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Logistics call for a clear cut understanding of the total supply chain, the elements of which consist of packing, inventories, forwarding, freight, storage and handling. Logistics is accountable for all the movement that takes place within the organization whether it is inbound logistics of incoming, raw materials or movement within the organization or the physical distribution of finished products. Logistics is the delivery of the needed goods, at required place, at the required time, in the required state and to the required person efficiently and effectively
The basic logistics framework mainly consists of internal operations, physical supply and physical distribution of goods and services. Logistics is, in itself, a distinct system; it is an arrangement of related activities with the purpose of handling the orderly flow of material and personnel within the logistics channel.
Logistics is not limited to manufacturing operation alone. It is applicable to all enterprises, including government institutions such as schools, hospitals and service organization such as banks, retailers, and financial service organizations. The study of logistics is especially crucial for bulk raw materials, where extensive outflow of freight is involved. Management of logistics is an art, which is an extremely difficult.
The study of logistics is essential to establish a lean supply chain, which would give an advantage of speedy product change over, outstanding short and long term forecast visibility and JIT capability.
The transportation and logistics industry sector consists of a wide range of service providers, covering all means of transport – road, rail, air, sea – as well as related services such as handling, stevedoring, warehousing and finally value added services like, labeling, packaging, assembling etc. In addition to these 'physical' services, transportation and logistics include all sorts of organizational, planning and management services in the area of transportation and logistics. Over the past few years, we have seen a trend towards amalgamation, resulting in larger, integrated groups operating in more than one of the transportation and logistic sub-sectors. As a result, the limits between the transportation and logistic sub-sectors become more and more unclear.
Globalization and outsourcing of logistics services created substantial growth in revenue figures of the industry in the early part of the 21st century. However the economic downturn which first left its impression across the world in 2008 resulted in a dramatic drop in the sector’s growth in the year 2009. The industry was unexpectedly faced with some of the most difficult market situations in history. Liberalization and privatization are the prime points that are driving change in this complicated and rapidly changing sector. Additionally, trade routes are shifting and networks have become increasingly intricate. Regulatory and legal requirements have changed significantly in recent years. In an interconnected world, where organizations are operating across national boundaries and merged with many local partners; accounting and governance issues are becoming more compound, as is customs and tax compliance. Companies looking to build a long lasting business need to constantly offer added value. As business
models are being revolutionized in the industry, many companies are developing from forwarding and warehouse managing companies to superior industrialized, IT driven supply chain providers.
Article Source: http://www.everyonesarticles.com
Tir Bid is the author of this article on Cargo Shipping.
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