Logistics Management System: Meaning, Components, and Development Process

Quick Summary: Managing your logistics activities can be painless with a robust Logistics Management System (LMS) with top-notch features. Get a complete understanding of LMS, its benefits, and how you can build one for your own business. Keep reading to get enlightened about LMS.

Logistics involves a wide range of activities that make it a complex and cumbersome feat. Things can go awry sooner than you think if these activities are not properly managed and controlled. The role of technology in this domain cannot be underestimated, given the humungous size of logistics operations.

Therefore, companies are making efforts towards digital transformation to adopt modern methods of managing their logistics processes. Developing a logistics management system is an important step in this transition.

Businesses can create this software system to expedite and streamline their logistics processes by leveraging custom software development. It provides a bunch of functionalities that take the pain of logisticians and other stakeholders in managing various activities.

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Whether you are planning to build a logistics management software platform or looking for information on it, this blog will provide all the necessary insights. Keep scrolling for the information.

What is a Logistics Management System?

Logistics management system refers to acquiring, storing, and transporting inventory from its origin to its destination by optimizing logistic operations. Logistics involves various activities like warehousing, inventory management, fleet management, and delivering the goods or products to the right customer.

“Logistics is the lifeblood of modern commerce, and its size makes it a giant sector in the world economy. As per Statista, the projection of growth for global logistics industry is bright and is estimated to reach 14.08 trillion US dollars by 2028.”

Managing logistics is a herculean task in the absence of effective strategies and tools that coordinate processes like inventory management, warehousing, transportation, and shipping. Using software solutions in the logistics processes cuts the cost and time and helps businesses avoid issues resulting from human errors.

Therefore, companies are leveraging integrated logistics management systems that automate numerous activities in the process and consolidate data to provide real-time information to all stakeholders.

Companies that realize the value of these systems opt for logistics software development to build custom solutions that meet their business needs. Investing in such software product development will allow companies to effectively manage goods, inventory, materials, order, production, and other aspects efficiently.

Benefits of Developing a Logistics Management System

Negligence is an open invitation to chaos. This is a correct statement, especially in the case of logistics, in which things are done on a large magnitude. Hence, a logistics management system is needed to keep things in order and let the processes work without failure. Let’s see some of its key benefits below.

Reduced Operational Costs

One of the most obvious advantages of investing in logistics management software is the reduction of costs. The software helps businesses streamline their processes and manage aspects like inventory control, warehousing, material handling, storage, and other types of activities. Advanced logistics management systems can provide optimized routes to destinations by analyzing historical data that decreases the costs of fuel consumption.

Increased Efficiency and Productivity

Logistics management is a complex process where achieving the optimal use of resources is a challenge. However, the use of a logistics management system can eliminate the complexity and increase the efficiency of a business. The system helps businesses reduce the wastage of resources, maintain quality standards, reduce failures, and avoid defects and deviations. These improvements enhance the productivity and efficiency of a logistics business.

Enhanced Customer Experience

The whole process of logistics management, from acquiring the goods to transporting them to the destination, consists of several activities. Efficient management of these activities like packaging, warehousing, material handling, and more is vital for better customer experience. A logistics management system automates various activities that speed up the process and elevate customer experience. The system also provides data and analytics to help companies get useful insights to meet customer needs.

Essential Components of Logistics Management System

A comprehensive logistics management software system is a collection of various subsystems that handle different activities under logistics management. These different software solutions help companies manage various aspects of supply chain management, be it inventory, warehousing, transportation, or anything else.

The following is the complete list of key components of a large software system to manage logistics activities.

Inventory Management

This is a software suite that is designed to track and manage inventory information. It tracks and manages information about the movement of goods or materials, stock levels, and provides data and analytics. An inventory management system helps companies make important decisions like when to order new goods and materials, how much to order, and where to store them.

Warehouse Management

Warehouse management comprises several activities to control, maintain, and automate operations related to warehousing. A warehouse management system is a set of tools and processes that streamlines goods management right from their arrival through storage, tracking items, to dispatching them to the desired destination.

Order Management

Order management comprises all the activities from receiving the orders and accepting payments to fulfilling the orders. It also involves fraud detection and completing paperwork for suppliers, warehousing, and shipping processes. An order management system helps companies automate the process of receiving and fulfilling orders and data from multiple activities is synched to a single interface.

