Logistics is a technical solution to meet the demand for goods at an affordable price. In an increasingly connected world, logistics is a key piece in the value chain. Without it, it wouldn’t be possible to exchange products globally.
What is logistics, and what does it do?
Logistics is the activity that plans, manages, and monitors the storage and shipment of goods in a supply chain. Its main objective is to manage all operations related to moving raw materials or products in the most efficient way possible.
When the logistics process takes place leading to a warehouse, it is called a supply channel, such as when an e-commerce store supplies products that it expects to sell; when it leaves the warehouse to go out to homes, for instance, it is then called a distribution channel.
How does logistics work?
As a key activity, logistics strives to make sure that these objects are located in a certain place on a certain date, and under certain quality conditions. To do this, it makes use of all kinds of instruments:
- the roadway infrastructure of trade routes, such as roads, railways, bridges, ports, canals, etc;
- tracking tools like barcodes, RFID, GPS, etc;
- digital processes for information analysis to optimize routes, like big data, machine learning, and artificial intelligence.
With the right combination of all these elements, logistics can find the fastest and/or most efficient routes.
Last mile: the logistics challenge
Delivering goods in the last mile both for individuals and companies is the most complex, expensive connection for logistics operators. It also has a high impact compared to the rest of logistics. Scheduling delivery times and making use of lockers or alternative delivery points is helping in this regard.