Logistical management of inventory

Logistics management is the process of dealing with the whole order from start to finish.

A logistics manager responsibility is to ensure all stock is stored and distributed correctly.

When a business looks at the logistical management of inventory, they need to consider many different aspects.

Method of transport

The business will need to decide on the best way to transport goods eg:

  • air
  • road
  • sea

Logistics management:

  • looks at the goods being transported
  • looks at where they are being transported
  • decides the most secure and cost-effective way to transport them
Containers loaded on to a cargo ship
A business might decide to transport goods via sea with a cargo ship

Channels of distribution

Understanding and organising the most effective channel of distribution e.g. manufacturer to retailer to customer is important to a business's efficiency and profit.

External factors

Logistics need to consider external factors that may affect the movement and storage of inventory.

Legislations can influence the delivery of goods. For example, the amount of times lorry drivers are allowed to drive without having a break is stipulated by legislation, this will affect delivery times

Finance

The budget that a business has for storage and delivery of inventory can affect the choices that are made by the logistics manager

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