What is trade logistics?
As a definition and explanation, it can be said that trade logistics is understood to be all logistical processes of a company in connection with material and goods flows as well as information flows within procurement logistics. This includes all processes of trade logistics that occur with regard to customers, retailers as well as manufacturers and suppliers and the company or also such logistical processes that happen both inside and outside the trading company.
How does trade logistics work?
Trade logistics works when the internal processes, flows of goods and information meet all the requirements of the merchandise management system and warehouse management through the selection of a concept that is suitable for the trade company and an efficient warehouse strategy. Only then are the required goods and trade goods quickly accessible from the warehouse and goods distribution centres and can be made available for transport to the customer, retailer, manufacturer or supplier by the appropriate service partners.
Basically, trade logistics deals with the question of whether a trading company handles certain trade goods directly and sends them to the customer, retailer or supplier through service partners or whether the trade goods are stored beforehand. The faster the goods arrive at the customer or supplier, the better. Managing this is a major challenge for every trading company and thus for trade logistics.
In order for the flow of goods and ultimately trade to succeed without any problems at all, the flow of information and communication with suppliers is of crucial importance. The information flows of the individual processes from the areas of logistics, warehouse management, procurement logistics and distribution logistics must run precisely and in a coordinated manner.
All deliveries must be precisely coordinated with the needs and requirements of the individual trading companies so that the internal processes and goods flows of the goods distribution centres are not disrupted and, as a result, the storage capacities are not overloaded. This also saves on excessively high storage costs that trade logistics entails.
What is the goal of trade logistics?
The ultimate goal of trade logistics is the effective provision of all trade goods and sales goods in the goods distribution centres in order to minimise storage costs and to generate the optimal profit for a trade company. Both the optimisation of the management processes and the logistics processes in conjunction with an inventory management system that meets the customer's requirements allow a trading company to be successful in the end.
To ensure that certain products and trade goods are always available at the "point of sale" (POS), the flow of goods must be carefully thought out and systematically planned beforehand. If a trading company has understood the goal of trade logistics, this brings the great advantage of not having to store trade goods and sales merchandise for a very long time, but to handle the respective goods and merchandise more frequently and to ship them immediately to customers or manufacturers through the corresponding service partners.
In relation to increasing digitalisation and customer expectations, retail logistics has taken on a very important and significant role now and in the future. This means that without a good strategy and a carefully thought-out concept, there is no well-functioning trade logistics for industry or trade. Only through continuous development and change of individual logistics processes in trade and distribution logistics can all customer requirements be met and thus the profit of a company maximised."Back to Glossary Index