For anyone who has never worked for a company that is product-oriented, it can be confusing to understand the meaning of transport and logistics and how the functions are inter-related in terms of order fulfillment. Logistics in itself is simply the process of moving goods from one location to another; therefore the process of shipping goods involves both transport and logistics. Logistics alone might entail moving goods around in a warehouse or moving supplies from the warehouse to the work area. While none of these moves involves freight shipping, they are still part of the logistics function.
On the other hand when a company ships products from its warehouse to a customer, the move involves both transport and logistics because goods are being moved from the warehouse and transported to a customer. It doesn’t matter whether the process is completed through in house freight shipping or the company contracts a shipping company to handle the transportation of goods to the customer. The key point is that moving products from the warehouse to customers involves both transport and logistics functions. In addition to understanding the key points involved with transport and logistics, it is also important to understand the correlation between the two and how they form a part of the order fulfillment process as well.
The first step necessary within the scope of logistics management is completion of the customer’s order. When this is ready for reshipment it becomes part of the transport and logistics function even before the order is ready for in house freight shipping or the services of a transport company. The transport and logistics function begins with the completion of the order and doesn’t end until it arrives in the hands of the customer. Similarly, the order fulfillment process does not end until the customer has his order.
Within the functionality of logistics management logistics and transport are likely to be the most important functions. Unless a company is able to move the goods from the warehouse into the hands of either in house freight shipping personnel or a shipping company the sale to the customer is not complete. All parts of the logistics and transport functions must work together in order for the order fulfillment process to become complete. Contrary to what you may be thinking, order fulfillment does not stop when the customer’s order is ready for shipment; it ends when the customer receives delivery.