Logistics refers to the management and movement of goods or services between their point of manufacture or origin and final consumption. It has become an increasingly scientific process involving the integration of information, inventory management, warehousing or storage, product packaging, materials handling and transportation. It may even involve aspects of security either in storage or transportation. Logistics businesses have developed to optimise the value of the supply chain and ensure that goods get to market in a timely and efficient manner.
The word 'logistics' is derived from the Greek 'logistiki' which means accounting and financial organisation. There is also a French derivation since the verb 'loger' has the meaning to lodge or quarter.
It is believed that the first examples or organised logistics started in the armed forces as they addressed the need to manage supplies to the front line fighting forces. Officers in the Byzantine, Roman and Greek armies were titled Logistikas and had responsibility for all supply distribution and financial matters.
Military history is littered with examples of how the science of logistics has developed. As probably the most crucial element of an armed forces ability to enter into conflict many of the supply chain management tools and techniques have been developed in a military environment. Striking the right balance between the supply of appropriate resources to a lean but efficient fighting force is the art of effective military logistics.
The application of logistics to the business world started in the 1950s as the global economies recovered from the ravages of World War II and consumer demand increased as disposable incomes increased. As such, the term logistics has taken on a more marketing based definition – that of getting the right goods to the right place and in the right condition for the right price and at the right time.
A key element in the development of modern logistics has been the establishment and use of effective warehousing solutions. Distribution with warehousing sited in key strategic locations has allowed the transportation element to focus on managing costs and delivery schedules to optimise deliveries. It has also spawned a number of specialist logistics companies , as well as warehouse providers OLogistics. Integrating all the physical aspects of the supply chain with the modern GPS and transport planning tools means that goods can be manufactured and held in appropriate warehousing with state of the art inventory management tools and stock picking technology used to optimise space and reduce costs.