You may know the term “logistics.” If you’re trying to run a business effectively, you may hear it more often than you’d like. It’s a broad concept that includes many smaller ones.
We’ll talk about logistics right now. We’ll make sure you understand this concept, and we’ll also run down how modern companies use logistics so they can get ahead of the competitors in their niche.
What Does Logistics Mean?
Logistics means the overall process of resource management. That might include how you acquire resources, transport them, or store them.
When we say “resources,” that could mean the raw materials that you use for product creation. It could mean the finished products themselves. Resources could also mean your workers, the trucks and planes you utilize for shipping, the drivers and pilots that operate those vehicles, etc.
When you think about logistics in this way, you can easily see why it’s such a broad concept. You can also see why some entities have created logistics software that can help companies keep track of all of these resources. If you have a huge company, and you try to deal with all the logistics yourself, you’ll drive yourself crazy within a day.
You probably need a whole crew working on your company’s logistics. The software that we mentioned can also help.
Logistics Can Either Help or Hurt Your Business
If you can anticipate logistical issues, then you can usually alleviate any logistics-related problems that arise. You can go to a backup or contingency plan with little difficulty.
On the other hand, if you don’t have backup plans in place, logistical issues can sink your company. That’s not hyperbole.
For instance, maybe you have just one supplier you use. If that supplier does not have the raw materials you need to make your products, then your whole supply chain and operation will ground to a halt if they say they can’t supply you with that raw material for a few days, or perhaps much longer. If you have multiple suppliers instead of one, though, you can likely go with another one while your primary one figures out a workable solution.
Many families and individuals struggled during the pandemic, and many businesses did too. However, the pandemic taught many companies valuable lessons as well. That lesson came too late for the ones that closed, but those that stayed open learned how logistics could either help or hurt in unexpected situations.
Think about the scenario we just described, with a company using a single entity for some essential raw material that they use. The pandemic caused many supply chain disruptions. Companies that didn’t have contingency plans inevitably closed during 2020 and 2021.
Disruption occurred on a global scale. That’s why some grocery store shelves stayed empty. Stores could get certain goods, while they could barely find others.
You likely saw toilet paper and paper towel shortages. In some parts of the country, families couldn’t easily find some food items, like eggs or bread.
The pandemic taught companies that didn’t have contingency plans for logistical problems that they couldn’t stay open that way. The ones that planned ahead largely stayed open and even thrived.
How Your Company Should Make Logistics-Related Plans
As you continue running a company, you can keep bringing in more raw data concerning your customers, their likes and dislikes, how you can get them your products, how much your production methods cost, and much more. The logistics concept covers all of that.
The logistics software suites that exist now usually have AI behind them. The AI can often predict supply chain issues and worker shortages before they happen.
Because of this, it can suggest backup or alternate production means. Those might involve using several suppliers for your raw materials. They may include using international production means if local ones have too many risk factors.
If you use logistics and always have plans in place, you can control your real-time product creation, your transportation, how you stock store shelves, and so forth. You can closely monitor your assets, but you can also make adjustments as necessary if you run into any challenges or difficulties.
Those inevitably happen in the business world, so having backup plans in place can really help you sometimes.
Hiring the Right People
To use logistics correctly, you need two things. We’ve already talked about an AI-infused analytic software suite.
It can monitor your raw materials, the products coming off your assembly lines, the ones in your warehouses awaiting shipping, the ones on store shelves, etc. You also need the right employees who can help in all of these areas.
If you have clerks and shipping managers who can help monitor your products and your entire supply chain, they can work along with the logistics software. They can use it, and it can help them, but they can also accept or discard any of its suggestions.
As many amazing software features as you’ll notice, you still need real human beings throughout the company who can make practical decisions. AI has its uses, but it’s still artificial and not actual intelligence.
That combination almost guarantees you’ll do well. The right analytics suite and the best workers can help your company stay afloat during tough moments and thrive the rest of the time.
Some business owners cringe when they hear the word “logistics,” but that’s not necessary. As long as you understand what it means and how to control it, you can dictate whether it’s an asset or a liability.
Shop around and look at the different analytics software suites that you might implement. Different ones have various features, some of which you might need and others that you can probably discard.
You can also talk about logistics when you do your hiring. If you have an open shipping manager position or some other critical spot within the company, ensure you get a worker who knows this niche and can function within it.