Mastering the Art of Logistics: What You Need to Know

To master the art of logistics, you need to have everything in place – almost as if you were the maestro and you are carefully conducting all the moving pieces to the same final and productive outcome. Continue reading to learn about the essential components involved in logistics.

What are the essential components of logistics?

There are seven core principles of logistics, more commonly referred to as the 7 Rs. They incorporate a myriad of efforts involving strategic planning and exacting execution of plans. It encompasses a skill set that is honed through practice and is heavy on communication, problem-solving, networking, and organisation. When all of these components come together, the magic of a purchase occurs, and all the hard work and dedication that went into it is worth it.

Here are the 7 Rs in concise form.

1. Right Product – The entire process begins with the product. This product must be the correct one. It needs to be the exact product produced with predetermined parts and materials as agreed upon and advertised. To illustrate, if you are supplying a vendor with parts, such as needle bearing rollers for their assembly line, you need to deliver the right product as ordered. Anything less may constitute a breach of contract and become a significant detriment to your company’s reputation.

2. Right Quantity – Knowing the exact quantity that has been ordered by your vendors and then producing that amount will ensure you are not wasting production time or resources. Additionally, you can avoid unnecessarily storing excess products and dealing with inventorying the items into your system. 

3. Right Condition – Whoever is on the receiving end of your products expects everything to arrive as agreed upon, as expected, and in perfect condition. Anything less is unacceptable per the terms of your agreement. Every step in the process can have a direct effect on the outcome of the product’s arrival.

4. Right Place – The right place equates to the exact location where the goods are to be delivered per the agreement. The final destination is the only right place for delivery of goods.

5. Right Time – Every delivery must be on time every time an order is placed. This ensures your customer can satisfy their customers, in turn. Or if this is the product’s final destination, your customer is content with the outcome of their purchase because all factors of the agreement have been satisfied. This guarantee helps build trust.

6. Right Customer – The right customer or recipient generally goes along with the Right Place. The only acceptable outcome for delivery is to the intended customer and the predetermined location. If the products end up anywhere else, trust is eroded, and your reputation is tarnished.

7. Right Price – The price has to be high enough for you to make a reasonable profit, yet low enough for the customer to want to make a purchase. Assessing your competitors is the best way to ensure you are timing your pricing correctly based on supply and demand, as well as market fluctuations and geopolitical influence.

Watch this helpful video for a more comprehensive look at the seven core principles of logistics.

Mastering the art of business involves understanding the nuances of logistics. Knowing how the 7 Rs can affect your company and its reputation is essential for any leader.