The logistics chain of a value chain

The logistics chain refers to all the business activities required for a product to find its way from the manufacturer to the end customer. This includes all logistical and production processes of the individual links (companies involved) in a value chain.

A logistics chain begins with the extraction of raw materials or the development of a conceptual design for a service. A business idea is therefore also to be regarded as a link in the logistics chain.

Existing processes in the middle of the logistics chain are generally distributed among several participants (suppliers, logistics companies and customers) and function as a unit. Each link in the chain takes on the tasks assigned to it, usually the further utilization of the material (purchasing, production, storage – including profitability and shipping). The disposal (disposal logistics) of waste along the entire value chain is also taken into account.

An existing logistics chain thus automatically crystallizes the dependency with regard to material requirements planning (MRP), which describes the realization of a cost-optimized but seamless material supply within the supply chain, starting with primary production (material extraction). In order to ensure a smooth flow of materials and information, all the trades involved must coordinate with each other in a standardized manner.

The aim of a logistics chain is to be in a logical relationship with regard to the process organization (different trades). The interpretation of the logistics chain as a sequence of supplier-customer relationships shows that it is not only the customer at the end of the chain that is worked towards, but rather the consideration of internal customers, who make up the overall performance of a logistics chain, deserves special attention. The end customer’s acceptance of the product ultimately demonstrates that the overall performance of the logistics chain is coherent.

Further information on this topic can also be found under Supply Chain Management and Reverse Logistics.