The Procurement Glossary » Logistics

Logistics

Inventory & Logistics

Definition

The management of the movement and storage of goods — transport, warehousing, handling and delivery.

Explanation

Logistics gets the right goods to the right place at the right time and cost. It covers inbound (supplier to buyer) and outbound flows, and its cost and reliability are major factors in supplier selection and total cost.

Example

The logistics team consolidates inbound deliveries into weekly milk-runs to cut freight cost.

Related terms

• Supply Chain — The end-to-end network of organisations, people, activities and resources that move a product from raw material to end customer.
• Freight — The transport of goods and the charge for that transport.
• Third-Party Logistics (3PL) — Outsourcing logistics activities — warehousing, transport, fulfilment — to a specialist provider.
• Incoterms — Standard international trade terms defining who is responsible for shipping, insurance, duties and risk at each point of a delivery.

Frequently Asked Questions

What is Logistics?

The management of the movement and storage of goods — transport, warehousing, handling and delivery. Logistics gets the right goods to the right place at the right time and cost. It covers inbound (supplier to buyer) and outbound flows, and its cost and reliability are major factors in supplier selection and total cost.

Can you give an example of Logistics?

The logistics team consolidates inbound deliveries into weekly milk-runs to cut freight cost.

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