Write an essay about the Global Logistics.
Overview of Global Logistics
The global logistics industry as a whole is comprised of different types of complex transportation functions associated with the movement of freight and cargo and also storage mechanisms involved therewith. Functions associated with different sectors like shipping of commodities, warehousing of merchandises and also other types of freight activities conducted through use of rail, road and water transport systems are observed to effectively constitute the platform of global logistics. During 2013, the market for global logistics amounted to around $4 trillion which accounted for 10 percent of the global Gross Domestic Product (OECD, 2016).
Further, the market for global logistics also accounts to be faster market such that it reflects a 7 percent year-on-year growth from the 2011 period. During the current period, the global logistics industry is expected to incur total revenue of around $3.8 trillion. The global air transport industry is observed to reflect a declining trend since 2012 while the international market for rail freight accounted for a 6 percent growth rate till 2015. Further, the global market for road freight was taken to account to GBP 2.2 Trillion by the close of 2015 thereby recording an increment of 28 percent compared to the value gained during 2010 (Barone, 2016).
Logistics as a Business Function
Logistics serves as a significant business function in a specific business institution in that it helps in the effective storage of raw materials and finished products, procurement of different types of raw materials and other semi-finished products for meeting of production objectives and also encourages and manages effective flow of potential resources related to human, technological, material and also informational resources. Logistics thus serves as an effective business function based on assisting the organisation to recruit the right quality of manpower resources for conducting the different types of business and organisational functions associated with the various departments. It also serves the organisation through procuring quality tools and material resources needed for adequately meeting the production objectives and also enhancing the performances of the production functions (Schönsleben, 2016).
Likewise, logistics as a business function also becomes associated with the effective storage, management and flow of inventory through the use of proper inventory control mechanisms like Just-in-Time (JIT) and others like First-In-First-Out (FIFO) or Last-in-First-Out (LIFO). Use of effective inventory control techniques helps the business institution in countering the emergence of stock-out situation. Finally, logistics is also related to the distribution of potential material, human, technological and other types of informational resources for meeting of departmental and institutional objectives (Dean, 2015).
Global Logistics in Supply Chain
Global logistics plays a key part in the supply chain activities of a business institution in that it helps in the effective planning, implementation and also serves in controlling and enhancing the efficiency level of storage functions associated with storing of raw materials and finished products and also in encouraging the flow of services and needed information between two poles the production and consumption centres based on consumer requirements. Logistics functions in arranging the right type and right quality product at the right distribution and consumption centre at the right time for helping in meeting the requirements of the right type of individual customer and consumer groups and also at the right storage and distribution cost. The incorporation of logistics in supply chain activities of the business institution rightly enhances the operational and organisational efficiency through reduction of lead times and delays and in enhancing the efficiency level of production and customer servicing objectives (Christopher, 2016).
Supply Chain Performance
The performance potentials of supply chain are effectively evaluated based on the use of both qualitative and quantitative measures. Different types of qualitative measures like satisfaction levels of customers and also the enhancement of product and service quality aid in evaluating the performance potentials of the supply chain systems. Likewise, different types of quantitative measures like lead times involved in order-to-delivery, response time of the supply chains, flexibility of the supply chain systems, utilisation of needed resources and finally the performances of the delivery and distribution systems all contribute in evaluating the performances of the supply chain systems (Camerinelli, 2012). The quantitative tools for analysing the supply chain performances are essentially classified along financial and non-financial categories. The non-financial measures for evaluating supply chain performances are essentially identified as cycle time, level of customer services, and evaluation of inventory levels and utilisation potentials of the existing resource base. Different types of financial measures associated with the measurement of cost and revenues related to different operational and business segments also contribute in measurement of supply chain effectiveness (Gattorna, 2016).
Role of Global Logistics in Supply Chain Performance
The role of global logistics in enhancing the supply chain performances can be effectively diagnosed along five main directions outlined as follows.
Firstly, the focus on evaluation and management of the different types of costs associated with the supply chain activities right from the sourcing and distribution centres are required to be conducted. Different types of costs associated with logistics, tariffs and custom duties are added to the supply chain related costs. Secondly, the logistics systems focus on the use of ERP Systems for automating the supply chain systems. The use of automation processes contributes in conducting of booking activities and also in the management of transportation carriers for movement of merchandises from different centres (Mangan & Lalwani, 2016). Thirdly the incorporation of effective visibility systems contributes in making the supply chain systems seamless and transparent in fashion. The same helps in effective management and monitoring of supply chain activities in a broad based fashion. Similarly, the use of RFID (Radio Frequency Identification) technology enabled tags contributes in tracking the movement of merchandises along the production, warehousing and distribution centres. Fourthly, global logistics impacts the supply chain performances based on effective integration of the different supplier and transportation networks. Effective integration enabled in the above respect aptly helps in enhancing the supply chain performances. Fifthly, the integration of logistics with supply chain systems potentially contributes in addressing the regulatory and security aspects (Bookbinder, 2012).
Barone, A., 2016. Managing Global Logistics for Business Growth: A guide for small to medium enterprises pursuing the global market growth through cross-border trade (export/import). United States : Buoyant Capital.
Bookbinder, J.H., 2012. Handbook of Global Logistics: Transportation in International Supply Chains. United Kingdom: Springer Science & Business Media.
Camerinelli, E., 2012. Measuring the Value of the Supply Chain: Linking Financial Performance and Supply Chain Decisions. United Kingdom : Gower Publishing, Ltd.
Christopher, M., 2016. Logistics & Supply Chain Management. United Kingdom : Pearson UK.
Dean, C.M., 2015. A Clinical Guide to Organisational Health: Diagnosing and Managing the Condition of an Enterprise. United Kingdom : Cambridge Scholars Publishing.
Gattorna, J., 2016. Dynamic Supply Chain Alignment: A New Business Model for Peak Performance in Enterprise Supply Chains Across All Geographies. United Kingdom : CRC Press.
Mangan, J.J. & Lalwani, C., 2016. Global Logistics and Supply Chain Management. United Kingdom : John Wiley and Sons.
OECD, 2016. OECD Economic Surveys: Korea 2016. United States : OECD.
Schönsleben, P., 2016. Integral Logistics Management: Operations and Supply Chain Management Within and Across Companies, Fifth Edition. United Kingdom : CRC Press.