The 5 elements of logistics

Markets are moving toward ever faster and more efficient product distribution, and a deep understanding of the logistics sector is now essential for anyone who owns a business and for anyone who wants a complete understanding of the supply chain. E-commerce, in particular, has transformed modern logistics, and placed unprecedented emphasis on package delivery.

Logistics can simply be defined as the movement of goods. It can be divided into 5 essential components that work in coordination to ensure that the supply chain functions. In this article, we will look at what these 5 elements consist of.

1. Warehousing

In a perfect world, every item leaving a factory would be immediately purchased by a consumer, and no consumer would ever want anything that was not just about to arrive on the store shelf. That is, there would be no items waiting, or demand to be met. That world is not ours, and warehouses are needed to bridge the gap between the rates at which producers work and consumers buy.

A warehouse is simply a physical space where stock is stored, but the issue becomes more complicated than that: in today's competitive and specialized world, a great deal of technology, strategy and attention is devoted to warehouses, with the aim of achieving greater efficiency.

Warehouse processes involve ensuring that items received are the right type and are not defective, that they are not damaged during storage, and that they can be found and removed quickly.

2. Packaging

Packaging is an essential part of product care and a necessary condition for good storage. Unitization, which is the consolidation of volumes into a larger unit to make transportation and storage easier, is also included here.

All logistics strategies are in vain if products are damaged due to insufficient or inadequate packaging. However, excessive packaging can increase transportation costs, due to the additional weight and size, and the cost of the material itself, in addition to environmental costs.

Packaging is also an important component of brand image.

For all these reasons, packaging issues have received a great deal of attention from companies. See in this other article our recommendations for packaging in your company.

3. Inventory

Inventory, or stock, is the set of products stored. Inventory management consists of strategically deciding what quantity of products to keep in stock, and which ones, and where. Since warehouse space and resources are always limited, it is necessary to try to understand the best way to use them.

As it is not an exact science, it consists largely of using various analysis tools to make forecasts about sales, and tends to be all the more important the more diverse and voluminous the product is: for example, for a store that only sells one type of item, which has a very long shelf life, it is significantly easier to organize inventory.

4. Transportation

This is perhaps the element that first springs to mind when we think of logistics. It is the physical movement of the product from origin, through all intermediate stages, to its destination with the consumer. It can include any means of transport, from the large ships that carry goods between continents, to the vehicles that handle local distribution or “last mile” delivery.

Transportation is one of the most important factors for e-commerce stores, and the public has increasingly high expectations regarding the quality of delivery service. For this reason, a reliable logistics partner is essential in e-commerce.

InPost specializes in providing an efficient, sustainable and economical package delivery service through a vast network of pickup points – more than 11 000 in the Iberian Peninsula. Visit our website to find out more about how a partnership with InPost can benefit your business.

5. Information

It is not only physical goods that have to move along the chain, but also the communication of information: the coordination of each process, when to arrive and depart, how and where to store, where the transport vehicles are, which documents are needed, etc. Just like with products, the transfer of information needs to be well thought out, simple and efficient.

Of course, these considerations may not apply only to the company's internal processes: one example of the role of information in modern logistics is the ability for both stores and customers to track the location of the order. This feature is extremely important in e-commerce, contributing to the transparency of the process. To track an InPost order, go to our tracking page.