Logistics affect economy from two point of view, micro and macro environment.First, logistics has an important impact on and a relationship to the overall economy (the macro level), and inventories are not the only relevant economic factor. Second, important interaction occurs between micro-level and macro-level economic activities. This section examines some macroeconomic data showing the importance of logistics in the economy and also, demonstrates the impact of improved logistics and transportation systems.
1. Value-Added Role of Logistics. The four principal types of economic utility that add value to a product or service are: form, time, place, and possession. Form utility is created by manufacturing activities, time and place utility
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Economic Impacts. The economic impacts of logistics are described in highlights of four major areas: economic development and specialization, variety of goods, effects on prices, and land values. Logistics contributes to economic development by allowing firms to capitalize on comparative cost advantages in the production of goods and services by efficiently transporting goods to the market. The volume and variety of goods produced by firms is made available to consumers at places far from production points, frequently long after the goods have been produced. The availability of goods depends on the effective logistics performance of all firms in movement and storage functions. The creation of time and place utility by logistics activities may also contribute to lower prices. Improvement of logistics systems by firms, both technically and managerially, leads to many benefits on prices and the availability of goods. Transportation can affect land values when technical improvements occur. Improved transportation facilities increase the accessibility of the land, making it more useful and …show more content…
Logistics Interfaces with Operations/Manufacturing. Length of the production run is a classic interface area between logistics and manufacturing management. Other operational areas of interface include the effects of product seasonal demand, supply-side interfaces, protective packaging, and foreign and third-party alternative sources of production inputs.
2. Logistics Interfaces with Marketing. Logistics is often referred to as the other half of marketing and plays an important role through the physical movement and storage of goods in selling a product. Interfaces with marketing are discussed in terms of price, product, promotion, and place elements of the marketing mix. Logistics pricing decisions concern carrier pricing, matching discount schedules to transportation rates, and volume relationships affecting the ability to move and store products.
3. Logistics product decisions involve size, shape, weight, packaging, and other physical dimensions affecting the ability to move and store products. Promotion decisions affect logistics in terms of pushing or pulling the product through the distribution channels, and the storage effects on channel
Over the years role of supply chain has been altered. The distribution has switched from shipping from one focal point, now technology has shortened the process that will to ship directly from the manufacture to the customer that will tie in to the distribution channels. Though distribution is costly, a person would think all the risk will be eliminated. Contrarily to what people may think, distribution have many risk it must account. When the product is unloaded onto the truck, it’s the trucker sole responsibility to ensure the customer receive their product. Distribution initially start at beginning when it is
...dustrial Distribution allows me to pursue my interests in both Business and Engineering, and therefore I chose that major. Also, it will help me to build my personal characteristics that will make me successful in this major. As my education continues, I look forward to learning how manufacturers and distributors maintain good communication and relations, so that the products can be distributed efficiently and avoid problems. If there are problems, I would also like to comprehend ways to solve those problems. In the future, I hope to work for a company such as Amazon, Dell, or Boeing in the field of logistics. These companies depend on logistics in planning and conducting their operations. Since logistics and relations between manufacturer and distributor are critical to the everyday operations of businesses, understanding this will help me in my future endeavors.
The most important part of integrating anything into a plan is the logistics portion of that plan. What is
The parcel service industry is made up of four main competitors. These competitors are UPS, FedEx, Airborne Express, and the U.S. Postal Service. Since 2000, American consumers have spent more than $50 billion to ship parcels, packages, and overnight letters. New parcel distribution patterns developed due to the way U.S. manufacturing companies are operating. The Internet has expanded the reach of direct marketing, particularly with retail transactions requiring home delivery. Globalization has also created the need for parcel carriers to expand worldwide.
In the past two decades, transportation cost of cargo has decreased that has aided in improving productivity and economic growth. Nonetheless, the operations of the market forces and the rising cost of fuel as well as environmental concerns impact on the cost of transporting goods from one place to another. Subsequently, the high cost of moving goods will be felt throughout the economy affecting enter...
