Logistics Economic Impact - Assignment Example

The de-regulation considerably increased the importance of logistics because with relaxation on government control, the economy became more market-driven. It gave impetus to privatization and provided the transportation system with the flexibility to control prices. It is especially relevant for larger buyers of transportation services. They could reduce the cost of logistics by bargaining and reducing the number of carriers with a large amount of freight. It also facilitated businesses to expand their interests across geographical boundaries.

The five activities that are part of a company’s logistics department are:Procurement: It is getting the raw materials for manufacturing goods, components and other supplies which are needed for a firm’s operation.Transportation management: It refers to the management of transportation activities vis-à-vis material, service, information, capital flow. Customer service: Logistics is an integral part of customer services as it helps coordinates the activities so that the right customer gets his/her product at the right time and place.

Order Management: It is the management of goods and supplies which are ordered by customers. It incorporates all activities from placement of order to the time it reaches a customer.Inventory management: Logistics helps maintain inventory by influencing the cost in three ways: holding products, ordering new goods and being out of stock.