April 20, 2022 | Lucy Bull
As consumers, we have become accustomed to getting almost anything we want by clicking a button and having our orders arrive the next day –sometimes on the same day.
But how many of us have stopped to think about how this happens? Or how many people are involved in the operation of getting our goods from their source to our doors?
The process of moving goods around the world is one we rarely think about unless it goes wrong. Let’s take a closer look at the people and process behind our weekend outfit, groceries, or last-minute birthday gift.
What even is the logistics process?
The term ‘logistics’ refers to the process of managing how resources are acquired, stored and transported or delivered to their final destinations. It is widely used throughout the business sector and typical denotes how goods are move through an organisation’s supply chain.
How does it work?
To make this happen, warehouses are required to store products in a location suitable to efficiently reach as much of the population in the shortest amount of time. Manufacturers of goods, and the third-party logistics (3PL) operators that are often employed to distribute the goods, tend to operate a ‘hub and spoke’ system. This is when goods are stored centrally in a large warehouse before being taken to a storage facility closer to major cities for ‘last mile’ delivery. Sometimes, goods will be delivered directly from one warehouse to their end destination.
Computers and automation play a key part in the A to B process, particularly where consumers order goods online. Ordering online will notify the seller’s system or ‘inventory’ and the process of ‘picking’ the products for delivery will start. While many companies still pick products by hand, more and more companies are beginning to use automated systems to pick the correct item from the shelves. After being picked, the items are packaged and sent out for delivery.
One of the last parts of the A to B process is order management, with the whole process usually ending with the retailer checking that the consumer is happy with their order. If the consumer is not happy and requires a refund, the system of reverse logistics or ‘returns’ begins.
How can some companies deliver items so quickly?
The likes of Amazon and other large online retailers enable their same day or next day delivery across the UK by ensuring they have enough warehouse coverage across the country to be close to almost any end destination. They also employ a large number of delivery drivers working in a regional area to efficiently deliver these items, with each driver often supplying hundreds of packages per day.
The next time you click ‘buy’ online, think of the millions of people that contribute to us receiving our new boots, vegetable pie or latest PlayStation console. From manufacturers creating the products, industrial property landlords providing space to store them, IT software developers creating the systems that manage our orders to the pickers, packers and drivers who deliver our items with a smile.
1 Investopedia: https://www.investopedia.com/terms/l/logistics.asp