Logistics and warehouse companies provide logistical solutions to many organizations. Particularly, these services involve the management of freight, warehousing and inventory management. Businesses often outsource certain functions to logistical organizations to lower costs and increase the competence of their supply chains. Logistics companies are usually intermediary logistics service providers and specialize in a precise area of logistics.
In business, logistics is referred to as the structured movement of products, as well as their storage and packaging. It also refers to the practice of planning and managing the flow and storage of goods and services between the point of origin and the point of use. In the logistics and warehouse industries, logistics is the part of the supply chain management that involves warehousing, transportation, inventory, product handling, packing, distribution and security.
- Business Logistics
Business logistics focuses on achieving the optimal demand-service level at a low rate. The key purpose of business logistics is to have control over the movement of resources and supplies. Businesses need to ensure that essential products are in the right area at the right time. A business suffers if it doesn’t coordinate its supply chain.
Another major purpose of logistics is the management of inventory, which involves the control of static inventory, as well as moving the inventory from one location to another. A company must know how much inventory to keep in its warehouse and how fast it can restock inventory from suppliers in order to avoid delays.
- Logistics Companies
The increasing complexity of supplying manufacturers with materials and shipping out goods brings about logistics as a business. Logistics companies commonly focus on the transportation, distribution, storage and packaging of products. External organizations are regularly used by manufacturing companies to execute logistics functions. This allows manufacturers to concentrate on the core business of manufacturing.
- Third-Party and Fourth-Party Logistics
Third-party logistics is the outsourcing of the logistics function to external organizations, while fourth-party logistics companies develop and employ a complete supply-chain solution for an organization that usually involves the utilization of several third-party logistics providers. A third-party logistics company performs a particular logistics function. A fourth-party logistics organization, on the other hand, utilizes its resources and potentials to handle the complete logistics process for customers.