The Definition of Logistics

The Council of Logistics Management (1992) defined die logistics as the process of planning, implementing and controlling the efficient, cost - effective flow and storage of raw materials, in - process inventory, finished goods and related information from point of origin to point of consumption for the purpose of conforming to die customer needs.

In practice, the terms "logistics" and "supply chain management" are now used interchangeably, so the Institute of Logistics (1998) can give the following definitions:

Logistics is the time related positioning of resource or the strategic management of the total supply -chain. The supply - chain is a sequence of events intended to satisfy a customer. It can include procurement, manufacture, distribution, and waste disposal, together with associated transport, storage and information technology.

Included within the definition of logistics are customer service, traffic and transportation, ware­housing and storage, plant and warehouse site selection, inventory control, order processing, distribution communications, procurement, material handling, parts and service support, salvage and scrap disposal, packaging, return goods handling, and demand forecasting.

Efficient management of die flow of goods from point- of -origin to point-of-consumption at the macro society or micro firm levels requires successfully planning, implementing, and controlling a multitude of logistics activities. The activities may involve raw materials (subassemblies, manufactured parts, packing materials, basic commodities), in - process inventory (product partially completed and not yet ready for sale), and finished goods (completed products ready for sale to intermediate or final customers). Effective logistics management enhances die marketing effort of die firm (which can create differential advantage in the marketplace), me efficient movement of products to customers, and time and place utility of products. It can be treated, in accounting terms, as a proprietary asset of the company.