Logistics is becoming increasingly popular as a competitive weapon, among others, for firms to gain advantage in cost and services. Numerous factors have contributed to the development of logistics.
The development of information technology has enabled a transformation to take place in communication and data transmission, opening up markets and refocusing strategies in distribution and manufacturing outsourcing and assembly. It has no culture or language barriers, no time zones and is available continuously, bringing together the low-and high-labour cost nations and their skills for the exchange of goods and services.
Also, the globalization of markets with their infrastructure and international trade environment has generated business confidence internationally. A major contributor is the World Trade Organization. New markets have opened up in both the manufacturing and service industries. The decline of the freight forwarder has emerged as the mega container carriers develop in-house global logistics operations. A logistics network is demanded by satellite production. It is computer driven.
Shorter product lifecycle, driven by a fashion conscious international market and continuous technical advancement, favors logistic efficiency. Companies, particularly multinationals, are being driven by their logistics departments. Moreover, the multinationals now focus on a simultaneous global product launch across all markets to ensure an early cash return on capital expenditure rather than concentrating on a regional launch over a period of time, for example, phase one Europe, phase two North America and phase 3 the Far East. This favors the logistic operation. The ongoing technological developments providing a longer shelf life for many consumer products, especially foodstuffs, need a logistically based distribution.
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