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Logistics is as straightforward as it is
Getting a product or service from A to B is never
as simple as that.
Logistics management is intertwined with supply
chain management and together, they create complex networks of
logistical processes that serve customers.
Because logistics extends far beyond physical
distribution, there are multiple roles and functions of logistics.
There’s a bit of a controversy on how many functions of logistics
there are, depending on whether you’re grouping similar logistics
functions or not.
For the purposes of this guide, we’ll be talking
about 6 functions of logistics that reflect
its role in the supply chain.
Let’s dive in.
6 functions of logistics
All logistics operations, regardless of the size
of the organization they serve, fulfill certain roles that support
the movement of goods or services. Let’s see what those roles are
and how they all come together in a transportation management
The functions of logistics below come in
chronological order rather than in order of importance to logistics
management. Therefore, transportation and the actual movement of
goods come last on the list.
Any delivery process can only function if there is
an order processing system in place. Order processing systems vary
from business to business – from a Shopify store to an ERP. Either
way, it’s meant to support fast and effective information
processing that kick-starts transportation activities.
The key part of order processing in logistics
management is integration.
Customer-facing solutions, whatever they are, need
to be in perfect sync with the transportation management
system (TMS) to make sure the delivery of goods occurs at the right
time and meets customer
Setups for processing orders
Here’s what order processing can look like,
depending on the complexity of the logistics operation.
- Single-click integration for eCommerce (e.g. a WooCommerce
store that integrates with a TMS for instant order import).
- CRM and delivery management system integration via Appy Pie
Connect or Zapier.
- ERP and TMS integration via API – requires more time and
Whatever the setup, the processing of orders sets
the tone for the whole of transportation management: warehousing,
distribution, customer service, shipment analytics, and the
Pro tip: set up a
Zapier integration to connect any order input system (even Google
Sheets) with delivery software.
2. Inventory management
Inventory control is among the logistics functions
that are often grouped together under the inventory/warehousing
umbrella. For the purposes of this guide, we separate inventory and
warehouse management processes.
Inventory refers to stocking finished goods in a
storage facility. In order to support the transportation and
delivery processes, inventory control requires information for
maintaining inventory records, ensuring
safety, predicting demand for goods, and, of course, reordering
Inventory logistics remains on the borderline
between inbound and outbound logistics, as it involves both
supplier relationship management (inbound logistics) and order
fulfillment (outbound logistics).
Therefore, inventory management is an important
part of supply chain management and needs to be used efficiently.
This means careful, data-driven assortment planning and timely
Warehouse management is a natural extension of
inventory activities. While inventory covers all locations and,
hence, all inventory for order fulfillment, warehousing is limited
to tracking stock movement within a warehouse.
At the warehouse level, handling, packing, and
shipping workflows are established.
Both inventory and warehousing require
sophisticated tools that support the main functions and help reduce
costs via automation. Especially if your company delivers from
multiple warehouses and needs complex logistical solutions.
One of the biggest trends in order fulfillment in
2023 will be micro warehousing and micro fulfillment. By
strategically placing inventory in small warehouses located in
densely populated areas, retailers are planning to cut
transportation costs and encourage more pickups.
Because automated routing and route optimization
can be done with unlimited departure locations, micro fulfillment
can be very cost-efficient. You can nail warehousing
transportation activities and delight your customers with
Packaging includes all the activities and
operations implemented to prepare goods for handling and
transportation to and from customers – in case of reverse logistics
and returns specifically. Packaging is one major logistic function
as it determines delivery success.
First and foremost, packaging needs to be
compliant with safety and any customs regulations that may halt
your delivery service.
Moreover, it’s important that packaging matches
your storage and vehicle needs, as well as meets the demand for
sustainable materials and other green logistics aspects.
Cargo handling is one of the major logistics
activities that can’t be overlooked when discussing logistics
functions. It’s closely related to packaging and determines
logistical costs in a very real way.
Getting the package and handling procedures right
is the foundation of physical distribution. It’s equally important
for safe storage and transportation.
No consumer enjoys damaged products or the wrong
product delivered to their door.
No company wants ever-rising shipping costs
because couriers have to make many trips to one customer to get the
Tips for cutting handling costs
There are many things you can do to improve the
cargo handling function of logistics and significantly reduce your
QR or barcode scanning is a cost-efficient way to
improve your delivery success. By implementing Track-POD’s free
barcode scanner app, you give your couriers the tools to scan all
goods within one load to make sure they’re heading for the right
Route optimization and fleet optimization both
serve the purpose of reducing your cost per delivery by maximizing
your logistical resources.
For example, by collecting all information on your
fleet capacity and drivers’ working hours, Track-POD’s route
optimization algorithm creates the fastest, cheapest routes with no
vehicle storage wasted.
Contactless delivery is a way to minimize cost per
delivery and improve customer service at the same time.
By making an upgrade to a contactless & paperless
system, you meet the demand for no-contact deliveries while also
solving a major logistic challenge of catching your customer at
their place of residence at the designated time.
Last but not least is the transportation itself.
Naturally, transportation is among the main logistics functions, if
not the main.
It’s required at every step of every supply chain
and the way companies build their transportation management system
and functions determines the success of supply chain
We’ve already talked about many important aspects
of logistics activities. From storage and warehouse to material
handling and fleet optimization. Let’s review more logistics
activities that help companies improve their customer service and
up the rate of successful deliveries.
Route optimization with ETA
Route optimization is automated and supercharged
route planning that makes the most of your fleet and driver
Estimated time of arrival (ETA) is available as a
dynamic time for the dispatcher at the back office and as a fixed
time for the customer, which means they’re more likely to be at
home on time.
Customer notifications and live tracking
Live vehicle tracking and delivery notifications
are important for the consumer to be at the center of the
transportation process, which greatly improves customer service –
not to mention your dispatchers can see real-time locations of all
drivers en route at all times.
Proof of Delivery
Proof of Delivery (POD) is a document generated by
your delivery management system as soon as the product or products
have been delivered from the warehouse to the customer at home.
With a system like Track-POD, you can have your
customers receive a custom POD right after the products have been
left at their door. Your drivers can also collect electronic
signatures and take photos, which also become a part of POD.
Shippers portal, i.e. a place where your regular
customers can log in to add, track, and
manage their orders independently, is an invaluable part
of any supply chain management process.
Track-POD has a Customer Portal for shippers to
log in and help you fulfill your logistics functions.
There are many logistics activities because there
are different logistics functions. They all support information
processing, storage in different warehouses, product and material
handling, customer service, and a lot of other things involved in
I hope this blog post gives you an overview of the
role logistics plays in supply chain management, as well as the
respective functions it fulfills.
If you’re interested in any of the logistical and
business solutions reviewed above, try Track-POD for free or book a
demo to see our cost-efficient transportation management system in
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