Logistics Branches: From Production to Recycling
Logistics can be divided into a number of branches, each with its functions and specifics. The main branches are production, procurement, sales, and recovery logistics. These functional areas cover a wide range of activities such as packaging, transportation, inventory control, storage and distribution, materials handling, and order processing, to name a few.
Production logistics involves a wide range of processes, among which the execution, control, and planning of storage and transport for finished, semi-finished, spare, and purchased parts as well as operating, auxiliary, and raw materials. The goal is to ensure an efficient and smooth flow of shipments, thus reducing lead time.
At the most basic level, procurement logistics is focused on the sourcing and shipping of materials that are needed to produce goods. It encompasses activities related to the purchasing of operating and auxiliary supplies, replacement parts, and raw materials required for production processes. This part of the supply chain is also responsible for the organizing, storing, and transport of shipments to and from warehousing facilities. Procurement personnel is generally tasked with implementing purchasing strategies, communication with manufacturers, suppliers, and customers, following selection policies, and product sourcing.
At its core, sales logistics is about fulfilling of orders smoothly and optimally. This branch involves a number of activities, however, including tracking of shipments, ordering of inventory, forecasting demand, and more. In general, sales logistics covers all processes needed to ship products from manufacturing sites and warehousing facilities to retailers or end customers.
Also known as reverse logistics, this branch is involved in the transfer of goods from clients back to manufacturers and sellers. It can also involve activities where customers are responsible for the resale, refurbishing, or recycling of a product. Ultimately, the goal is to either dispose of a product or regain value.
Recovery logistics also focuses on the reuse of products through reconditioning, refurbishing, and remanufacturing. Businesses often recover reusable and interchangeable materials and parts, which is referred to as cannibalization of parts. When it comes to reconditioning, this is the process of dismantling, cleaning, and assembling of finished products.
Across branches, logistics encompasses a broad array of activities, including:
- Demand forecasting
- Inventory management
- Warehousing (storing, retrieval, care, and packaging of goods)
- Control and monitoring of all processes
- Transportation management
- Material handling
- Order processing
Order processing, for example, involves a number of steps such as inquiring about availability, planning in case of shortage, reviewing delivery schedules, payment methods, prices, and negotiated terms, etc. Material handling facilitates order processing in that it allows for the quick handling of inventory to ensure that orders are fulfilled accurately and efficiently. Finally, warehousing encompasses a wide array of activities such as picking products for shipment, production, and assembly, moving inventory between facilities and inside the warehouse, and putting inventory away. Warehousing also involves activities like packaging and grading, storage, dispatching and receiving items as well as safeguarding of goods.