Retail, CPG and Logistics

The importance and benefits of logistics for businesses

Logistics is the backbone of the supply chain and, subsequently, the entire business. The logistics management system employed by a company can either make it or break it. The global logistics market value reached almost $9,525 billion in 2021, according to a report entitled Global Logistics Market Report and Forecast 2022–2027. The market is anticipated to continue expanding at a CAGR of 5.7% between 2022 and 2027, driven by developments in technologies, to reach a value of approximately $13,326 billion by 2027.

What is logistics?

Logistics is a component of the supply chain that involves the flow of commodities from one point to another, typically through warehousing and transportation. In other words, the processes involved in transferring items internally or from the seller to the customer are collectively referred to as logistics. Logistics generally considers expenditure, the weight of the goods, and transportation, as well as other elements such as client satisfaction and access to adequate warehousing.

Logistics managers must consistently supervise the process' numerous intricacies and closely monitor several details. For example, transportation routes must be chosen based on convenience and efficiency, regulatory frameworks, and the minimisation of concerns such as road construction and repairs, armed conflicts, and inclement weather conditions. It is also important to carefully assess freight companies, packaging solutions, and their corresponding expenses.

The importance and advantages of logistics

Logistical solutions vary depending on the nature of the business and its product decisions, but the process is always complex. Not having competent logistics will dent a company’s bottom line. It can be crippling to the entire supply chain because, without proper logistics, there would be no movement of cash from customers to sellers.

Logistics primarily focuses on the movement of goods across various channels, but its implications stretch much further. In business, success in logistics translates to increased efficiencies, reduced costs, enhanced production rates, improved inventory management, efficient use of warehouses, higher client and vendor satisfaction, and better customer experiences. Companies that invest in an elaborate logistics management system enjoy the following benefits.

  • Real-time insights: Efficient logistics solutions offer greater transparency and real-time insights that businesses can effectively utilise to make informed decisions. By studying the output data and insights from logistics, organisations can identify supply chain issues and boost productivity by streamlining interactions. End-to-end supply chain visibility encourages growth and fosters the formation of beneficial partnerships between companies.
  • Scalability: Effective logistics management paves the way for business expansion. It determines the quantity of inventory needed and helps businesses in developing a strategy to meet the increasing client expectations. Therefore, logistics offers flexible solutions intended to assure scalability and efficiency.
  • Cost-effectiveness: By automating and streamlining processes, logistics management can significantly slash administrative costs. It can regulate inventory levels and execute a powerful plan to assess demand and supply to ensure that companies do not spend on unnecessary logistics supplies. Additionally, logistics management can be applied to preventative maintenance to save money. Moreover, it simplifies all operations to encourage organised movement during transit.
  • Risk management: Given the dynamic nature of today's markets, unwanted logistics disruptions might negatively impact businesses. A comprehensive logistics framework can efficiently foresee interruptions and prevent them by using a risk management plan. Therefore, it is essential to have a fleet management system that forecasts demand and supply.

The benefits of logistics outsourcing

By outsourcing logistics management to an organisation that utilises the right technology, processes, and subject expertise, companies can better understand their challenges and drive real business value. Some benefits of logistics outsourcing include:

  • Establishing strategies from the outset with a framework for addressing business issues
  • Developing a shared services model that spans geographical boundaries
  • Monitoring and controlling difficult, multi-faceted transitions
  • Guaranteeing a higher standard of delivery
  • Supplying a diversified workforce with the skills necessary to meet business needs

For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like living organisms will be imperative for business excellence. A comprehensive yet modular suite of services is doing precisely that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.

How Infosys BPM can help?

Our logistics process outsourcing are powered by industry-grade tools to redefine your organisation’s operational processes. We provide cross-functional solutions through our experience in retail, consumer packaged goods, and logistics.

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