What is Logistics – Meaning and importance of Logistics?
What is logistics? Logistics is a part of the Supply Chain that includes the following stages: Planning, Implementing and Controlling the flow of goods and services as well as information related to the flow.
Logistics services always appear from the first point to the final point of consumption to meet customer requirements. The stages from beginning to end of a basic Logistics chain are summarized as follows:
“What is logistics?” according to the Government of Vietnam
Vietnamese law also has the answer to the question “What is Logistics?” in Article 233 of the 2005 Commercial Code when stipulating that Logistics services are a Commercial Activity.
In this law, traders organize the implementation of one or more steps including: Receiving goods, Transporting, Storing, Storing, Representing customs procedures or other paperwork, directly or indirectly Consulting customers, participating in Packaging, Marking, Delivery or other services related to goods as agreed with customers to receive remuneration…
Up to now, there is no Vietnamese word that has enough meaning to replace “Logistics”, so logistics services are transliterated in Vietnamese as “logistics” services.
“What is logistics?” according to international organizations
As defined by CSCMP – Council of Logistics Management Professionals: Logistics Management is a part of Supply Chain Management. In particular, logistics management will aim at the efficiency of the chain of goods, services and information in both directions, from manufacturers to consumers and vice versa.
To do this, Logistics management professionals must Plan, Execute and Manage every activity from the first place to the last, with the ultimate goal of ensuring customer satisfaction.
Origin of the word “logistics”
According to the original Oxford dictionary, logistics “is a branch of military science, related to activities such as purchasing, maintaining and transporting materials, personnel and vehicles”.
The reason for this definition is because Logistics is believed by many to come from the French word “Logistique”, which first appeared in the book “The Art of War” by Baron Henri, a general under Napoleon.
Some other opinions say that “Logistics” comes from Greek, with two words “Logosh” – Reason and “Loyistikosh” – Accounting specializing in measurement.
Only later did the manufacturing and service industries begin to borrow Logistics and use the term “Business Logistics”, which was widely applied by the French army during World War II.
Therefore, we have a new definition of Logistics in the book “New Oxford American” as follows: “Logistics is the detailed organization and implementation of a series of complex activities.” or “The detailed coordination of a complex operation involving many people, facilities, or supplies.”
Meaning of Logistics in business
No matter how well a business focuses and invests in designing and producing products/services to meet customer needs, if those products/services do not reach customers in the right place and at the right time. point, the business will still fail.
That is the meaning and importance of logistics in the economy.
But that is just the tip of the iceberg, as defined from the beginning of the article, Logistics appears from beginning to end of a supply chain, therefore, materials are purchased, transported and stored until delivered. The more effectively it is used, the more profitable the business will be.
In addition, resource coordination to provide and promptly use available materials is also a “vital” factor.
On the customer side, if the product/service is produced on time but is not shipped on time, customer satisfaction will decrease, negatively impacting profits and long-term viability regardless of the product or service. any business.
