Concept Of Logistics

Concept Explanation Logistics is a concept that is constantly evolving in today’s world. Its use began in the 1950s and 1960s in a military context, including the “moving, supplying, and maintaining military forces” and was essentially the code word for the economics of warfare. It has now expanded to include the important tools used to develop a competitive advantage in business through better quality from a customer perspective while at the same time lower cost. In the business context, logistics is the coordination of activities that assist products as they flow from the supplier to the manufacturer, and then ultimately to the end user. In today’s world, technology and computers have made logistics an essential part of any business or manufacturing

The book does not seem to even allude to the fact that the idea has its roots in a military past or discuss the seven factors that influenced the development of logistics into a business concept. The first factor is transportation cost, which grew at a very high rate since the 1960s and required companies to ensure efficiency in the component of its business. A second factor, which highly relates to the first, was that certain technological limitations in production restricted the possibility for companies to lower production cost in response to the increased transportation cost. The holder of smaller inventories by retailers in supply chains and demand by customers for more diverse products contributed to the development of logistics as companies had to determine how to meet these seemingly contradictory demands by its downstream customers. Both computers and an increased volume of data and information also contributed positively to the adoption of logistical principles. Lastly, the adoption of total quality management (TQM) systems has made it clear to many companies that they needed to redesign their logistical systems in order to appropriately meet consumer demand. Other factors affecting that influence and adoption of logistics include consolidation of companies and increase human resource capabilities (Burda, 2015; Lin, 2007; Pagell,

This combined with the rise of market consolidation and the fact the logistics cost in the retail sector are higher than for manufacturing companies has raised the amount of pressure placed on each company to have their logistical operations operate efficiently. Today many retailers operate their own logistics networks and have their own distributions centers which channel a large percentage of the products they sale to the eventual customer. The authors discovered that there had been a lack of studies that explored the interdependencies between the in-store operations and the upstream supply chain activities of retailers. They set out to explore these relationships through the processes used in one particular retail category, grocery stores. To conduct this study they contacted the top thirty German, top ten Austrian, and top ten Swiss grocery retailers to seek the ability to conduct eighty minute long semi-structured interviews of their operations managers. This interview would then be followed by a short standardized survey. After conducting twenty-eight of these interviews, the authors were able to adequately analyze the logistics networks of these