Logistics Clusters : Delivering Value And Driving Growth

4. Logistics is a critical part of a supply chain that is an integration of the logistics systems in all the organizations

During last two decades, the importance of logistics has been noticed around the world. In global markets, the effects and further developments of logistics and supply chain management for corporate success has increased significantly that result in a large amount of companies have taken actual benefits in logistics, such as reducing costs, enhancing customers ' satisfaction and increasing sales. However, some people are confused with the relationship between logistics and supply chain management. Therefore, this essay will argue that logistics management and supply chain management are not exactly the same in operations because of the scope where utilized and some specific activities are similar, but some are different. In the end, this essay will also talk about the reasons for logistics management is an important strategy to manufacturing or service companies.

International trade is defined by shipping commodities and finished goods between countries, including both exporting commodities and goods from the U.S. as well as importing commodities and goods from around the world. Logistics is the process of planning, implementing, and controlling the efficient flow of goods and services through the supply chain from producer to consumer. Distribution comprises all freight carriers (water, air, trucking, and intermodal) and warehousing. Until recently, most manufacturing organizations took responsibility for the warehousing

Our Supply Chain Consultant will work with client organizations to improve their supply chain and logistics performance, reducing their cost structure and\or improving their capabilities. These improvements are realized through initiatives involving strategic planning, process re-engineering, and/or information technology implementation. Our Consultant will execute a wide range of projects which include: logistics network design, facility (plant or warehouse) rationalization, plant and warehouse design, operational assessment, technology/software selection and solution implementation. Typical project tasks will include data gathering, data analysis, process mapping, defining requirements, current situation or baseline establishment, alternative scenario creation and analysis.

• Advanced warehouse and logistics solutions, including package management and support for both automated and complex delivery” (Lawson, 2012)

Due to the large quantity of freight and the long distance that it must travel to arrive to its destination exporters and importers alike have found logistic service providers essential to engage in international trade (Rodriguez, Comtois, Slack, 2013). While some Logistics service providers focus only on the area of transportation others specialize in freight consolidation, distribution management, and warehousing (Robinson, 2014). They have enough market knowledge, information and communication systems to offer supply chain solutions tailored to the specific needs of any company be it small or large (Rodriguez, Comtois, Slack,

Part A: Describe how you would design a new logistics network consisting of only a single warehouse.

Since the definition of supply chain management is, "the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer", it only makes sense then that placing each part of the supply chain in close proximity to one another makes for easier oversight. (Rouse, 2010) This is the basis for the clustering theory. (DeWitt, Giunipero, & Melton, 2006) Not just in theory, but in practice as well, clustering has proven to give those companies involved in a supply chain distinct competitive advantages via its

(Bowersox, D.J., Closs, D.J., and Cooper, M.B. (2010). Supply Chain Logistics Management. (3rd Edition) New York, NY: McGraw-Hill/Irwin.

The class text states that Supply chain management is frequently divided into supply chain planning applications, supply chain execution applications, logistics management, and warehouse management. Often when companies fail at implementing an efficient supply chain because of the planning section, or inaccurate demand forecasts. The text states electronic data interchange is one of the earliest uses of information technology for supply chain management, Electronic data interchange is the use of the Internet for everyday business transactions. “In this era of information a firm’s supply chain should operate at speed of thought and this is possible only by enhanced e-speed communications and information sharing with their critical partners.” (4)

The supply and distribution is focused on the use of advance technology such as GPS tracking and searching engines, which enables customers to locate firms. Also the supply chain focuses on creating value through interactive and engagement with other parties within the supply chain and the end user. Facilitating customer data is based on firms use customer data to identify them, tailor particular information to them etc.

The main focus is getting the right product and quantity delivered in the right condition to the right address at the right time to the right customer and most important at the right price. Process of transporting, warehousing, Logistics, 3PL/4PL and the Reverse logistic based on the premise of enhanced supply chain visibility through information and risk sharing, collaboration continues to simultaneously represent one of the biggest opportunities, and

Kazakhstan has 73 enterprises offering logistics-related services. These include multimodal transporters, customs brokers, integrated service providers, and freight forwarders. They can be categorized into express and courier companies, freight forwarders, and manufacturers and/or traders. Express and courier companies are mainly multinational corporations, such as DHL and Pony Express, whose representative offices liaise with overseas offices and oversee domestic distribution. They own warehousing facilities and run a fleet of trucks. For example, Pony Express owns a 4,000 sq m warehouse in Almaty and operates 30 vans for door-to-door deliveries. Each vehicle is equipped with global positioning system and satellite communications, allowing real time track and trace capabilities. However, this is more of an exception and not the norm for most transporters.

Transport plays a critical role in the supply chain and according to Bhattacharya et al. (2014) it is becoming one of the key components of the whole supply chain valuation for many organizations. Transportation is the movement of good from one location to another. Supply chain is a network of individuals, organizations, activities, resources and technology that is involved in formation and sale of a product, which is from the delivery of source materials from the supplier to the manufacturer, through to the end user. Hopkins (2007) states that supply chain professionals look at whole business procedures, which is from raw materials to manufacturing, wholesaling and retailing. And by

Forward logistics (or conventional logistics) is the regular distribution channel followed by the manufactures from time immemorial. Forward logistics concentrates on the products (goods or services) reaching the consumer end and deals with the line of flow from the manufacturer’s end to the consumer’s end. It deals with the very essence of Supply Chain Management and logistical activities of an organization. It has a significant impact on the primary operations carried out, which act as the basic revenue generating aspect of a business. In this logistical system, the flow is a “one-to-many” type and the forecasting or traceability is quite simple.