What Is International Logistics? - Definition & Explanation
Logistical management is an essential component of any company and can be complex in our global economy. In this lesson, you'll learn the key concepts related to it. A short lesson follows.Definition
According to the Council of Logistics Management, logistics is the management process of 'planning, implementing, and controlling the physical and information flows concerned with materials and final goods from the point of origin to the point of usage.' International logistics involves the management of these resources in a company's supply chain across at least one international border.
It may sound complicated, but logistics is basically the management of stuff, and information regarding the stuff, from one place to another until it reaches the consumer. The logistical management of physical items may include integration of information (such as inventory databases and shipping schedules), material handling, production, packaging, inventory, transportation, distribution, storage, and security for the resources.
Logistics Evolution
The great logistics success story Logistics has been playing a fundamental role in global development for almost 5,000 years now. Since the construction of the pyramids in ancient Egypt, logistics has made remarkable strides. Time and again, brilliant logistics solutions have formed the basis for the transition to a new historical and economic era. Examples of this fundamental progress include the invention of the sea-cargo container and the creation of novel service systems during the 20th century. Both are integral parts of globalization today.
Supply chain management – a look at the entire logistics chain from the vendor’s supplier to the end customer. Supply chain management is a term that has grown enormously in use and significance since the late 1980s. Today, supply chain management is viewed as a holistic consideration of key business processes that extend from the vendor’s supplier to the end user. Accordingly, supply chain management is an extremely interactive, complex system requiring simultaneous monitoring of many conflicting objectives.
Global competition began to arise and spread in the 1970s and accelerated in the 1990s. Globalization is still moving forward today. Efficient logistics creates a crucial competitive edge for companies that are expanding in global markets. Successful logistics efforts in international supply chains can fuel the development of global markets.
scope of international logistics
International marketing is becoming more important to companies as the world shifts from distinct national markets to linked global markets. Globalization brings homogenization of consumer needs, liberalization of trade, and competitive advantages of operating in global markets. Companies are forced to think and act globally in order to survive in such a dynamic environment. All these elements have a deep impact on the development and the positioning of companies on international marketplaces where competition is cruel. Furthermore, another significant change concerns the customers since they are more demanding in term of quality, lead time and order fulfilment. In this context, firms must be more and more flexible and reactive to anticipate and to adapt to such changes. This quest for flexibility and reactivity affects the conception and the management of firms and more generally their logistic systems and contributes to the development of partnership relations, to the emergence of mergers or strategic alliances between companies.
From the point of view of management, marketing logistics or physical distribution has been described as „planning, implementing and controlling the process of physical flows of materials and final products from the point of origin to the point of use in order to meet customer‟s needs at a profit. As a concept it means the art of managing the flow of raw materials and finished goods from the source of supply to their users. In other words, primarily it involves efficient management of goods from the end of product line to the consumers and in some cases, include the movement of raw materials from the source of supply to the beginning of the production line. These activities include transportation warehousing, inventory control, order processing and information monitoring. These activities are considered primary to the effective management of logistics because they either contribute most to the total cost of logistics or they are essential to effective completion of the logistics task. However, the firms must carry out these activities as essential part of providing customer with the goods and services they desire.
RELEVANCE OF LOGISTICS INTERNATIONAL MARKETING
Logistics is some time referred as other half of marketing. Marketing experts have recognized that for 17 developing a position of sustainable competitive advantage, a major source is superior logistics performance. Thus, it can be argued that instead of viewing distribution, marketing and manufacturing as largely separate activities within the business, they need to be unified, particularly at the strategic level. One might be tempted to describe such an integrated approach to strategy and planning as „Marketing Logistics‟. Business can only compete and survive either by winning a cost advantage or by providing superior value and benefit to the customer. In recent years, numbers of companies have become aware that the market place encompasses the world, not just the India .As a practical matter, marketing managers are finding that they need to do much work in terms of conceptualizing , designing , and implementing logistics initiatives to market effective globally. Following are the reasons behind the extension of logistics activities at global level to do business internationally. The magnitude of global business are: Increase in the magnitude global business. Business are relying on foreign countries to provide a source of raw materials and markets for finished goods. Fall of global trade barriers. Increase in Global competition . A perspective change in business and marketing urged the necessity of integrating logistics in marketing activities. Increasingly, the power of the brand is diminishing as technologies of competing product converge, making product differences less apparent. Faced with situations, the customer may be influenced by price or image perceptions, but over-riding these aspects the availability of product in stock may become the major consideration. A second change is that the customer‟ expectations of service have increased. The customer is now more demanding and more sophisticated. Industrial buyers are more professional in their 18 approach. Increasing use is made of formal vendor appraisal systems and suppliers are now confronted with the need to provide just-in-time delivery performance.
Total Logistics Solution
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Tag der Veröffentlichung: 03.07.2015
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Operational objectives of a logistics system
z Rapid response
z Minimum variance
z Minimum inventory
z Movement consolidation
z Quality
z Life cycle support