies. It’s not just the grease that keeps the machine rolling; it’s the oil that helped build the world.