Business Today – A Paradigm Shift
In the New Millennium
Globalization is integrating more and more national with the global economy.
World Trade is expanding at an exponential rate.
Technologies are advancing and becoming integrating force.
Customers are demanding value for money.
Marketers are experiencing competitive pressure.
Businesses are struggling not just for growth but even for survival.
These conditions has forced business organizations the world over to reevaluate their business process and the way they are delivering products and services to their customers.
Intense competition and proliferation of a variety of products and services has resulted in volatile markets, hence, it has become necessary for organizations to manage uncertainty.
Business firms across the world have started looking beyond organizational boundaries. For what?
5) Relationship With customers to manage Inventory.
Today, in order to survive and remain profitable not only manufacturing organizations, but, trading companies all over the world are also concentrating on their core competencies and outsourcing peripheral processes and intermediate products.
Today, products are sourced form different parts of the world, assembled at different locations, and shipped to various destinations to ensure greater customer satisfaction.
These trends have resulted in numerous marketing opportunities across the globe.
The pursuit of growth and the need to access new markets have been propelling companies all over the world to search for sustainable competitive advantage.
As a result, the have become customer driven. That is, business firms are now focused towards achieving customer satisfaction.
In today’s, customer driven market oriented economies, business firms cannot afford to ignore the critical role of logistics management. If ignored it will probably be destructive for the business forms, not only in terms of its growth but even for its very survival.
Origin of the Word – Logistics
The English word logistics appears to have been derived from both the Greek Word logistikos and the French word logistique.
Logistikos is rooted in the concept of logic and means skilled in calculation.
Logistique is influenced by the French word loger meaning ‘to quarter (or lodge) soldiers.
Hence, the combination of logic, calculation, and quartering soldiers appears to have yielded the word.
The term logistics entered military terminology in the 18th century.
The term logistics was first employed in a formal sense in the American lexicon in the late 19th century.
The term received a written definition in q905 as that branch of the art of war pertaining to the movement and supply of armies.
But, it was not until World War II that the term began to be used pervasively co describe the movement and supply of armies, supplies of food and armaments to the war front.
The term logistics migrated to the business sector in the 1960s as academicians in marketing saw potential in applying the principles of military logistics to physical distribution of consumer goods.
More recently, the business community began viewing logistics as a component of a larger evolving concept, supply chain management.
Supply chain management is linking of all firms up and down the supply chain in a collaborative and seemless network.
Beginning in the 1970s, the term logistics crept into the lexicon of the common culture.
The word is not being used with regard to the supply support of activities from church picnics to the Olympics.
During the US famine relief efforts in Bangladesh in 1973 and in Somalia in 1992 and 1993, logistics was applied to the distribution of food.
Logistics Planning – The wisdom to realize when working on plan A, you’ll run into confilicts in executing plan Band being properly prepared, and successfully executing plan E.
- Capt. John P. lavaerdure, Scott air Force Base, HQ Air Mobility Command, 1996]
Logistics… in the broadest sense, the three big M’s of warfare – material, and maintenance. If international politics is ‘the art of the possible.’ And war is its instrument, logistics is the art of defining and extending the possible. It provides the substance that physically permits an army to live and move and its being.
- James A. Huston, The sinews of war: Army logistics, 1775 – 1953, 1966
Logistics is the “practical art of moving armies.”
- Genera; Antoine Henri Jomini
Logistics comprises the means and arrangements which work out the plans of strategy and tactics. Strategy
Decides where to act; logistics brings the troops to this point.
-General Antoine Henri Jomini. Precis de L’Art de la Guerre (The Art of War). 1838
What Logistics Management is About?
Every organization delivers products to its customers. Traditionally, we have decribed these products as either goods or services. Today, every product is really a complex package that contains both goods and services.
Car Manufacturers sell not only products but also give services through warranties, after sales service, repairs and finance packages.
It is more accurate to describe products as lying on the spectrum. At one end of this spectrum are products that are predominantly goods, such as cars and domestic hospitals, insurance organizations and education.
DEFINING THE WORD: MATERIALS
Materials are all the things that an organization moves to create its products. These materials can be both tangible (such as taw materials ) and intangible (such as information)