Logistics and distribution managementThere are two basic aspects of logistics management that can be examined in detail here which would give one a clear picture of the trend now along with whether or not this is infact the best practice. One shall also seek to qualify the statement that logistics management in essence seeks to reiterate the corporate goals of the organization. The two trends in question here are those of supply chains and logistics and distribution outsourcing along with the concept of integration and how it has an impact on logistics and distribution management.
The report shall also seek to examine the trends not just in theory but with regards to the practices and contrasting styles of logistics management required due to contrasting styles of retail as followed by Marks and Spencer, and TESCO both companies listed on the FTSE 100. Logistics and distribution occupy a position of supreme importance in all businesses across the world most of all in retail. A successful and well managed logistics and distribution operations are the basic keys behind a business that hopes to thrive and do well.
Logistics and distribution management experts manage the transportation and distribution of goods, materials, labor and other commodities right from the source to the market. Computer software, communications networks and other technologies are used to bring the distribution process to order. If one was to understand the concept of logistics and distribution in the management of the company, one has to basically follow a process that starts at the source, or at the place where the company gets its raw material, to the manufacturing unit, to the warehouse, the distributing units and finally to the retail space.
Logistics and in turn distribution are the departments that are supposed to be take care of the efficient movement and storage of the product from the source i. e. its initiation till the time its gets to the access point for customers. Logistics are in essence the activity of transport, which is basically a second order activity i. e. it is generated by other economic activities. As such the demand for logistics and distribution depends heavily on the overall growth of the economy.
One can, for instance take the example of the growth story of freight traffic in Europe after the formation of EU and an integrated system of trade. With the growth of industrial production from 1.8 in 1990 to 3.4 in 1998, the freight in kms covered in Europe grew from 1.9% to 4.0% in the same period. The figures therefore seem to suggest a story that the existence of logistics is dependent on the growth of production. While true in the theoretical sense, the reality works inversely.
Imagine having a manufacturing unit in place with no way of transporting raw materials to it and finished goods out of it. Logistics delivers a service that is multifaceted and largely intangible. “Good Service is pretty hard to measure and difficult to quantify and in fact the contribution of logistics at the national level is almost impossible to document. Logistics and distributions help in the creation of time, place and even form utility, through the management of processes that enable companies to get goods to get to the right places at the right time in the right condition at the right costs.
These are the most basic utilities that are performed and these have in fact been recognized and put on record for a number of years. Changing costs of resource inputs and changing technology concepts have meant that the characteristics of logistic systems have changed radically in physical and organizational terms. Levels of service that are expected out of the logistics department have also increased over time.