Essay On Logistics Cost

1359 Words3 Pages

1 Introduction 1.1 Background and Significance In the present day, logistics cost is considered to be an important factor showing potential and competency level in both organizational and national stage. Several of entrepreneurs face a high production cost problem which is a result from higher prices of oil and raw materials. In the meantime, exporters also encountered with the problem of Thai Baht currency appreciating trend. Therefore, entrepreneurs have to adapt and adjust themselves to survive in the highly competitive world, by means of increasing production efficiency and reducing production cost. Logistics has played important role in the business competition and is one of important factors in the production cost increase. World Bank has made a survey on logistics performance (Logistics Performance Index: LPI) to measure the efficiency of logistics system of each country [1] as shown in Figure 1. Figure 1 Comparison of Logistics Performance Index (LPI) of Some Asian Countries From the table, the result showed that in 2012 Thailand was ranked 38th with score 3.18 out of total score 5.00 while neighbor countries in Southeast Asia such as Singapore ranked 1st (with score 4.13), Malaysia ranked 29th (with score 3.49), the Philippines ranked 52nd (with score 3.02), Vietnam ranked 53rd (with score 3.00). In this survey, other big nations in Asia such as China ranked 26nd (with score 3.52), Japan ranked 8th (with score 3.93), South Korea ranked 21st (with score 3.70), and India ranked 46th (with score 3.08). Besides, Thailand’s logistics cost is relatively high compared to other countries. In 2012, Thailand’s logistics cost to GDP was expected to reduce to 14.3% due to the massive flood in the 4th quarter 2011, while most of... ... middle of paper ... ...: Analysis of XYZ Company current situation. This section covers introduction of XYZ Company, analysis of logistics cost management of XYZ Company and the existing problems. Chapter 4: Application of ABC method. This part analyses the logistics activities of XYZ companies, cost drivers, costs and expenses related to each activity, distribution of expenses into activities and calculation of cost per unit of each activity Chapter 5: Logistics cost management solutions and suggestions. This section will summarize findings from the previous chapter and suggestions to the problems. In order to complete those five chapters mentioned above, the researcher will explain the steps in conducting research as well as collecting data in order to analyse existing problems of the organization as shown in Figure 2 below: Figure 2 Steps in Conducting Research

In this essay, the author

  • Analyzes how thailand's logistics cost is high compared to other countries due to the lack of development in logistics network connection, efficiency of product distribution facilities, and quality of shipping and air freight.
  • Explains that logistics cost is considered to be an important factor showing potential and competency level in both organizational and national stage.
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