Transportation Management

Transportation is the backbone of logistics that helps businesses move their goods from a certain location to a destination. Companies often utilize individual solutions like a trucking management system to manage their fleet. However, using a comprehensive solution like a transportation management system that can look over the entire fleet of vehicles and handle other transportation processes is more beneficial.

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Freight Management

It involves activities to manage and track the delivery of goods. Companies need reliable and easy-to-use freight management systems to efficiently manage their delivery of goods. The system is capable of handling various operations, be it documentation and compliances, route optimization, and tracing the freight. It can also provide data and analytics reports for better freight management strategies.

Reverse Logistics

Recalling goods and managing returns can be chaotic. However, it can be streamlined with an effective reverse logistics management system. It manages data related to returns and status updates, keeping you informed about the return activities.

Quick Steps to Build a Logistics Management System

Now you have enough understanding of what a logistics management system is, how it benefits businesses, and what components it entails. Here, you can find some steps to build a logistics management system (LMS) as per your requirements.

Find the Purpose

Start with the discovery phase that aims to define project scope and objectives. Without a defined goal, it’s hard to build something that will yield the desired results. Determine what you really want to achieve with the logistics management software. Identify your requirements to implement the right functionalities into your LMS. Here are a few objectives that companies often try to meet with an LMS.

• Route planning and optimization
• Tracking and tracing logistics
• Managing inventory

LMS can provide different interfaces for various users like managers, delivery workers, suppliers, etc. They can utilize the system to retrieve or enter information.

Choose a Team

Developing custom software to manage logistics processes entails various complexities. You need a team of specialists who can handle the project professionally and develop the right solution for your business. To develop an LMS, you need different experts like a project manager, business analyst, UI/UX designers, developers (frontend and backend), and quality assurance experts.

However, hiring an in-house team may not always be feasible, given its high-cost factor as you will have to pay for overhead costs and benefits. Nevertheless, outsourcing the software development project is a good choice because you only pay as per the resources you use and avoid additional costs like salaries and office rent.

Development

A Business Analyst (BA) determines the scope of a project and analyzes requirements to develop the right solution. The project manager creates a roadmap for the development team and breaks the project into smaller tasks done in sprints. Now, the development team can work as per the roadmap provided by the project manager and scope defined by the BA.

The product is designed by the UI/UX designers. The design and development team will create a software prototype that provides core functionalities. Front-end developers are tasked to implement the user interface for the product. The backend consists of the server coding, APIs, payment gateway integration, and more.

Developers can develop front-end and back-end with different technologies. The following is a tech stack for the logistics management system.

Front-end Development

• ReactJS
• VueJS
• TezJS
• Angular

Backend Development

• NodeJS
• Python
• Java
• PHP
• .NET

Server

• AWS
• Azure

Databases

• MySQL
• PostgreSQL
• MongoDB
• Cassandra

Payment System

• PayPal
• Stripe
• Skrill
• Square

Notification System

• Twilio
• SMPT
• Push.io

Mapping

• Google Map API
• OpenStreetMap API

Mobile App Development

• Java
• Swift
• Flutter
• React Native

We advise you to go through the current software development trends to build a solution with the latest functionalities.

Testing and Deployment

Next to the development phase comes the QA process, where engineers perform thorough testing to remove errors and ensure everything works smoothly. Once the QA team gives a green signal, the solution is ready to be deployed on your on-premises server or you can deploy it on the cloud.

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How Can Radixweb Help You?As you have seen above, developing a software solution to manage your logistics operations requires a professional team consisting of diverse experts. We are an experienced logistics software development company with seasoned and highly knowledgeable experts. We have the best team of software designers, developers, QA experts, and other professionals to help you develop a disruptive solution.A solid understanding of the business domain and great experience is required to develop a software product on an enterprise-scale. At Radixweb, we have partnered with lots of businesses that come from various industries and built the right solutions that match their needs.You can hire software developers from us who are proficient in creating a wide range of solutions for different businesses. Our team can handle your project the way you want it and develop a cutting-edge logistics management solution.Reach out to us for consultation and support to develop a tailored logistics software solution.