What is logistics?

Logistics is often misunderstood or misinterpreted if you're not in the industry. It is often confused with transport, but transport is only one part of logistics.

Globalization and consumer demands for speed have given the logistics function an indispensable status, which must be mastered in order to

Delivering goods successfully
to receive
and to store

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So what is logistics?

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Where does the term come from and what does the future of the sector look like? SimpleJob tells you everything about this topic, from its origins to today.

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Definition of logistics

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A short story

The word logistics has two meanings, it comes from the Greek word “logistikos,” which means “skilled at calculating,” but it is also related to the Greek word for “manage.”

Two terms that complement each other perfectly and can be summarized in 4 areas:

reflection
strategy
Management
optimization

It all began with the army and wars. Logistics comes from the officer responsible for the lodging, who took care of the troops during the battle, but also the entire organization outside of combat.

Wars put the industry into practice in terms of strategic thinking. Logistics thus became a crucial element in organizing military actions. The aim was to be in the right place at the right time as quickly as possible and avoid any obstacles.

Development later continued in the automotive industry. Originally, the sector served to manage the storage of spare parts and products as optimally as possible. The industrial revolution, with its major technological innovations, accelerated development with the need for more efficient flow management.

At the end of the 20th century, logistics was in a phase of growth and became a central element in companies. Companies no longer simply organized, but worked towards optimal efficiency and cost control.

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A central and cross-divisional function

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Logistics is associated with the activities of transport companies responsible for the delivery and storage of goods. These professionals understand their craft and deliver goods to the right place and at the agreed time.

To achieve this, logisticians must coordinate all internal and external actors before production, during production and after production. This includes managing suppliers and raw materials, then inventory and warehouse management and finally order preparation, managing sales flow, and sending orders.

Logistics is a truly cross-functional area and affects all departments. It is therefore of central importance in a company and makes it possible to connect the departments with each other.

In a company, logistics must be able to respond to both short-term and medium or long-term needs.

Here are the various sections in detail:

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Upstream logistics

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The organization of the supply of raw materials
Coordination between supply and production demand
Supplier management and purchasing optimization

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Logistics within a company

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Warehouse management and inventory control
Quality analysis of production components
Process optimization (products, information, resources)
Definition and implementation of suitable information systems

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Downstream logistics

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Order preparation
customer service management
Optimizing distribution systems
Managing returns and disposal

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A high level of competitiveness

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Logistics is a strategic function that undertakings provides added value. It is in fact a huge competitive advantage that improves the coordination of the company's services among themselves. But above all, mobilization for a common goal enables: customer satisfaction. For some companies, it is a significant competitive advantage that allows them to set themselves apart from their competitors.

Over the years, logistics has developed into an independent discipline within many companies. All major companies have set up their own logistics department. This allows them to better organize and manage the process of products, raw materials and waste that goes through a company.

In fact, logistics offers concrete solutions to the challenges faced by companies. By improving processes, logistics can save time, resources, and money. Delays, delivery bottlenecks or coordination problems can be avoided.

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Marketing and logistics: two closely linked areas

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The areas of marketing and logistics are very close together and the connection between the two is of great importance. Marketing is the driving force here. Once a marketing strategy is defined, such as analyzing consumer needs or developing a new product, logistics takes over the analysis of costs and opportunities.

As with marketing, this is also about customer satisfaction.

Due to its technical nature, rapid development and direct connection with the terms production, information systems and organization, it is constantly evolving and remains an area of expertise that requires advanced knowledge.

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Jobs in continuous change

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Due to the relocation of many production sites and the development of international trade, this is an even more important issue today. More and more qualified jobs are being created and specializations are being developed, such as supply chain managers or logistics engineers.

Omnichannel management (networking of all sales channels and customer contact points used in the company) has been at the center of action for several years. For this reason, companies had to develop a strong strategy to meet consumers' new needs. The combination of flows of goods is sometimes too complex for companies that Logistics and transportation never really mastered.

In logistics, there are therefore both traditional occupations related to warehouse management or production, as well as completely new activities. This has become possible thanks to the creation of high-quality logistics departments in more and more companies.

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How will the industry change in the future?

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In just a few years, e-commerce has become a common form of consumption and offers very interesting opportunities for the sector. Against the backdrop of an ever more saturated market and ever more demanding consumers, speed of execution will be a key element for logisticians.

Environmental awareness is also forcing logistics companies to reconsider their approach. The goal is to become part of a greener and more sustainable logistics system that respects the environment. This covers all areas: