Logistics management as the name suggests refers to that process by which the company manages the flow of production which starts from the procurement of raw material and ends with the delivery of the finished product to the end-user which is the consumer. In simple words suppose your kid is intelligent but he or she will need school, as well as a mentor to be successful in the same way company, needs logistics no matter how good the product of the company is as without logistics management it will not reach its destination that is in the hands of the consumer. In order to understand this concept in a better way, one should look at some of the advantages and disadvantages of logistics management –
Advantages of Logistics Management
Better Inventory Management
The first and foremost advantage of logistics management is that it helps the company in inventory management because since the focus of logistics management is on managing the flow of production it ensures that the company never faces the situation of shortage of raw materials or not able to deliver the products to the consumers on time or excess supply situation. In simple words, logistics management indirectly helps the company in inventory management also thus giving the company a dual advantage.
Increases Efficiency
It also helps the company in increasing the efficiency of the company because the whole idea of logistics management is to ensure that time is given importance and since everything is planned and managed in a timely manner it helps the company in increasing the overall efficiency because in companies this is a common problem where one department has too much work and another department has no or little work which results in a decrease in the overall efficiency of the company.
Better Control due to Logistics Management
In the case of management, control is very important as all planning can go haywire if there are no proper controls in place and that is where logistics management helps the company in achieving the control with respect to the flow of production which ensures that all plans of the company are achieved properly and without delay. In simple words, if your kid is good at study but you do not pay attention or have control then he or she can easily distract due to wrong company resulting in not achieving good grades in studies, in the same way, a good product can easily become worse if there are no proper controls in place which is exactly what logistics management tries to do.
Disadvantages of Logistics Management
Difficult to Implement
The biggest disadvantage of logistics management is that on paper it is easier but practically it is very difficult to implement and hence theoretically speaking this may sound like a great strategy but when it is implemented company may not be prepared for the problems and hence the whole strategy may fail leading to loss as well as embarrassment for the company.
Logistics Management is a Long Term Process
This is a long-term process because the company needs to establish and maintain relations with all parties involved like suppliers, transporters, delivery team and so on which requires patience as well as market standing of the company which few companies can do. In simple words just like no school can make the kid genius overnight in the same way no company can make the logistics management work overnight. In simple words unlike other marketing techniques like publicity, sales promotion which can be done quickly this process requires time and hence only a few companies can do logistics management successfully.
Limited to Big and Medium Companies
Logistics management is a specialized job and requires talent as well as will knowledge which in turn requires specialist and we all know that not all companies can afford to take the help of the specialist and hence logistics management is limited to big and some medium-sized companies having deep pockets and cannot be used by all the companies.
As one can see from the above that logistics management has pros as well as cons and that is the reason why any company thinking of having logistics management in the company should carefully read the above points and then only should take any decision as there is no guarantee that if logistics management has worked for one company than it will work for other companies also as there are many factors which affect the success of logistics management.