Page 169 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

International Trade Procedures and Documentation

Notes Information flow is an important element of logistics operations. Paper-based information flow
increases both operating cost and decreases customer satisfaction. Electronic information
movement and management provide the opportunity to reduce logistics expense through
increased coordination and to enhance service by offering better information to customers.
Information flow was often overlooked because it was not viewed as being important to
customers. The Council of Logistics Management recognized this change in 1988 when it
incorporated “material, in-process, finished goods and information” into its definition of logistics.

Transportation is a key activity in the logistics value chain as it moves product through the
different stages of production and finally to consumer. The important functions include – product
movement, product storage and integration of international production and distribution
operations. The major transportation principles involve economies of scale and economies of
distance.

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Caution The distribution systems should not be designed to hold inventory for an excessive
length of time, though there are occasions when inventory storage is justified.
The traditional warehousing role has been to maintain a supply of goods to protect against
uncertainty, contemporary warehousing offers many other value-added services. These services
can be described in terms of economic and service benefits. Economic benefits include
consolidation, break bulk and cross-dock, processing/postponement, and stockpiling. Service
benefits include spot stocking, assortment, mixing, product support and market presence.
The handling of products is an important factor in warehouse productivity. Handling activities
include receiving, in-storage handling and shipping. Packaging has a significant impact on the
cost and productivity of the logistical system. An integrated logistics approach to packaging
operations can yield dramatic savings.

7.6.1 Marketing Mix

A marketing mix is a combination of activities designed to attract customers while simultaneously
achieving business goals. The four Ps–products/service, promotion, price, and place – constitute
a generic marketing mix. The key to formulating an effective mix strategy is to integrate resources
committed to these activities into an effort that maximizes customer impact. Logistics ensures
that customer requirements involved in timing and location of inventory and other related
services are satisfactorily performed. The output of logistical performance is customer service.
Logistical competence is a tangible way to attract customers who place importance on time and
place-related performance.

Logistics interface with marketing and the system elements brings out the depth of the scope of
logistics in the efficient functioning of any business entity. The key to excellent logistics is to
achieve integration of both internal and external operations. Such integration requires clear
identification concerning the role that logistical competency is expected to play in overall firms
strategy.

Important Factors

The important factors involved in efficient and effective logistics system are:
1. Shippers
2. Suppliers

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