The definition of logistics
Logistics can be defined from different perspectives. Internationally, the definition most commonly adopted is that of the Council of Logistics Management of the United States:
"Logistics is the process of planning, implementing, and controlling the efficient and effective flow and storage of goods, services, and related information from the point of origin to the point of consumption to meet the needs of consumers."
Logistics includes two aspects: efficiency (Efficient) and effectiveness (Effective). The ultimate goal of logistics management is to meet the needs of customers and the goals of enterprises.
From the definition of logistics, it can be known that logistics management includes a series of activities. It can include transportation, warehousing, packaging, material handling, inventory control, order processing, demand forecasting, production planning, procurement, customer service, factory and warehouse location selection, item recycling, parts and service support, and waste disposal. Enterprises may not completely include some of the above activities under the logistics department. For example, enterprises that emphasize finished product logistics may not include procurement in the logistics department. In general, with the increasing attention to logistics, the scope included in logistics management is also constantly increasing.
The seven "rights" (7R) is a popular expression of the logistics concept.
In the West, logistics (Logistics) originally referred to military logistics. After World War II, the concept of logistics was applied in the economic field. Simply put, logistics is about obtaining the required items at the designated place at the required time. It can be expressed by seven rights (7R): right product, right quantity, right condition, right place, right time, right customer, and right cost.
The seven rights point out the basic activities of logistics, emphasizing the importance of space and time, as well as the importance of cost and service. When changes occur in the logistics system, logistics managers should continuously evaluate the appropriateness of cost and service levels.