Hum,Sin Hoon (2000), “A Hayes-Wheelwright framework approach for strategic management of thrid party logistics services”,Integrated Manufacturing Systems,Vol .11/2,pp 132-137
Logistics exists to satisfy customer requirements by facilitating relevant manufacturing and marketing operation. The main responsibility of logistic is the geographical positioning of raw materials, work in process and finished inventories at the lowest possible cost.
Outbound logistics: They are made up of centralized logistic centers to promote efficiency, global network, reduced emission of CO2 by 22% to ensure ecological sustainability and lastly to improve customer service.
The transportation & logistics industry is a form of industry that keeps people and products on the move, it includes airlines and airports, shipping companies, logistics service providers and other transportation companies. That’s why it is considered the backbone of modern global supply chains. In a place like the Kingdom of Saudi Arabia that has diverse geography with a dry desert and great temperature extremes and a large area of about 2.1 million square km, a transportation & logistics industry is a necessity. Imagine you need to move from one city to another (of course it will be so hard to cross large areas of empty deserts) you have only two options to transfer from one to another city; the first option is to drive and the second option is to fly and ship your car via a car transport carrier. The harsh climate in Saudi Arabia makes people to prefer using the second option, this cause the market of transport market to enlarge. Albassami International Group is one of the biggest companies established to satisfy those needs. It is considered one of the biggest companies specialized in vehicle transportation in the Middle East. The philosophy of the company is to serve the needs of the clients over the span of thirty two years, throughout which they constantly had an eye to the future by evaluating the most appropriate ways in which to make transporting clients’ vehicles via the best and safest answer. They operate round the clock to serve clients at all times.
In logistic industry, they have been through lots of challenge in worldwide market. As the containerization of the global economy scopes, a phase of development and explanation, ports find themselves inserted in ever changing commercial environment where logistics is the forefront. Thus, this industry reaches a phase of maturity and rationalization due to the process of logistic on land.
This is the activity carried out by organizations that own production sites, and their performance has a major impact on product cost, quality, speed of delivery and delivery reliability, and flexibility [8]. As it is quite an important part of the supply chain, production needs to be measured and continuously improved. Suitable metrics for the production level are as follows. Order lead-time, the total order cycle time, called order to delivery cycle time, refers to the time elapsed in between the receipt of customer order until the delivery of finished goods to the customer. The reduction in order cycle time leads to reduction in supply chain response time, and as such is an important performance measure and source of competitive advantage [9]. It directly interacts with customer service in determining competitiveness. Range of product and services: According to [8] a plant that manufactures a broad product range is likely to introduce new products more slowly than plants with a narrow product range. Plants that can manufacture a wide range of products are likely to perform less well in the areas of value added per employee, speed and delivery reliability. This clearly suggests that product range affects supply chain performance. Effectiveness of scheduling techniques is another important measure of supply chain effectiveness. Scheduling refers to the time or date on or by which
Zanjirani F., Rezapour, S. & Kardar, L. (2011) Logistics operations and management concepts and models, 1st ed. London ; Elsevier.
...eliability in exchange for lower costs. In contrast producers of relatively high-value goods, especially high-technology or other products with limited shelf life, will be more willing to pay higher prices for greater reliability. The last 25 years have seen a particular increase in the quantity of high-technology goods that are exported, often over very long distances. For that reason we concentrate particularly on the effects of logistics quality on trade.
Coyle, J., Langley, C., Gibson, B., Novack, R. and Bardi, E. (2008).Supply Chain Management: A Logistics Perspective. 8th ed. Cengage Learning, p.366.
Transportation is vital to a nation's economy. Reducing the costs of transporting natural resources to production sites and moving finished goods to markets is one of the key factors in economic competition. The transportation industry is the largest industry in the world. It includes the manufacture and distribution of vehicles, the production and distribution of fuel, and the provision of transportation services. In the 1990s, approximately 11 percent of the U.S. gross domestic product and an estimated 10 percent of all jobs in the United States were related to the transportation industry.