Council of Logistics Management defined that logistics is "part of the supply chain process that plans until implements and controls the efficient, effective forward and reverse flow and storage of goods - services and related information between the point of origin and the point of consumption in order to meet customers/requirements".
This very broad definition includes the full range of logistics activities such as customer service, demand forecasting, communication management, inventory management, material handling, order processing, location of factories and warehouses, supply, packaging, returns management, transport, warehousing and storage. These activities together with the input and output form the framework of the components of Logistics Management, that logistics management that can include all or some of these activities depending on whether it is more or less integrated.
The integration of the various areas of logistics is necessary for two reasons:
The choices made in a certain area of logistics activities have an impact on all other areas (trade-offs)
The potential inherent in logistics efficiency as all the activities that make up is extremely high
Logistics costs can be divided into 5 major groups:
Costs of maintaining stocks
Storage costs
Costs of transport and distribution
Costs related to lots
Costs of processing orders and information systems
The mission of logistics is to plan and coordinate all activities necessary to achieve the desired level of service at the lowest possible cost. Logistics must therefore be seen as the link between the market and operating environment of the company. The scope of logistics across the entire organization, from management of raw materials to finished product delivery.