EDUCATION 101: Logistics Management

Principles of Purchasing and Supply Management


Logistics Management

Logistics Management has been defined as;

Definition 1

The total management of the key operational functions in the supply chain- procurement, production and distribution. Procurement includes purchasing and product development. The production function includes manufacturing and assembling. While the distribution function involves warehousing, inventory, transport and delivery.

Definition 2

The process of strategically managing the acquisition, movement and storage of materials parts and finished inventory through the organization and its marketing channels in such a way that current and future profitability is maximized through the cost effective fulfillment of orders.

  • Logistics management is primarily concerned with the flows within an organization
  • The essence of logistics management lies in three important concepts of; the movement of goods, satisfactory customer service and reasonable costs. The important task of logistics management is to constantly facilitate the correct levels of customer service and to maintain the balance in terms of total logistics cost.
  • One of the important logistics concepts is total systems management, emphasizing a total rather than limited departmental viewpoint. Total systems management has been facilitated by the availability of information technology.
  • The Activities of logistical systems are summarized as;
  • Customer service
  • Demand forecasting
  • Inventory management
  • Logistics communications
  • Materials handling
  • Order processing
  • Packing
  • Parts and service support
  • Plant and warehousing site location
  • Procurement
  • Reverse logistics
  • Traffic and transportation



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