The Origin of the Concept of Logistics - Research Paper Example

?Marketing Table of Contents Introduction 3 Logistics- Defined 4 Impact on Supply Chain Management of a company 5 Conclusion 8 Reference List 10 Introduction The origin of the concept, Logistics, was noticed before the birth of Christ and was employed by the Greek generals (Leon, the Wise and Alexander, the Great) to procure food, ammunitions and clothing for their army. It has been noticed that for years, the concept of logistics had been an issue of war affairs. History has recorded which shows that what people wanted were not available or produced in the place of its consumption. These goods were not accessible even when they had the urge to consume them. The food and the commodities were dispersed widely and were also available in abundance, during certain times of the year. Earlier, people had the tendency to consume their choice of food or commodity at the location or after moving the goods to a preferred site and hoarding them for later use. However, the absence of well-developed storage and transportation systems had brought in difficulty for them to consume these goods. As a result, the movement of the goods was limited to an individual depending how he/she moves it. The main problem that was faced by them was the perishable nature of the goods, which forced them to gather the needful frequently. The restrictions faced by the people in storage and transportation had made them live in places closer to the source of production in order to facilitate easy consumption (Ferrell and Hartline, 2010). Thus, the concept of logistics was not prominent and proficient in those days because of its cost. The cost of logistics was quite high which therefore restricted the traders and the business to transport the goods and commodities from one place to another. It was a big problem for the mass to stay close to the source of the production since the traders or the business did not provide them with the facility of transportation of the goods to their homes. The concept of logistics would have eliminated these problems if it had been introduced and properly utilised then. The goals of the traders were to acquire higher productivity and earn good profits from their business and thus, they did not emphasise much on logistics (Dess, Lumpkin and Eisner, 2009). However today, with the passage of time, logistics have become the heart and the success of every business. It is used as the most important strategic weapon by the companies for transporting their goods from one part of the world to another, so that every person has the right to use or consume it. However, it can be noticed that today, in few areas, the production and consumption take place in the same geographic region. So that marks for an exception. There are striking examples that can be observed in different parts of the worlds like, South America, Australia, Asia and Africa. Here, the population resides in small, self-sufficient villages and most of the goods that are used by them are acquired or produced in a close proximity. Few essential goods are imported from other areas and thus, the production efficiency of the companies is low and the economic standards of living are not even noteworthy. In this type of an economy, a well-developed logistics system can bring positive changes to the exchange of goods among several countries (Dooley, et al., 2006). Logistics – Defined Logistics can be defined as the management of the flow of resources, which exists between the point of consumption and point of origin, for meeting the requirements of the corporations or the consumers. The resources that are managed in the logistics include materials, food, equipments, liquids and staffs as well as the abstract items like, information, particles, time and energy. The logistics of the items usually take into account the integration of flow of information, production, packaging, material handling, inventory, warehousing, transportation and also, security (Clifton, 2012). Business logistics is described as a “new field for integrated management study in comparison with the traditional fields of finance, marketing, and production” (Adler, 2010). It is also defined as the activities that are carried out by individuals during the year. The businesses are always preoccupied in transporting their goods from one place to another. The new concept in this field results from the co-ordinated management of related activities, rather than historical practice of managing them separately. The concept also adds value to the customers by providing them with satisfaction and fulfilling their exact needs (Cohen, 2004). Although the co-ordinated logistics management has recently come to prominence, but the idea had been observed to exist in the past during 1844 (Cherunilam, 2010). Impact on Supply Chain Management of a company Logistics can be defined as the important part of the supply chain process which implements, plans and controls effective and efficient storage and flow of services and related information to the point of consumption from the point of origin for meeting the requirements of the customers. Thus, it can be said that the flow of the products are to be managed from the point of raw materials to where they would be discarded finally. It is also apprehensive with the flow of goods and services where there is a good scope for further improvement (Campbell, 2009). Supply Chain Management (SCM) Supply chain management (SCM) has