The concept of Logistics Management consists of the process of planning. Implementing and controlling the efficient flow of raw materials. Processed goods and finished goods and related information – from the point of origin to the point of consumption. With the aim of providing satisfaction to customers.
Speaking of logistics is not far from the name of the inventory. In the Big Indonesian Dictionary (KBBI), logistics means the procurement, maintenance, distribution, the supply of equipment, supplies, and employment.
The word logistics itself can be interpreted as procurement. Then logistics also has a close relationship with inventory management. Inventory management is an activity to maintain the amount of inventory.
Many people assume that Logistics is the same as the Warehouse. In fact, basically Logistics and warehouses are two different things. The warehouse is a place to store goods and is one form of logistics activities, while logistics means a broader process. Not just warehousing but also involves the acquisition of goods, handling, controlling, and shipping.
Information technology is one of the most important parts of Logistics Management. The development of Information and Technology today. Allows a company to find the product they want anytime and anywhere in the world.
Understanding Logistics Management
Logistics Management is one of the important components. Supply Chain Management which is used to meet customer demand through planning. Implementing, controlling the efficiency, and effectiveness of flow. Storage of goods, service services, and related information from the starting point to the destination point. Logistics Management can help companies reduce costs and improve service to customers (customers).
The Purpose of Logistics Management
Logistics Management Objectives can be divided into two, namely General Purpose and Special Purpose. The following explanation:
1. General Purpose
The general objectives of Logistics Management consist of Operational Objectives and Financial Objectives. Operational Objectives are intended so that the available inventory of goods has accuracy in quantity. And quality standards in accordance with quality management standards. While financial goals emphasize more on the efficiency of costs incurred.
2. Special Purpose
In essence, the Special Purpose of Logistics Management focuses more on achieving organizational goals effectively and efficiently.
Logistics Management which involves processing orders, warehousing, handling raw materials/products, packaging, and shipping methods is also a sector. That is growing very rapidly in the business world. Without the support of good Logistics Management. The company’s Production and Marketing activities will be very difficult to carry out.
Benefits of Logistics Management
In addition to having a goal, the Management system in Logistics also provides benefits, especially for companies. The benefits of having Logistics Management are as follows:
- The company can carry out operational management activities properly
- Companies can focus more on other fields of management because the needs of goods are available
- Provide special facilities for storage and transportation facilities for the distribution of goods
- Provide good service to customers and stakeholders (suppliers)
- Maintain the availability of goods
- Make it easy to get suppliers with good quality goods.
- Make special delivery services
- Anticipate problems that might occur quickly, precisely, and accurately
- Providing information is more organized and runs smoothly
- Build consumer confidence and foster customer loyalty to the company.
Logistics Management Activities
A well-implemented logistics management will help companies reduce costs and improve customer service. So that the company becomes more productive and increases company profits.
Logistics Management activities include:
The purpose of logistics planning means the process of one activity to think, examine. Calculate and formulate actions to be taken in the future relating to operational activities in managing logistics. The use of logistics, as well as organizing, and controlling logistics.
Namely, the activities are undertaken to design and formulate formal structures as an effort to manage logistics. By carrying out activities of grouping, organizing. And distributing activities or tasks as well as the authority to each work unit or member of the organization.
Supervision means an effort to maintain the implementation of every action. And activity in logistics management in accordance with a predetermined plan both related to the use of logistics. The process in progress, and the results and outputs of the logistics management which are forms of supervision.
Have the intention of all activities to provide logistics in accordance with the needs both related to the type. And specifications of the amount of time and place with prices and sources that can be accounted for
Inventory is an activity of providing data or all logistics owned, controlled, and managed by a company. Both for the results of its own manufacturing business, the purchase of gifts or grants.
6. Storage (storage)
This means that administrative and operational logistical management activity is related to the formulation. And the implementation of administrative work arrangements and the arrangement of goods in storage (warehouses).
Distribution here means logistics management activities related to the distribution. And delivery of logistics to units that need it in accordance with a predetermined work system.
What is meant by maintenance here is an activity in the framework of managing logistics related to efforts. To maintain the technical condition of the usability. And results of logistics as well as to ensure the period of time. The use of goods reaches an optimal deadline.
The intention is an activity to free logistics from liability that applies both physically. And administratively because the function of the logistics has been deemed ineffective or has no use-value.
Logistics Management System
The more complex the network in the supply chain (production location, warehousing, and consumer distance). The more dynamic the consumer demand, and the increasing competition. The company is required to make important decisions in a quick time and must consider all parties in the company.
Good decisions must be supported by reliable infrastructure and information. The point is that there is valid data available on time. As well as infrastructure that ensures information security from viruses and unauthorized interference from parties.
An information system is a system that functions to process data into information. Its function is to summarize data as input, the process by doing calculations, combining data elements. Up-dating and others, and obtaining information as output.
Information system elements include:
- Transaction processing information system
- Information system for managers
- Intelligence information system
- Decision support system
Logistics Management Information System is an information system that is integrated between humans and computers. Functions in inventory management in order to provide information for analysis, planning, operations, and control. In supporting management decision making in an organization.
RedERP, like an ERP system, makes it easy to manage business operations automatically and in an integrated way, from accounting. Procurement, inventory, and distribution systems to customers and sales management.