The modern economy relies on the efficient transportation and movement of goods and services between countries, individuals, and entities. Such movements and exchanges heavily rely on having efficient systems in place to accomplish them. For example, shipping from the US to a Canada address is now much easier thanks to such systems.
This system, and every component that supports its smooth running, is at the heart of logistics. Without it, modern commerce may well resort to utilizing primitive methods of moving goods and services. Its evolution has been crucial to the growth of numerous business sectors. An understanding of the basics of logistics is necessary to appreciate how far it has come.
Logistics: A Critical Modern Infrastructure
Logistics is the general term used to refer to how resources are acquired and moved between locations. Originally coined by the military, this term is now widely used in business circles. Given the way modern commerce has boomed over the past few decades, logistics is now a critical part of any business. Its importance now rivals that of other business components like budgeting.
Elements of Logistics
The key elements of logistics include;
- i) Storage: One of the drawbacks of modern manufacturing is that a lot of goods are produced within a short time. This is a problem because consumers do not demand goods at the same rate at which they are produced. That’s why storage is a key component of logistics, helping to ensure that goods are properly stored as they await demand.
- ii) Packaging: Packaging helps to ensure the efficient transportation of goods from one location to another. A crucial subset of packaging is unitization– a system that aims to package products into units that can easily be backed in uniformity, thereby conserving storage space.
iii) Inventory: This element of logistics is concerned with the amount of stock held at any particular time. Inventory dictates how much goods to hold, the specific types, where to hold such goods, etc. It’s a crucial management tool.
- iv) Transport: The goods in stock need to be moved from one location to another, having been stored and inventoried. It needs to account for the best mode of transportation for particular kinds of goods.
- v) Information: Information is crucial for the control of all the other elements of logistics. It ensures their proper coordination, helping to identify weak links involving each element that can be addressed for better efficiency.
The evolution of logistics involves tweaking any of these elements (or all) in one way or another.
Evolution of Logistics
Technological advances continue to make business transactions and commerce easier by the day. Among the many beneficiaries of such advances is the field of logistics; technology helps to optimize its different elements.
The idea is to optimize the different elements of logistics to a point where maximum efficiency is realized.
A good example involves application programming interfaces (APIs). These are computer programs designed to communicate with one another using specific instructions. APIs have a wide range of applications in daily life. For instance, the stock exchange contains crucial data about stock prices at any particular moment. The stock application on a device like a phone or a laptop can “communicate” with the exchange via an API to provide real-time updates on such devices.
Introducing APIs into operations to optimize logistics is proving to be a game-changer for many businesses.
The key aspect of logistics involves the movement of goods. You need to locate and schedule carrier movements, and send notifications to customers, among other things. For small businesses, this isn’t an issue. They can handle small volumes of goods relatively efficiently. However, running this setup becomes a bit cumbersome for large operations.
That’s where APIs come in handy.
By utilizing an API platform, a business can make its operations more efficient when handling logistics. In the above example, it means that software can help to coordinate many of these operations. For example, it can coordinate inventory, loading of goods onto ships, customer notification, delivery schedules, etc. This is one way in which an API allows for better streamlining and organization of logistics.
Many companies now experiment using API platforms for better running of things. Some are better than others, utilizing such innovative methods for expanding their logistics capabilities. Of course, it may not always work smoothly for all companies. The idea is to experiment until a reliable system is developed.
Collaboration can also be another way of experimenting with systems that help to make logistics more efficient. A good example involves a company offering digital logistics services partnering with another that offers digital freight services. Given that both are in the business of helping facilitate the shipping of goods, such a collaboration can be very beneficial for both companies (and their customers) once they can address specific customer pain points.
Ultimately, thinking of new ways to improve the logistics process and implementing them requires thinking outside the box as far as viewing the different elements of logistics. This is one of the best ways to experiment and optimize logistics.
