What is ecommerce logistics? An overview
Logistics is a flow that starts from origin to consumption, to put it mildly. Since we are going to go into detail about what is logistics , let’s first look at logistics and its origin. Logistics term was originally coined by military personnel, extensively used while military goods transportation. In the beginning , Mules were one of the first carriers that were chosen for transporting military goods as mules were more flexible and cheaper. But the term logistics has been gaining increased momentum as times go by because it’s more relevant today than it was then given the background of the e-commerce revolution.
Logistics verticals
Logistics takes care of warehouse to destination movement of goods in a timely and cost effective manner. Many firms that specialize in logistics give support to companies, industries and small organizations for fulfilling their needs, whereas giant companies have their own logistics system to take care of their needs, owing commercial flight services, big warehouses and even robotics.
Given the complexity and richness of a large logistics ecosystem, even big fishes can’t even prioritize their long ending dilemmas, and they opt for third party logistics.
Why logistics is so important in ecommerce
All the hard work that goes into getting an order may go haywire if your order doesn’t reach the customer. The more assiduously companies put in efforts to best meet the customer requirements, the better they satisfy the customer needs, so logistics play an integrating role in filling the gap between getting an order from a customer and placing it successfully.
Functions of logistics
Warehousing and transportation are two major aspects of logistics. Warehousing is the storing of inventory before they reach last mile delivery. In a warehouse, the inventory is processed and packed for delivery. Moreover, the goods are protected from potential damages such as decay, theft or package pilferage.
Transportation is the movement of goods among warehouses, retail locations and customers, and transportation modes such as road, rail, air and ocean are chosen after customizing cost and delivery date. Novel and seminal solutions are fundamental to deriving an optimized route and channel for product delivery in a timely manner. For a perspective, it can also extend to order management and inventory planning that prelude to freight management vis-à-vis transportation, which is so vital since the availability and cost of carriers will make or break a plan.
Logistics management involves some of the following
- Planning
- Warehousing
- Materials handling
- Order management
- Inventory management
- Freight management
Logistics planning
- Different types of scenarios and routes are chosen after carefully considering all possible scenarios.
- Transportation plan optimization — including multi-modal, LTL, FTL, and multi-hub trips — that reduce costs and increase resource utilization and services
- Customer demand is measured effectively.
- Inbound and outbound transportation networks should be given more visibility.
- Rapid interruptions in transportation are managed by a secondary feeder facility.
Warehousing: Storing of physical goods is the purpose of warehousing .Warehouses securely store products in an orderly manner so that it can be organized, tracked, and accessed so easily when a new order arrives
Till an order is placed, products are kept in a warehouse. The product is shipped directly to the consumer when receiving an order
Materials handling: materials handling involves handling of goods from source such as a warehouse to a transportation vehicle, and it is achieved using various automated, semi automated and manual instruments. It allows the convenient and safe transportation of materials
Order management: An order management system is a digital way to manage, track and fulfill orders. All the information and processes get tracked by the system, including order number, inventory , fulfillment and after delivery
Inventory management: Usually, inventory management is used to arrange and track company’s stocks and it helps anticipate the products order cycle and demand etc. Managing the inventory is done using re ordering, setting stock threshold etc.
Freight management: It involves efficient and logical coordination between carriers and shippers to ensure that orders are fulfilled on time and on budget. It also helps to streamline the tracking and tracing process
