Page 160 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

Unit 7: Logistics and Characteristics of Modes of Transportation

The benefits of such a system are: Notes
Inventory Reduction
Speedier Response

Lower number of stock-out situations
Reduced Handling
Reduction in Obsolescence

Contribution towards Business Excellence

About two decades back, Logistics Function was one of the neglected areas. It was looked at as
a Cost Center. Not many organizations managed this function in a profession way. Gradually,
the situations changed. With customer becoming more and more demanding, organizations
realized the importance of this function and the role played by it in meeting the customers’
expectations.
Logistics primarily embodies the effort to deliver:

The right product
In the right quantity
In the right condition
To the right place

At the right time
For the right customer
At the right cost

Task What role is played by logistics towards business excellence?

7.3 Benefits of Efficient Logistics System

Logistics has gained importance due to the following trends:
1. Transportation costs have risen rapidly due to the rise in oil prices
2. Production efficiency has scaled new heights
3. Fundamental changes in inventory
4. Proliferating product lines
5. Computer technology
6. Increased use of computers
7. Increase in public concern about the product. Growth of several new, large retail chains or
mass merchandise with large demands and very sophisticated logistics services, bypassing
traditional channels and distribution
8. Economic regulation reduction
9. Increase in power of retailers
10. Globalization

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