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What is a Logistics Chain?

What is a Logistics Chain?

The flow of information and movements that take place during the various stages, as well as all the procedures involving product storage, transportation, and distribution, are all included in the logistics chain. 

Delivering goods to customers in predetermined amounts, at predetermined times, and under predetermined circumstances is the job of the logistics chain.

Products are accurately transferred from the manufacturing or distribution center to the designated location thanks to a number of procedures that are integrated into the logistics chain. This phase covers steps like product delivery and shipping to other warehouses or final consumers.

The workflows involved in the storage and delivery of items are part of the logistics chain, together with the data produced by the various operations. In order to save costs and preserve product or service quality, the logistics chain must link suppliers, manufacturers, logistics providers, and end users.

By maximizing steps like product storage and transportation, the logistics chain's major objective is to make sure that things are moved as efficiently as possible from the manufacturing line to their destination.

Logistic Chain Type

Depending on the needs and profile of the company, there are different types of logistics chains:

1. Industrial organization logistics chain

It is characterized by mass production of goods, so it is customary for one manufacturer to store and distribute products to many customers. This type of logistics chain requires efficient planning to adequately supply production lines, fulfill purchase orders, and most importantly, optimize costs.

2. Commercial enterprise logistics chain

It focuses on acquiring products for subsequent resale without intermediate transformation stages. This business logistics chain stands out for its continuous flow of materials. This requires efficiencies in the storage and transportation phases to avoid unforeseen logistics costs.

3. Service company logistics chain

The priority of this type of chain is to meet customer needs. The service business logistics chain must adapt to the needs of the organization, which offers both intangible and variable services.

What are the Stages of the Logistics Chain?

The logistics chain entails the planning and coordinating of all product movement, storage, management of warehouse location, administration of production and distribution centers, and coordination of internal and external product transportation.

The following are the main phases of the logistics chain:

  • Logistics planning, among others, by considering product turnover, SKU storage, and order storage and fulfillment.
  • Recording and receiving of goods and stock inventory prior to storage.
  • Storage location management, i.e. allocation of positions in the warehousing system to different SKUs for deployment.
  • Internal movement of goods between two areas of the facility or between different warehouse zones.
  • Coordination of order preparation stages, for example, product picking and packing.
  • Handling of goods with conventional and/or automatic handling equipment. This stage also includes the possibility of assembling products in the warehouse (kitting).
  • Organization of freight forwarding and delivery of orders to the point of sale or end customer.

Logistics Chain vs. Supply chain

Supply chain and logistics chains are frequently used interchangeably. However, logistics is actually a stage in a product's supply chain. The logistics chain is in charge of efficiently distributing items to the final customer by overseeing all operations related to product distribution, storage, and transportation. 

Among other operations, the logistics chain involves inventory management, order processing, and fleet management of transportation.

The responsibilities included in the supply chain, however, also include those involved in the design and manufacture of products, such as the management of production lines and the acquisition of raw materials. 

The executive at the top, known as the supply chain manager, has the responsibility of reducing production costs, coordinating sales efforts, and providing effective customer service.

How to Digitize the Logistics Chain

New technologies in warehouses, production centers and other logistics facilities make it possible to automate their operations. The information flows generated in the logistics chain phase can be digitized with a warehouse management system (WMS).

More and more businesses are investing in digital technologies to automate both their supply chains and logistics networks.

Real-time inventory control is possible with a WMS.

This prevents both overstocking, which raises transportation costs, and running out of stock, which could damage the company's reputation. 

This logistics software ensures full product traceability, a fundamental factor in the logistics chain of industrial and food companies. How? WMS closely monitors the product by gathering information in the phase that the goods have gone through.

When it comes to order taking, one of the most fundamental yet challenging processes in the logistics chain, digitization can make all the difference. This is where a tool like Interlake Mecalux's Easy WMS comes in handy because it automates the management of merchandise at numerous points throughout the warehouse. 

WMS determines the optimal placement for each SKU in accordance with product turnover and storage conditions, among other requirements, based on a set of rules and criteria established by the logistics manager.

In addition, logistics software coordinates the movement of goods, automated and conventional handling equipment, and operators to ensure the safety and efficiency of logistics facilities. The logistics software will also define the carrier selection path and configure order delivery with the aim of optimizing the logistics chain.


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