What Is Logistics?

Logistics can be classified as an enterprise planning framework for material management,

information, service and capital flows. Logistics when seen in the context of the modern
day prevalent work environment also includes information that is complex in nature
besides giving importance to all the communication and control system that are essential
for efficient working of the organization.

In the words of a layman, logistics can be defined as having the right type of product or
service at the right place, at the right time, for a right price and in the right condition.

Logistics has evolved as a common and well-known business concept because of the ever
increasing complexities of modern day business. The primary goal of logistics is to
effectively manage the project life cycles and resultant efficiency. This has greatly
evolved with a logistics manager's role in efficiently designing the products of the
company keeping in view the principle of efficient system of supply chain management.

In business terms, it can be summarized as a competitive strategy adapted by the

enterprise to meet and exceed the expectations of its existing and prospective customers.
It refers to a complete process of total supply chain management that is established to
achieve a state of perfection through efficiency and integration. Logistics does not mean a
single work activity but refers to a group of activities performed to attain the goal of a
business enterprise that is maximizing the Profits. This may involve steps like
purchasing, planning, coordination, transportation, warehousing, distribution and
customer service. A business can run without profits, but it needs money to fund its
services, pay its employees and grow its customer base. Logistics play an important part
in the present business world; it cannot be neglected by an enterprise focused on growth
and profitability.

Logistics is a mixture of several professional disciplines, such as: 1. Planning 2.

Controlling 3. Directing 4. Coordination 5. Forecasting 6. Warehousing and
transportation 7. Facility location 8. Inventory management

As per the Council of Logistics Management, logistics has been defined as the part of the
process of supply chain that plan, control and implement an effective and efficient flow
for the purpose of storage of goods and services and other related information from the
point of commencement to the point of final consumption with a aim to satisfy the
requirements of its existing and prospective customers.

All activities that are involved in the movement of goods and services from the point of
origin to the point of final consumption are grouped under the term 'logistics'. The art of
managing or supervising all these activities when grouped together as a collective unit,
are placed under 'logistics management'. People who are authorized or given the task of
managing the aspect of logistics management are referred to as 'distribution managers' or
'logistics managers'.
Logistic Terms:

In this article, we'll strive to define some commonly used logistics terms. Logistics has
evolved to a greater extent than ever thought possible and this has been attributed mainly
due to the modern and advanced business enterprises which have given the due attention
towards its development. Logistics can be defined as delivering products at the right time,
for a right price, at the right place and in the right condition. The role of a logistic
manager and logistic executive is to handle the various tasks related to logistics and to
assign responsibilities that pave the way for logistics to be recognized as an integral part
of any organization.

There are some terms which relate to the concept of Logistics and any aspirant who
wants to have a deep insight into the overall procedure of logistics must be aware of these
frequently used phrases.

Certificate of Origin: This refers to a certified document that is used in foreign

commerce with regard to the origin of goods. This document certifies that the products
which are ready to be exported have been manufactured in a specific geographical
location and country. This certificate is sent to the importer by exporter of the product.
This may be beneficial in claiming any concessions. This certificate needs to be signed by
the exporter of the product and needs to be certified by the local chamber of commerce.

Warehousing: This is the procedure of storing goods at a safe and clean place for the
purpose of safeguarding the goods and may involve keeping goods to be sold at later
stage. This can be described as a place or store where merchandise or products are kept. It
is done for safe keeping of goods, usually for sale at a later time.

Distribution: It refers to a process of the movement of people, services and resources to

the place of their consumption or where they are required. This usually involves storage,
transportation, issue and disposal of goods.

Transportation: Refers to the movement of supplies, goods, people and equipment by any
mode of transport such as rail, trolley, water or air. This is considered to be important
aspect of any organization as timely delivery of products ensures customer satisfaction
and brand name for organization. The mode of transportation may be dependent on
several factors like customer requirements and specifications, past experiences, speed and
geographical locations.

Consignor: He is a person who makes the shipment of goods for the purpose of delivering
the same by any mode of transport such as sea, trolley, land or air. Also known as shipper
or sender. He is usually liable for hiring the transportaion vehicle for the goods sent by
shipment to be delivered to the consignee. In a transaction based on credit, he has the
right to stop the goods in transit.
Logistics in India:

Logistics in India don't differ too markedly from logistics anywhere else in the world. It's
the the art and science of managing and controlling the flow of goods, products, services,
energy, information and people from the origin point to the destination point. It includes
the proper combination of several activities such as material handling, warehousing, and
information, for the purpose of ensuring supply of the right product, at the right time, at
the right place, for a right cost in the right condition.

