What is trade logistics?
As a definition and explanation it can be said that trade logistics is understood as 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 retail logistics work?
Retail logistics works when the internal processes, flow of goods and flow of information meet all the requirements of the merchandise management system and warehouse management through the selection of a concept that is suitable for the retail company and an efficient warehouse strategy. Only then are the required goods and trade goods quickly accessible from the warehouse and goods distribution centers 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 retail company and thus for retail 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 matched to the needs and requirements of the individual retail companies so that the internal processes and flow of goods in the goods distribution centers are not disrupted and, as a result, warehouse capacities are not overloaded. This also saves on the excessive storage costs that retail logistics entails.
What is the goal of retail logistics?
The ultimate goal of retail logistics is the effective provision of all retail goods and sales goods in the goods distribution centers in order to minimize storage costs and to generate the optimal profit for a retail company. Both the optimization of the management processes and the logistics processes in conjunction with an inventory management system that meets the customer's requirements allows a retail 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 goods for very long, but rather 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 the increasing digitalization 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 retail logistics for the industry as well as for the retail sector. Only through constant further development and change of individual logistics processes of trade and distribution logistics can all customer requirements be met and thus the profit of a company maximized."Back to Glossary Index