Logistics is not like mothers. If, according to the saying, there is only one mother, with logistics we can find more modalities than we might initially believe. But isn’t it always, after all, taking something from one place to another? The reality is that although there is always a displacement of material from point A to point B, the way of approaching it completely changes the way of working. Today we are going to see what differentiates commercial logistics from other logistics.
Commercial logistics versus other types of logistics
Commercial logistics is traditionally defined as the process that goes from the supply of raw materials to the delivery of the finished product to the end customer, going through the transformation processes of the same. In addition, it must ensure that the product reaches its destination in the manner, quantity and time agreed.
This ABC of commercial logistics can be shared in a general sense with the rest of the logistics, but it is in the comparison with them where the differences are evident. Among the most differences we find are military logistics and emergency logistics.
In this study from the University of Wollongong in Australia, titled “Applying Agile Trade Logistics Practices for Efficient Military Supply,” we can see both the similarities and the differences between trade and military logistics. Among the differences, the study highlights:
Oriented to achieve economic benefits.
The source of the budget is company income and loans.
The supply chain strategy is to achieve high revenue at low cost.
The main indicators are customer satisfaction.
It is not profit oriented.
The source of funding is the government budget.
The supply chain strategy is to optimize where to allocate the budget.
The main indicators are response time and military effectiveness.
Now it is easier to guess what the differences will be with emergency logistics. By their very nature, emergencies are going to have a greater unpredictability factor than the day-to-day business of business. This means, among other things, that we will not be able to reach the level of precision in the study of supply and demand, which will also lower the priorities of this type of logistics. Without clients as such and without military objectives, its indicators will be related to the people served, the time taken to start working in the area, etc.
What are its proper functions?
Now we are going to review some of the functions of commercial logistics, especially in distribution. Among the questions that commercial logistics must answer are which clients our company is going to address (individuals, other companies, institutional), how the product is going to be sold to them (in what type and size of batches, units, etc.) or If you are going to have your own or third-party points of sale (supermarkets in shopping centers, distributors…). It is clear that these are not questions that military logistics will have to ask.
In the case of humanitarian logistics, a large part of the processes are created on the fly, which are made ad hoc for very specific circumstances and, therefore, difficult or unnecessary to replicate, or which depend a lot on the experience of the logistic ones However, in the distribution tasks that we mentioned before, sitting down with enough time and without the rush of a humanitarian emergency to design a repeatable plan over time will prevail. So that the costs and their standardization will also gain prominence.
It is possible that your company will never be dedicated to taking armored tanks to places at war or to deliver first aid supplies to areas that have suffered famine or natural catastrophes. However, from the differences between these types of logistics with respect to commercial logistics, you should draw the lesson that you must be very clear about what you are looking for with your logistics so that it can really respond to your needs.