Companies cannot acquire all the raw materials necessary for production in one place or supplier. They will contract with several suppliers in order to get all the materials needed for production. The distance between the company and the suppliers also differ. Some suppliers are local while others are from other regions in the nation. There are even companies which contract international suppliers and import raw materials. Even with these differences, there is one thing common between these suppliers and that is the company has to move the raw materials from suppliers to the company. Transporting raw materials can be costly which include the transportation cost and taxes needed to move the supplies. And when it comes to moving raw materials, logistics is the only way for cargo to travel.
Logistics which mainly focuses on the management of business operation including the flow of raw materials provides a systematic method to evaluate current route, transport means and schedule and make changes in order to make the flow of raw materials more efficient. Aside from evaluating the current ways for cargo to travel, logistics experts also scan the market and look for available options which can lower the total transport cost or if they can use multiple cargo companies in order to move the cargo efficiently.
In looking for means to increase the efficiency in transporting raw materials from suppliers into the company, logistics experts will determine whether the best way for cargo to travel is by land, air, sea or a combination of two or more ways. If they decided to use multiple ways, they can then determine if some stages of transporting raw materials can be done by securing their own transportation vehicle and if by doing so, the cost will significantly decrease. Some companies which are using multiple suppliers of the same raw materials will often choose to hire transport companies especially if the distance between the company and the supplier is great. For local suppliers, oftentimes they will inquire if the supplier can transport the raw materials to the company themselves. There are companies that are strict with their security protocol which often choose to use their own transportation vehicles to gather the raw materials from the suppliers.
Regardless of how the company determine the route and transportation means for the cargo to travel, they will rely on logistics and for the experts to come up with the most efficient solution in order to lower the cost while keeping the raw materials on top quality throughout the whole travel.