To properly lead your business to prosper, you need to ensure each part of the process is streamlined, functioning at its best. When your business is in an industry that needs a well-functioning supply chain and supply chain management, you cannot afford not to get the best possible logistics solutions for your business. Although the world has changed greatly in the past year, logistics services remain largely the same. However, there are certainly improvements, as many people have moved their businesses online.
Keeping that in mind, we will now provide you with an overview of logistics services and the industries that require them the most. Regardless of your need for logistics services, staying informed is the best way to be a step ahead of the competition – and we are here to provide.
What are Logistics Services?
The logistics process is the detailed organization and implementation of a complex operation. A business that deals with fulfilling customer orders has to figure out how to deliver it to them. If the products and/or services are provided and sold online, they have to determine how the products should move from one point to another – and that is when a logistics service provider comes into the picture. They are specially trained companies or individuals who specialize in handling the shipment procedures for your enterprise. They help you coordinate your products to their expected destinations efficiently, such as time and cost-effective freight forwarding.
Role of Logistics
Many procedures lay between manufacturing the product to the final stage of delivering it to the customers. First, the products will be sent to the warehouse to wait for their order to be placed. The product can either spend a considerable amount of time in the warehouse or be ordered as soon as it reaches the warehouse.
The step that follows is arranging for the most suitable means of transport for delivering the products to the postal carriers or retailers. Then, retailers or postal carriers deliver the product to customers. However, transportation is a tricky process with many elements to it – for example, weather conditions. If they are not favorable, it can disrupt the whole transportation process, leading to unintended material or financial losses.
The key purpose of the logistics providers and their services is to oversee all the matters mentioned above. Some of the most common tasks include transportation management and keeping the flow of products running. For example, if a particular client does not have many products to fill the entire vehicle, the logistics service providers strategically combine one customer’s shipments with another shipment to fully utilize the vehicle. Moreover, actions like these can lead to avoiding delays in the deliveries.
Types of Logistics Services
There are six main types of logistics: inbound logistics, outbound logistics, third-party logistics, fourth-party logistics, distribution logistics, and reverse logistics. Each one has a purpose that might or might not be of interest to your business. What does this entail? Simply – it is in your best interest to learn about all of them, so you can choose the exact one you need or might need in the future.
Inbound logistics covers the tasks related to the inner logistics errands and exercises needed to finish their work. It usually refers to the organization’s strategic tasks that strive to ensure the work is done properly from the very beginning. When the supply chain visibility is concerned, this includes the relationship with stakeholders who work further or higher in the supply chain than the organization in question.
As these organizations are heavily dependent upon the business of the other stakeholders included in the supply chain, particular tasks may change significantly depending on the outside factors.
Let us take manufacturers as an example. The manufacturer’s inbound logistics would involve:
- Sourcing crude material.
- Planning the storage of procured materials as means of preparation for and during the assembly process.
- Dealing with the flow of products that leave the production plant.
As opposed to inbound logistics, outbound logistics cover the tasks included in delivering the ordered item or service to the end client. Such strategic obligations generally apply to stakeholders who work moderately downstream, which is usually the last link in the supply chain.
Those obligations include overseeing the storage of manufactured stock, the transportation of merchandise to the final location, and, occasionally, the shipping and handling involved in the process.
Logistics incorporates all supply chain parts that plan, actualize, and control the flow of merchandise and services to meet client prerequisites. 3PL implies that a third party is outsourced for logistics services.
The logistics services can include all tasks that include management and moving resources from one location onto the next. This includes transportation, warehousing, production, and more.
A 4PL is a fourth-party logistics supplier. It basically takes third-party logistics a step further by overseeing resources, innovation, technology, infrastructure, and even managing external 3PLs to configure, fabricate, and supply solutions for businesses.
A 4PL service includes all 3PL services and freight sourcing strategies, network analysis, logistics strategy, design, consultations, business planning, change management, project management, inventory planning, and management. Moreover, it incorporates inbound, outbound, and reverse logistics management into its work. All in all, it covers full supply chain management.
Distribution logistics, also called transport logistics or sale logistics, involve arranging errands, control, and all procedures of concern to the flow of goods and information between manufacturers and clients. Simply put, distribution logistics is the link between the target market and manufacturers.
The responsibilities pertain to all procedures engaged with the distribution of merchandise from manufacturing organizations to customers. Customers could be final end-users, distributors, wholesalers, or processors. Distribution logistics ensure that the manufactured goods and services reach the customer safely and quickly.
Reverse logistics is the set of directed activities after selling an item to recover worth and end the item’s lifecycle. It commonly includes restoring an item to the producer or merchant or sending it on to overhaul, repair, or reuse. It is also called aftermarket supply chain, reseller’s aftermarket logistics, or reverse logistics.
Reverse logistics is the supply chain sector that procedure anything returning inwards through the supply chain or voyaging ‘in reverse’ through the supply chain. Thus the name becomes reverse logistics.
The most common misconception about logistics is people mixing it up with transportation services. As we have already covered what logistics services are and their role in the supply chain, let’s now answer what transportation services are.
The movement of goods, people, and animals from one location to another by road, rail, sea, air, cable, pipeline, or space is known as transportation. Services included in transportation are divided into three aspects: infrastructure, vehicles, and operations. It bears highlighting that transportation is also a crucial part of the process as it allows for communication and trade between two parties.
