Logistics Essay Example | Topics and Well Written Essays - 3000 words

Logistics - Essay Example Defined as "the management of product and information flows from original source to final customer in a manner which adds value to the external customer," (Baudin 2005, p. 5) logistics represents a key bundle of resources that can be applied successfully to the task of providing best net value for the customer (see Appendix table 1). Following Naylor (2002), the first is that of the logistics concept itself, and the proposition that it represents a comprehensive process that is of strategic importance as well as boundary-spanning in terms of significance. Second, global logistics systems provide unique and meaningful opportunities to create customer value. Third, a number of contemporary tools and approaches validate and facilitate the effectiveness of logistics to the task of value creation. Fourth, logistics is well positioned to take advantage of the new strategic management process. In fact, there is considerable justification to think of logistics as one of the key strategic sys tems responsible for providing certain customer-valued products and services. Intermediaries are often defined as a third party logistics which means â€Å"the use of an outside company to perform all or part pf a firm’s materials management and product destinations function† (Simchi-Levi et al 2008, p. 249). The main benefits of the intermediaries are (1) lower total cost (through logistics improvements), (2) faster response to changing volume needs (through the closer location), and (3) faster provision of technical consulting help (Stroh, 2006). They have also implemented the process changes enhancing value to be delivered to the customer and reducing sacrifice. Similarly, manufacturing decisions that appear to reduce cost may in fact be unwise from a global system perspective. Product in long runs or delaying a switchover may reduce efficiencies and unit costs. As a result, revenue can be lost owing to the