According to Ghiani (2004), logistics can be defined as the planning and control of products and information in an organization. It aims to deliver materials to one specific destination for another in order to optimize a specific measure and ensure compliance with a specific set of constraints. These definitions can be simplistically understood to mean managing the flow of goods and services from the point of production to the point of consumption to ensure that the needs of the consumer are met. Logistics activities include information integration, warehousing, packaging, inventory, security, transportation, and material handling. Logistics complements the supply chain with added value for place and time.
Logistics is identified based on the performance value in different areas. These areas include procurement, after sales, production, disposal and sales areas. This paper will identify the areas in which organizations incorporate logistics and the essence of effective logistics for an organization.
These areas of logistics determine specific activities. Procurement logistics includes make/buy decisions, supplier and other management, and market research. The central principle of production logistics is the connection of procurement with distribution logistics. This area of logistics determines the capacities of production under the available resources in response to distribution logistics. Distribution logistics deals with the delivery of finished goods to the consumer or customer. Its components include processing, storage and transport. This logistics is extremely important because the time, place and amount of production differ from the time, place and amount of consumption.
Nowadays, logistics have been simplified by technological advances. Complexities that hinder effective logistics management can now be visualized, modeled, optimized and analyzed using special simulation software. These complexities have necessitated the use of this software. Successful companies use this software to analyze the work of logistics analysis to provide effective supply and demand management strategies. Logistics problems mainly occur in organizations dealing with the delivery of products, but they can also occur in companies that provide services (Ghiani, 2004). Examples of this include garbage collection, customer service and mail delivery. Logistics maintenance and operation costs are another obstacle to their use. Research conducted in the United States in 1997 shows that organizations spend a total of $862 billion on logistics. Therefore, it is imperative for organizations to understand how to minimize logistics costs (Rushton, 2000).
Reliability and sustainability are other factors that influence the efficiency of logistics. Reliable systems as well as devices should be able to fulfill the intended purpose for the identified period of time under the specified conditions through effective logistics. Inefficient logistics lead to a false probability of system performance and thus to massive losses. Reliability will thus project the likelihood of systems and equipment in an organization (Landford, 2006).
In summary, the main problem in logistics is deciding how and when to ship, transport and store raw materials and finished products. This is most evident in modern societies as opposed to other types of management. A logistic system consisting of facilities corresponding to transportation services. Facilities include sites where goods are processed and include manufacturing centers, distribution centers, transportation terminals, and landfills, to name a few. The transportation services move goods between facilities.