Now, what is the main difference between logistics and transportation? Although they both deal with getting items from one location to another, logistics has additional benefits and functions. Logistics services also have to deal with packaging, documentation, containerization, storage, insurance, freight damage claims and determining freight class, importing and exporting regulations, working and collaborating, managing vendors and partners, and risk mitigation. Even though these terms have been used as a substation for each other, the key differentiators are -logistics deals with integrating storage, transportation, cataloging, handling, and packaging of goods. In contrast, transportation deals simply with moving products or individuals from one location to the next.
Who Needs Logistics Services?
Some industries cannot afford to have their shipments take several extra days to reach their final destination. Whether it may be due to the shipment’s sensitive nature or a sudden rise in demand that they couldn’t have anticipated, the speed of the shipment’s arrival to its destination is a priority. That’s where the logistics service providers step in. Their logistics solutions are slowly but surely becoming an everyday part of doing business for companies that need fast deliveries regularly. Let us take a look at a few industries that can and should benefit from logistics services.
As the eCommerce business world is growing at a fast speed, customers want their orders quickly, which can help businesses overcome the competition with other retailers. Moreover, it can put its business ahead of other eCommerce companies that offer different shipping and handling-related procedures. Logistics services can give online stores the advantages of getting more orders and ensuring customer satisfaction, assuring they will come back.
Whether you are shipping medical devices or time-sensitive samples, you require an option that can quickly deliver your items to the desired destination, which saves lives and money. A logistic service provider would handle your shipping procedures, emergency supplies, specimens for lab testing, organ transplants, or any other order that you may need to get to a certain destination as quickly as possible.
Having access to the right medications at the right time is crucial. If a shipment of medicine is delayed, this can make a huge difference in the quality of care patients receive. Logistics providers in the pharmaceutical industry ensure the delivery follows the security needs and the regulatory requirements to keep medications in ideal transport conditions.
When manufacturing companies need to get crucial materials from their warehouse quickly, logistics service providers will keep your operation profitable by preventing downtime and unnecessary inventory costs, as well as missed delivery deadlines. Additionally, some delays that can keep your product from hitting the market on time can be made up for if you have different shipping solutions at the ready.
As the name says, this industry experiences a boom in orders at certain times of the year. With the help of a logistics service provider, you can rest assured that you will not be running out of stock right at the moment when customers are buying the most. Keeping in mind that goods related to holidays like Halloween and Christmas only sell well during the weeks leading up to these holidays means that your business can’t afford to wait on a shipment for days.
Why Outsource Logistics Services?
There are many benefits to outsourcing logistics services, and they include but are not limited to:
Freedom to Focus on Critical Operations
Instead of performing logistics services in-house, outsourcing it to a company with in-depth expertise and experience in carrying out logistics operations will help you free up your resources and allow your employees to focus on other crucial operations.
Reduced Back-office Work: Most often, 3PL service providers have sufficient human resources and a working system already in place. For example, they could carry out the whole delivery process within a shorter time frame than it would take your company to do. That frees up your and your employees’ time and, with that, increases productivity.
Enhanced Customer Satisfaction: Logistics service providers know the domain better than anyone else and can innovate and develop new strategies and ideas to reduce costs for their clients further while still delivering a great experience. This, in turn, leads to higher customer satisfaction levels and builds partnerships that can last a lifetime.
Reduced Liabilities and Risk: The logistics service providers help with carrier management, insurance certificates, and safety ratings. Usually, they have back-office staff ready to work with carrier vetting processes, invoicing variances, and similar tasks. This means that the 3PL company is liable for your product while they are doing the work. Furthermore, when you start relying on the expertise of the 3PL provider, their experience allows you to focus on building up your business using a global logistical network, with almost no risk involved.
Efficient Handling of Small Expenditures: Logistics service providers take care of costs of insurance, docking, transportation, fixed warehouse, or other small expenditures. This means that you do not have to deal with small expenditures, which frees up your accounting department’s time.
Tracking in Real-Time: Most 3PLs are technologically advanced enough to allow for real-time tracking and visibility of loads. By tracking your shipments with ease, you spend less time worrying and more time focusing on other core areas.
Cost Efficiency: It’s not good to hold your business responsible for the cost as well as the hassle of fixing your logistical needs. Many professional 3PL service providers can cater to your diverse needs, providing warehouse operations and space, state-of-the-art equipment, and transportation.
Relevant resources, technology, and expertise: A top-notch third-party logistics provider will have a great network of resources. When you consider using a good 3PL provider’s resource network, it indicates that all steps in the supply chain operation will be performed effectively. Moreover, a professional 3PL provider ensures that they are up-to-date with the industry’s best practices, including technology and manufacturing.
Adaptability: Leading third-party logistics service providers own the space and vehicles for storage and transportation. Moreover, they have the ability to adapt to your needs as your business starts to grow. Whether it is a periodical or a constant thing, a reliable 3PL provider will make necessary adjustments to your needs appropriately.
Other relevant benefits include a good warehouse management system (WMS) ensuring your goods’ safety, outsourcing operations process is easy with duly signed documentation, and last but not least – control remains with you, the client.
As a business owner, you should understand the economic value of getting your company’s supply chain management outsourced to a reputable third-party logistics provider. However, you need to make sure that you invest in the right value-added 3PL provider, as they can help you achieve a great return on your investment over time. If you need over the road, air, ocean, or intermodal logistics services from a reputable provider, feel free to explore the services offered by RedBird Logistics Services.