Image via Wikipedia
Is supply chain logistics really that important to the success of a company? Before you try to answer that, it is important for you to consider the function of supply chain logistics, namely that of distributing products from one place to another.
It might be the company’s own staff making the distribution or a fulfillment company may perform the function. No matter who performs the function it is essential to the success of the company. Without a way to distribute goods from the producing company to the customers there would be no need for either to exist.
That may bring up another question: why can’t the customer simply arrange for the goods to be delivered to their location as soon as they are ready to leave the production line? Would that eliminate the problem of supply chain logistics within the company? While that may sound like a feasible solution, here is the other end of the scenario: the customer of the company receiving the goods may not be ready to receive them!
While it may sometimes we true that the customer receiving the goods will immediately use them, this is not always the case. Remember for a moment that the producer of the goods may be selling those finished products to a retail chain such as a drugstore, grocery store, or retail chain. Instead of immediately delivering the products to their locations, they will store them in a central warehouse–or maybe several warehouses throughout the country–until their stores are ready for the products.
Supply chain logistics whether internal or outsourced is a very important part of the success of any company. The profitability of a company depends on how many products leave the production area which is directly related to supply chain logistics. Even if your company is service-oriented, you will need products to provide those services and a place to store inventory of parts and tools–supply chain logistics functionality again. There is nothing within the world of business that is not dominated in some way by the need for reliable inventory management and supply chain logistics.
In reality no company can survive without some kind of supply chain logistics being involved. Whether it is because you are shipping products to your customers or receiving incoming shipments supply chain logistics plays an integral role. Without supply chain logistics there would be no distribution of products between locations.