How to Interpret Service Level Agreement Logistics

First of all, what is meant by logistics? Logistics is defined as the process by which the flow of many resources is managed starting from the beginning of production and terminating at the marketplace. So service level agreement logistics could mean the process by which service level agreements are created from conceptualization up to implementation. Meaning, it is the content of the service level agreement which is being managed, the content being in this case the resources that are to be managed.

Another way of interpreting service level agreement logistics is that it is a service level agreement which is concerned with the process of logistics itself. In traditional logistics, resources such as energy, goods, and information are transferred from one point to another and in the process are used in some way. In this interpretation, industries of many kinds will require professional support from logistics companies so that their resources can be properly handled for them. Many times, industries lack the capacity (manpower, transportation, and budget) to actually handle their own logistical needs, so they outsource.

In the process of outsourcing, the service provider would be the logistics company and his service is logistical support to the client or customer which would be the company sending the resources (energy, goods, or information, etc.) The service level agreement would serve as their formal legally-binding arrangement which would stipulate: what services the logistics company would provide to the client; what amount the client intends to pay the logistics company for such services; how the client intends to pay the service provider; and any corresponding penalties if either party does not fulfill his end of the bargain.

The point of outsourcing to a logistics company is to keep your own costs as low as possible. If a manufacturing company, for example, were to buy their own ground transportation fleet, this would be much, much more costly than if they were to simply outsource their logistics needs to a professional logistics provider.

A person who handles logistics in the logistics support industry is technically called a logistician. To become a logistician, you may need to get specific training in the field of logistics support from a certified university or college. But the training will give you the right knowledge at interpreting service level agreements so that your logistics company does not suffer from the bad end of a deal.

Logistics has its roots from its uses by the military even from ancient times. Nowadays, it is also modern military forces that need logistics to a significant degree since they need a reliable way to assure that much-needed resources will reach their base of operation, such as the American military installations in foreign countries. However, the business of logistics as used in industry was only formalized back in the 1950s. Now that business has become globalized, the logistics industry requires the services of Supply Chain Logisticians who are specially trained in complex logistics support for industries around the world.