emerged in the recent years, which has captured the heart of the integrated logistics system and has even gone beyond it. Supply chain management had stressed on the logistics interactions which take place between the different functions of logistics, marketing and production inside a firm. Those interactions take place between individual firms separately within the same production flow channel. The opportunities for the customer services or cost improvement can be achieved through the collaboration and co-ordination among channel members. Here some vital supply chain activities are to be carried out in order to control the logistician. The early definitions like, materials management, physical distribution, industrial logistics and channel management are used for describing logistics. Thus, it has promoted the concept to a broader extent. There was little or no attempt for implementing logistics beyond the boundaries of the company or the internal logistics function of the company. Today, the retail firms have improved by sharing information with the suppliers. These suppliers in turn agree to maintain and manage the inventories of the retailers (Ahlstrom and Bruton, 2009). The product stock outs and the channel inventories are lower. The manufacturing firms have been operating under just-in-time production scheduling which builds the relationship with the suppliers, thereby providing with benefits to both the companies by reducing the inventories. The supply chain thus comprises of all activities that are connected with the transformation of the raw materials into end products along with the flow and delivery of the same to the recipients. The information and the materials flow both up and down the supply chain. Thus, supply chain management can be defined as the integration of the activities by improving the supply chain relationships for achieving the sustainable competitive advantage. Figure 1: Supply Chain Management (Source: Flamholtz and Randle, 2012) The model of supply chain management in Figure 1 is viewed as the pipeline which shows the scopes of the definitions that are attached to the logistics. . It is vital to underline that the supply chain management includes the co-ordination of the flow of products across the functions and the companies for achieving competitive advantage and the profitability for individuals in the supply chain. It also includes the supply chain members. It is very difficult to separate the supply chain management from the business logistics management. Thus, the companies often promote their mission as “to get the right goods or services to the right place at the right time” (Flamholtz and Randle, 2012) and also, in the exact condition which is demanded, thereby contributing largely to the success of the company. Strategic Alliances Successful alliances can be identified as a collaborative relationship that takes place between parties where new values and cultures are created. It does not only comprise of an exchange of relationship but it concentrates in adding value to the supply chain process. The alliance develops a sense of learning among the parties from each other and creates an interpersonal connection which enhances the success of the deal. The strategic alliances are achieved at five levels such as the strategic, tactical, operational, interpersonal and cultural integration. The levels are necessary for the fulfilment of any relationship in a supply chain (Hutt and Speh, 2009). It increases the close working relationship between the parties and helps in eradicating any miscommunication which is bound to happen in a big supply chain. Conclusion It can be concluded that the concept of logistics has changed from time to time. The importance of the same is also recognised by the companies. The companies now encourage the building of a strong logistic system as the part of the whole supply chain management. Therefore, it can be inferred from the above discussions that the companies have made strategies to improve their logistics system which forms the part of the supply chain management. However, in the past, the concept of logistics was viewed as the cost of conducting business and thus, was neglected to a great extent. Reference List Adler, M., 2010. A study of marketing and online marketing tools which improve online success. Munich: GRIN Verlag. Ahlstrom, D. and Bruton, G. D., 2009. International management: strategy and culture in the emerging world. Connecticut: Cengage Learning. Campbell, D., 2009. International joint ventures. AH Alphen Aan Den Rijn: Kluwer Law International Cherunilam, F., 2010. International business: Text and cases. New Delhi: PHI Learning. Clifton, B., 2012. Advanced web metrics with Google analytics. New Jersey: Wiley Publishing. Cohen, W. A., 2004. The art of the strategist: 10 essential principles for leading your company to victory. New York: AMACOM Div American Mgmt Assn. Dess, G., Lumpkin, G. T. and Eisner, A., 2009. Strategic Management: Text and Cases. 3rd ed. New York: McGraw-Hill Education. Dooley, D., Guy, P. Goymer, J., Richards, C. and Richards, N., 2006. BTEC National Business. Oxford: Heinemann. Ferrell, O. C. and Hartline, M. D., 2010. Marketing strategy. 5th ed. Connecticut: Cengage Learning. Flamholtz, E. G. and Randle, Y., 2012. Growing pains: Transitioning from an entrepreneurship to a professionally managed firm. 4th ed. New Jersey: John Wiley & Sons. Hutt, M. and Speh, T., 2009. 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