Posted in Operations and Supply Chain Terms, Total Reads: 1697
Definition: Logistics Channel
Logistics Channel refers to a network that involves all the participants of supply chain engaged in functions like transportation, receiving, handling, warehousing, information sharing etc. An efficient logistic channel is pre-requisite for acquisition and retaining of customers as it helps companies to deliver their goods to their customers at right time in right condition. Increase in product variety has also led to need of improved logistic channel.
The various goals of logistics channel are as follows:
• Meeting customer service level
• Minimize cost
• Increased sales
• Building relationship for better logistics execution
Hence, for designing a logistics channel, customer needs are analyzed in order to fix channel objectives. The different kinds of constraints in setting up of channels are identified. Then, various alternatives of logistic channel are identified and evaluated.
There are many third party logistics companies that provide complete solution related to logistics channel. They partner with the suppliers and help them meeting their objectives at least cost. Suppliers also evaluate their logistics partners at regular interval.
A simple logistic channel can be viewed as follows: