Logistic information system is nothing but a part of Management Information System to manage, control and measure the logistical activities. These activities occur within the organization or as well as overall across the supply chain.
Logistics information systems are important for achieving logistics efficiency and effectiveness. In an enterprise, logistics information system seeks to achieve the following:
- It ensures of logistics functional operations into a process pursuing customer satisfaction at the lowest total cost.
- Information system facilitates planning and control of the logistical activities related to order fulfillment.
- It makes the firm more competitive, by making better tactical and strategic decision for the benefits of the firm and its customer.
- Helps provide customers information regarding product availability, order status, and delivery schedules promoting customers service.
- It reduces the requirements of inventory and human resources by enabling requirements planning.
- It interfaces with marketing, financial, and manufacturing information systems and provides information to top management to help formulate strategic decisions for the whole firm.
- The use information technology in information systems has enabled quick response to demand making forecasting redundant. This has also helped in implementing “pull” systems like just-in-time making the firm more competitive.
- It promotes systems that link the operations of the firm, such as manufacturing and distributing, with the suppliers operations on the one hand the customer on the other.
- In the other cases, organizations are finding that through information they can manage dispersed inventories as if they were single inventory. The benefits of this can be considerable. If inventory management is centralized and decisions on replenishment and other quantities are taken or the basis that is a single stock, then only one safety stock instead of many required. The stock itself can be carried anywhere in the system, either near the point of production or the consumption. This is the concept of ‘virtual’ inventory management or electronic inventory management.