International Logistics Issues - Essay Example

International Logistics The world economy has grown in recent years. International trade has been the motivating force behind it. But with the more recent technological developments as well as reduced trade blockades, growth in trade is definitely on the rise. Developing counties have also stepped on this bandwagon, extracting the best out of their own respective economies through trade internationally as well as locally - within the country. The integration of trade into the world economy has really proved helpful for the developing countries as they can promote economic growth, development as well as poverty reduction within themselves. World trade has been increasing at an average rate of six percent for the last 20 years, which is twice the rate of world output. The integration of the world economy with the help of trade has lifted the living standards of the people within these developing nations, which is a positive sign. However for the trade to occur in the first place, it is very significant to understand what goes behind to actually make supply chain management possible. Transportation of goods holds the key in this scenario. Also, sustained and consistent economic growth requires policies that can open trade and investment with the rest of the world. There is proof to it and it is that there has not been a single nation that has achieved economic stability without being open to the world for trade. International trade requires liberalization, i.e., openness to all and sundry within the world no matter what. The living standards are in direct proportion with them. Transportation holds the significance for connection between the channel members at the trading level as it swifts up the whole process of delivering goods from the manufacturer to the distributor who in turn does his best to provide the retailer with the goods after he stores the same for a while. In the end, at certain instances the retailers also give customers with the goods and products that they want through transportation service. There is a high need to promote and liberalize the manner in which trade is carried out within the world economy. It needs to be more generous to everyone and anyone as well as helpful for the developing nations so that more and more trade is carried out between the economic world markets. Agriculture is one such example of being more liberal for the international trade market. Trade liberalization proves very helpful for any country’s economy but it encompasses within itself some negative factors like the increased food insecurity. Before trade was made liberalized, say for a particular country, the agricultural activities mainly emphasized on the production from local market but now all sorts of food products seem to enter in the local arena, which really has an insecure effect on the local man. Transportation has got its due share in the firm’s success as it literally finds out what is the basic need of the customer for which the company is striving for day in day out. It then tackles this need problem by fastening up the whole process of providing products and goods to the retailers who in turn sell them to the end consumers and thus the company is well known for its fast operations and there is no lapse of service as well. It has to be a constant interactive process between the retailer and the company or at times between the company and the different intermediaries who are known as the channel members in this whole equation. In reality, transportation plays its vital role in forecasting, production planning and materials planning as it is the bridge for all these things to occur in the first place. If any of these supply chain processes need to occur and that too in a quick manner, the need of the hour is to devise ways and means through which the transportation amongst the channel members speeds up and this is only possible if there is goodwill and understanding between these parties who are at different levels of the trade structure. They have to comprehend that the other party will profit them and thus the whole transportation process would automatically fasten up as a result. One major perspective of the provision of transportation in the whole process of trade and supply management lies in the fact that the costs are drastically cut and there is a huge benefit for all the parties concerned and more than that the customers themselves as they are the ones who get the best value for money at the very end. If they receive a competing product with the same quality and value levels but at a low price, they will definitely go for it and make it their habit to buy it more and more and thus more usage would mean a lot of selling on the company’s part. This would reduce costs as well as improve customer service because then the company would think that if provides better value for money, people will throng the retailer for the goods offered by it and hence more sale will be made for it, both in the short term as well as the long run. In the end, it benefits both the parties – at the trade level and the customers who come back and forth to buy the products offered by the company who is swift in their day to day operations and has a better customer service than the competing brands or products for that matter. Logistics in the times of today is harming the whole atmosphere more than anything else. These include the cars, buses, trains, airplanes and just about everything that is moving and is a source of locomotion for people as well as goods. These vehicles and moving objects produce carbon dioxide in the atmosphere with which there is an alarming situation in the whole world. Already the issue of the hole in ozone layer has taken much debate all over the world and now since the population is increasing at a swift pace, different organizations and NGOs the world over need to step up and do their bit at reducing the carbon dioxide emissions in the open air. It has been brought to the notice of all and sundry with tremendous amounts of research owing to it that nearly 22% of all global emissions of carbon dioxide are courtesy the transport sector. This is an alarming rate, one which needs to be tackled with proper insight and planning. High level of service for the international logistic companies must focus on the aspects related with doing the things right rather than just devising what must be done. Onus should be on doing what exactly needs to be done for the betterment of the trade activities. They must build strong and solid relationships with the different channel members that include the distributors, wholesalers, retailers and other third party vendors. In doing so they ensure that they build strong rapport with them and all of them are linked in a web with each other. The support for each other stems from the fact that one party understands the concerns of the other one and hence tries to do its best to make the goods available as and when the need arises. Their logistical facilitation only helps each other and thus cost effectiveness is also achieved as a result of the same. The measurement process of these services could be ascertained from the fact that these services rely on more than one variable which are the essential ingredients of success. These variables need to be adjusted in line with each other in such a manner that the assistance is apparent for one and all in an easy and cohesive fashion. As for the examples of companies which have proper logistic activities set in the right manner include some of the biggest organizations like Unilever, P&G, Reckitt Benckiser, etc. The high levels of service that is employed within these organizations ensures that they know their work well and how to coordinate in a correct way with the channel members which is so very important since it has been seen at times that distribution is as and at times more significant than advertising because if the product is not available in the market, no matter how hard the marketing communications are, the result would be in the form of low sales figures. What these logistics companies need to do in such a situation is to evaluate their shortcoming and then work upon the very same with the help of its strengths and points which it considers assets. These are the areas which will eventually provide the appraisal for the logistics companies as they seek to build their respective businesses and also move ahead in a smooth and easy manner towards international markets and the like. Logistics companies must also set their specific houses on order so that the internal functions are carried out in a very easy manner and there are no ambiguities as such which could arise from the very same. In the end, it is important to realize that logistics companies must play their active role at the discernment of the supply chain activities and related measures since these form the basis for many a things to come in the future. The business aspects are clearly identifiable if there is clarity of purpose on the part of these logistics companies and also success is then part and parcel of their respective deliverables. All said and done, the companies should basically find their flaws and then address them in a manner which would improve their logistics processes both in the short term as well as the long run. BIBLIOGRAPHY BALDWIN, Laura H. (2002). Implementing Best Purchasing and Supply Management Practices: Lessons from Innovative Commercial Firms. Rand, pp. 27 COAKLEY, Robert W. (1955). Global Logistics and Strategy. Office of the Chief of Military History, pp. 213 HOEKSTRA, Thomas W. (2003). Supply-Side Sustainability. Columbia University Press LEVY, David L. (1995). International Sourcing and Supply Chain Stability. Journal of International Business Studies, Vol. 26 MENARCHIK, Douglas. (1993). Powerlift--Getting to Desert Storm: Strategic Transportation and Strategy in the New World Order. Praeger Publishers, pp. 137 PALEY, Norton. (2006). The Managers Guide to Competitive Marketing Strategies. Thorogood Word Count: 1,616 Read More