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What is Logistics?
Logistics is a delivery service aiming to transport goods to the destination smoothly by water transportation, air transportation, or motor transportation. It also includes warehouse management and packaging management. Logistics is a very important business because it is a part of supply chain management. It seems a simple work but goods transportation and delivery process in the real life need an investment, thus it requires a capability of management to transport goods efficiently at a low cost. Many entrepreneurs decide to use logistics service providers to be agent of their products delivery instead of doing logistics management by themselves.
Logistics Management
Below are 4 main factors of efficient logistics management.
1. Movement
Movement of goods is an important process and it requires the most effective management to let transporters work easily, utilize capacity of delivery trucks, and reduce damage which may occur.
2. Storage
This is to make a plan of keeping goods efficiently by gathering a few goods from several transportations and combine them to a bigger product or on the other hand, split a big product into many small products (break bulk). The more you have a good storage, the better you can reduce the storage cost.
3. Consolidation
Freight consolidation is a method to combine multiple shipments and multiple customers’ orders into the same truck. When receiving orders from customers, the transporter will pick up products from many sources and bring them to a distribution center, then arrange the delivery route and load products into a truck to deliver based on the routing plan.
4. Distribution
Product distribution is an activity needed to manage well enough in order to deliver the right product with the right quantity at the right time to the right place and by the right condition of the customer.
Why is logistics an interesting business?
Due to the growth of e-commerce business, many SMEs join the market while consumer behaviors are gradually changing to online shopping, that is why logistics service providers start joining and competing in the market. Anyway, in current business competition, it is not just only selling the product but it also needs to consider the service, the beauty of the packaging, and the delivery speed. Therefore, having a good logistics system can make a good impression for your customers.
Technology and services to be applied in logistics business
Routing Management
Routing management is a system to calculate number of products to load into a truck and create a routing plan for delivery process. It can help you to make full use of the truck’s capacity, save time and reduce the cost of unnecessary transportation, so you can deliver the products to final destination promptly.
GPS Tracking / Monitoring
The Global Positioning System (GPS) is a satellite navigation system for determining the ground position of vehicles, products, or persons by using a GPS tracker. The GPS calculates the position on the earth referring to the position of the satellite which is high accuracy, so it can determine position of vehicles, products, or persons. For this reason, you can create a routing plan and estimate the transportation time effectively.
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Fulfillment Service
Fulfillment service is a warehouse rental service providing product packing and delivering to the destination. This is a third party’s service using an online system to calculate and record your products, so you can track the status of the products and the delivery as you want. This service is suitable for online retailers who want to save time in warehouse management, packaging and delivery. It also helps those retailers to save labor cost.
Ultrafast delivery
This is a quick delivery service within one hour of Amazon.com Inc. Its warehouse is located in a building in the middle of New York, so it can provide fast delivery service to nearby cities. Amazon employees can find and pick what they are looking for quickly to package those items and pass to the couriers for delivery process. The couriers will deliver packages by the fastest transportation mode e.g. by foot, bicycle, public transportation or car. Finally, the customers can get the right products very quickly.
