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Why Logistics Management Is Essential for Business Success

Logistics performs a significant role in supply chain management, which adds to a company’s success and overall customer satisfaction. There are several factors involved in coming up with an efficient logistic plan. It includes a delivery schedule, automation, and coordination. Every business, big or small, has a share of logistical problems. For small businesses, challenges may include fluctuation in demands, matching competitor’s service level, and inventory imbalance. However, that is not to say bigger companies do not undergo the same challenges.

Logistics: A Brief History

Logistics is a term that originated from the military. It meant the procedure of providing equipment and supplies to military troops. Somehow, it means the same thing today ━ the process of efficient transfer and storage of goods from one place to another, from supplier to consumers. It was during the 1950s that people began using the word logistics as a business concept. Global commercialization, boosting supply chain demand, was the upshot of the Second World War. The method of supplying raw materials to businesses became more complex. Currently, the demand for businesses in improving their logistics management is greater than ever. In this fast-paced world, the younger generations wanted everything to be instant, including shipment. Amazon’s two-day shipping strategy served as a framework for companies wanting a competitive edge.

Logistics versus Supply Chain Management

Most people interchange the meaning of logistics and supply chain management. Nevertheless, there are several crucial distinctions between the two. Supply chain management comprises the company’s broader process of managing and supplying merchandise until it reaches the end customers. In a supply chain, there could be several logistics companies committed to assisting in ensuring that the supply chain runs smoothly. On the other hand, logistics deals with the internal company process of transporting, distributing, storing, and delivering products. Each logistic operation is only accountable for a small self-contained segment of the supply chain. In a nutshell, logistics is a subset of supply chain management.

Logistics: Why It Is Important to Your Business

These are the top reasons why good logistics management is essential for your business.

Gives Competitive Edge

An excellent business logistics and supply chain management can turn any company into an efficient and effective shipment and distribution machine. With a custom-fit and outstanding logistics adjustment, there will be lesser problems ensuring a seamless shipment of merchandise to customers. By providing that, you showcase a distinct competitive edge against other businesses.


By partnering with a third-party logistics company, your business can reduce, or even eliminate, overhead expenses for staff, equipment, and storage space. Other than that, you save your company from daunting taxation requirements and paperwork that comes with logistics management. Farming out your company’s logistics allows your team to focus more on the heart of your business.

Improves Customer Experience

delivery guy with boxes Let us say you are a local restaurant offering delivery service. For you to guarantee your 30 minutes delivery time from placement of the order, your business uses motorcycles for transportation. That way, you could easily maneuver your way on the streets, beating traffic. To avoid unnecessary delays and hassles, especially during peak hours, it is a must to check your motorcycle. If you have some issues with your motorcycle battery, you can always order online for quick replacement and faster delivery. Making sure your customers’ orders arrive at their doorsteps on time or even earlier will result in a positive customer experience. Such experience will result in repeat business, and your repeat customers could even become loyal advocates, promoting your business to friends and family.

Enhances Company Visibility

Getting your company’s logistics right allows your business to widen its market reach. You could make your product or service available across the globe with the right logistics planning. No matter how good your product or service is, if it cannot reach a wider audience, it would still result in a failed business venture.

Bolsters Supply Chain Transparency

With excellent logistics management, you get a better perspective of every stage in the supply chain. By automating your system, you could review historical data and get real-time updates of events. Through this, you can gain valuable insights that could help your business improve its logistics to serve customers better.

Logistics Challenges in the COVID-Infested Economy

With the overwhelming surge of consumers buying essential and non-essential goods since the outbreak of the coronavirus, several online stores, even Amazon, experience logistical problems from supply chain disruption to delivery delays. Although there have been some recent improvements, as lockdowns and stay-at-home regulations are still in place, businesses will still face unprecedented challenges in logistics.
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