In the past, India has been the student rather than the expert when it comes to the field of
logistics. But with its current expertise, valuable human resources and positive plans, it
surely is walking on the path of being a service provider of class. There are several
factors that benefit the Indian economy for reaching success in the field of logistics,
namely:

1. India is the fourth largest economy in the world. 2. It is believed that about one-
quarter of the youth population of the world resides in India. 3. India has human
resources that are high in knowledge and abilities. 4. It is the second-largest English
speaking workforce. 5. It has the 2nd largest pool of qualified technical workforce.

India spends 13 percent of its Gross Domestic Product (GDP) on logistics as opposed to
the usual practice of 10 percent by other developing nations. The Indian economy is
striving for improvements in the field of logistics and supply chain management to gain
the competitive edge in today's worldwide economy. The Indian government has favored
the logistics market of India by making some helpful plans and policies to assist in its
growth.

There are several events organized for the promotion of logistics in India which are
focused in their approach and relevant to the business solutions besides providing a solid
platform for allowing people from a wide industry spectrum to meet and provide business
within themselves from all over the country. This has been an emphatic source of
providing business solutions and their development.

Several global third party logistics providers (3PLs) have already started developing their
operations and service networks in India with a purpose to explore the rampant Indian
economy.

This has resulted in the creation of the need for a vast range of supply chain management
(SCM) and logistics solutions which cover several factors such as supply chain, logistics,
material handling, storage, Information technology (IT), warehousing and inventory
management. This has benefited the efficiency and productivity of the complete value
chain in several dimensions of profits, speed and customer service.

The Confederation of Indian Industry (CII) is the premier business organization with a
known commitment towards the development of logistics in India. It has established the
CII Institute Of Logistics which is a specialized state-of-the-art institute of excellence
with its focus on SCM and logistics. It is brought up to satisfy the latest industry needs
for specialized SCM and logistics.

India is being treated as the destination of the future in the field of logistical service
providers all over the globe. Indian logistical market players have started to gear up and
position themselves in the global scenario. The true potential of these service providers is
yet to be realized. India is keen to offer transportation and logistical service to grow itself
as an emerging marketplace. The key sectors include fashion, gems, jewelry,
pharmaceuticals, precision tools and engineering goods, all of which need special
shipping provisions.

Logistic Market :

The reduction of trade barriers, both on the domestic as well as international front, has
led to a rapid growth of the logistics market throughout the world. Items such as Swiss
cheese, Chinese gadgets and Italian fashion goods that were earlier limited only to the
place of manufacture have now crossed the geographical boundaries to take their place in
the international market. This has indeed globalized the area of operations and has
benefited several economies.

How that is made possible? Obviously, apart from favorable govermental policies, it is
the growth of logistics that has made all this possible. The boundaries have been
minimized due to advances in the modes of transportation. Logistics not only deals with
delivery of goods at the right time, for a right price, and in the right condition, but also
has extended its role in globalizing the sphere of products and services.

The global logistics sector has evolved and remained open to favorable changes during
the last 20 years. Nowadays the manufacturers do not feel reluctant in outsourcing and
adding considerable value to the functions performed by logistics much above the normal
functions of delivery, warehousing, storage and distribution of goods. Global logistics
management is considered to be highly integrated and therefore requires a thorough
knowledge of materials management, customs regulations, foreign exchange,
purchasing, supply-chain management, transportation and information technology. This
trend is quite visible throughout Americas and Europe and is slowly attaining its due
importance in Asia Pacific countries like China and India.

These days the logistics manager assumes one of the most important and complex jobs in
the organization. The profitability of a business, along with consistent levels of customer
satisfaction depends to a great deal on the skills of the logistics manager.

The growth is eminent in the Asia-Pacific region with China emerging as a global
economic power with a seismic effect on the global market of logistics. India is steadily
following China's footprints by consistent marching onto the field of logistics due to
favorable market trends, outsourcing and government policies. Developed nations like the
United Kingdom and the United States already have strong logistics policies and are keen
to outsource from China, India and Asia-Pacific due to the cost factor.

In the current business scenario, there are ample job opportunities for people in the field
of logistics and slowly and steadily the area and scope of logistics is on the upswing.
With the increase in demand for logistics professionals, logistics organizations are raising
their sphere of influence to unparalleled heights. The growth and development witnessed
in the logistics sector is likely to fuel further growth for many more years to come.

Thus it would be right to conclude that the logistics market finally has its due share with
ample job opportunities available and logistics being considered as an integral part of
most savvy organizations.