Customer Response
This is also known as Outbound Logistics or Distribution and involves the movement of a finished product or service to the customer. This activity involves liaising with the customer to agree acceptable delivery arrangements. This may also involve Handling and Packing of finished goods in appropriate, protective packaging to ensure they arrive at the customer in the desired condition.
Inventory Planning and Management
Inventory is held to protect against uncertainty in supply and to meet unexpected customer demand. The key objective is to avoid a stock-out situation whereby an organisation runs out of sufficient materials to maintain production. Whilst holding inventory can ensure continuity in operations and customer satisfaction, it also incurs significant cost to an organisation. Therefore, it is the Logistics function’s role to carefully plan and manage inventory levels to support the financial objectives of the organisation.
Supply
This is also known as Inbound Logistics and involves liaising with suppliers to plan deliveries and receive materials. Securing supplies of goods to maintain continuity of operations is an essential responsibility of the logistics function. This role is frequently known as Material Planning and it is important for a material planner to build strong relationships with suppliers.
Transportation
This involves the selection of an appropriate transport mode for the movement. Modes of transport have specific strengths and weaknesses which must be considered to ensure the most efficient methods are selected for the specific goods movements. For instance, when time is the determining factor, air freight may be appropriate but if cost is the priority, a more cost effective method such as rail or sea freight may be more appropriate.
Warehousing
This involves the storage of raw materials, semi-finished materials, consumables and finished goods in a secure, appropriate environment. A warehouse could serve a single manufacturing facility or be a central hub within a logistics network where finished goods are stored before being delivered to the customer, known as a Distribution Centre.