Traditionally, manufacturing organizations used to have their in-house logistics departments taking care of all aspects of logistics from the source of raw materials to the delivery of finished products to the customer. But logistics is not the area of core competency of manufacturing or trading organizations. Hence, this job needs to be handed over to somebody whose core competency is logistics, and that individual can do the job with effectiveness and efficiency due to his/her expertise with a cost less than that of the competition. Today, successful business corporations across the world are outsourcing logistics to third party logistics service providers, who have the necessary infrastructure and expertise to do the job in a cost-effective manner. They provide complete logistics solutions to the manufacturers and traders for integrating various operations of logistics for a speedy and uniform movement of material across the supply chain.
There are some organizations from the transportation segment offering timely freight services across the length of the country. The other segment is warehouse service providers. The clearing and forwarding agents have the expertise in handling export and import cargo and customs formalities. All these segments have their expertise in their individual areas of operation, but lack the ability to deliver a holistic solution. The task of integrating these various arms of logistics to provide a comprehensive service from a single window is known as logistics solution. The solution may be customized for products, pickup, and delivery locations; volumes to be handled; and formalities to be completed. A single unit, which can handle all the logistics segments in a seamless fashion to provide a hassle free logistics service to the clients, can provide a complete logistics solution.
Today, logistics is widely used in virtually every area and can form the basis for a domestic kitchen inventory on one extreme to complex activities in manufacturing a luxury car within a prescribed time frame with stipulated specifications on the other. The success of a logistics serviceproviding company depends on the conceptualization and implementation of logistics solutions, tuning to the needs of the customer.
Source: Sople V.V (2013), Logistics Management, Pearson Education India; Third edition.
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