Important functions of logistics industry in Indian Economy
The Indian economy has been on the boom for the last few years. To boost this growth the Logistics industry plays an important role, undoubtedly the logistics company is undoubtedly considered to be a very crucial sector. The logistics industry handles the export and import of the country and makes sure the demand and supply curve is evenly balanced.
Moreover, the logistics industry provides numerous employment opportunities and investments from foreign clients. The logistics industry decides the final prices of the commodities, therefore has a greater impact on inflation too. Though this industry was not that known or looked after a few years back and online government backed logistics company used to run the sector, but recently time has changed and many new private players have entered the market and now this sector is highly competitive and we can witness the innovative approaches coming into the picture to provide Logistics services in a more lucid way.
The function of logistics:-
1. Order management: Logistics services roles start with order management or order processing in which the logistics handles all the orders received and segments them according to their pickup and drop location. In more simple terms it includes filtering of the orders based on their locations.
2. Warehousing:- It is one of the most important functions of the logistics company, in this physical products are stored at one place so that the logistics cost of shipping gets reduced and we can have one point of contact for all sorts of deliveries.
3. Inventory management:- It is always important to maintain the demand and supply of your products and this is all done through inventory management. You would never want to have a short supply of your products as it will reduce your revenue and you would want to store excessive goods in your warehouse as it will enhance the holding cost and eventually the final price of your product. So logistics helps in inventory management so that you have the right amount of supply to match the demand.
4. Packaging:- After receiving the order , the next important step is to neatly and correctly pack the product which is to be shipped. Packaging should be aesthetic which appeals to the customer and packaging should contain all the necessary addons with the main product. Moreover the package should have the right labelled address so that the package doesn’t get misplaced while delivering.
5. Transportation:- After the package is packed next time is for delivery of the package to the right client. Logistics ensure the right package is delivered to the client too as early as possible.
6. Tracking: - Now the last step is to track the package which has been sent through the transporter. Logistics services end its role by tracking the package and getting the information about the whereabouts of the package transported earlier.
Warehouse logistics roles are within the warehouse of the company, all the operations taking place inside the warehouse come under the warehouse logistics, this involves receiving a physical product from the manufacturing unit, packaging of the product, inventory, and storage of the product inside the warehouse, sending the product to the clients through the transporter.
Benefits of Warehouse Logistics:-
1. Inventory management:- You would never want to have a short supply of your products as it will reduce your revenue and neither would you want to store excessive goods in your warehouse as it will enhance the holding cost and eventually the final price of your product. So the warehouse logistics helps in inventory management so that you have the right amount of supply to match the demand.
2. Auto order of replenished stocks:- Warehouse logistics estimates the date when the present stock will be sold out , therefore it orders the next batch beforehand so that there is no shortage of supply.
3. Less product returns:- Number of products returned also decreases because of warehouse logistics, because you have all the products and transportation under one roof so the error of sending the package to the wrong client gets reduced and there are comparatively less returns.
Drawbacks of warehouse logistics:-
1. Requires modern equipment which costs much more than the orthodox machines.
2. Requires more number of labour to run the warehouse successfully .
So overall the running cost of the business increases if we are having warehouse logistics , but on the other hand warehouse logistics definitely brings much more revenue.
Cold storage warehouse
FMCG and pharma industry sometimes require their products to be stored at such a temperature which is less than zero degree Celsius , so then cold storage warehouses come into the play. In these warehouses we can store products at deep freeze level so that the product doesn’t get damaged and its quality remains intact.
A warehouse which stores those products which have duty or VAT on them is called a bonded warehouse. These warehouses have dutiable goods and are under the supervision of the government of that country.
You may also read: How Do You Reduce Inventory Shrinkage?