Logistics Is an Important Activity for Every Business - Essay Example

?Introduction Logistics is an important activity to every business nowadays for it has the ability to plan and manage the flow of information and materials within the organization in order to give modified product delivery at a high velocity to all stakeholders. According to Ghiani and Musmanno (2004, p.1), “its mission is to get the right materials to the right place at the right time, while optimizing a given performance measure (e.g. minimizing total operating costs) and satisfying a given set of constraints (e.g. budge constraint).” Businesses of today in either perspective (business or consumer) markets have realized that in order for them to remain competitive, they need to have an easy access of current information and clear communication. In order for this competitive edge to become stable, steady, and maintained, businesses need to have a support and reverse system that is called the electronic logistics or e-logistics. However, maintaining this system is not easy for this involves billions of dollars, yet they have no other option but to take advantage with the benefits and outweigh the liabilities. Based, on the study of Lambert and Burduroglu (2000), the amount spent for logistics is worth the price because customers’ satisfaction will increase the value added services of companies and they are also rewarded by their customers with a large increase in the volume of demand. The main purpose of this paper is to give an overview of e-logistics, identify its emergence, and distinguish. Overview of e-logistics According to Sarkis, et al. (2004), “Organization realizes that a strong supporting logistics or electronic logistics (e-logistics) function is an important organizational offering from both the commercial and the consumer perspective.” A typical supply chain usually involved materials and information that includes operational logistics such as inbound and outbound logistics. In the study of Auramo, et al. (2002, p.528), it is stated that information, supply network and material flows are necessary in order to have a successful implementation of e-logistics. “The role of logistics in e-commerce has garnered the lion’s share of the focus on the success or failure of Internet-based companies” (Sarkis, et al., 2002, p.35). It is not enough for a business to have an online delivery information portal because what customers want is to have the products or services be delivered in an efficient, timely, and accurate manner. The overview of logistics has something to do with the marketing effort of the business in order to come up with a sound and pleasant decisions and activities (Bowersox, Mentzer, & Speh 1995). Emergence of e-logistics Advancement in information technology and communication are among the important factors that made e-commerce and e-logistics more successful for these are the carriers used in the delivery of information. The increasing number of companies that are now using these advance technologies had made a growth in e-commerce, and as a result, operating costs had also increased. This scenario is brought by globalization and the growing array of logistic options, and in order for companies to remain competitive, they have to focus on the development of physical material flow or physical logistics while continuously amending customer service (Thomas & Griffin, 1996). The traditional logistic functions that involved the activities of transporting, transshipment, and storage are part of the physical logistic activities which has been changed since the adoption of e-logistics (Alt & Zbornik, 2002, p.723). Improving physical logistics has become complicated and consequently formed a new logistics system called e-logistics. The emergence of e-logistics had changed the virtual image of transporting, transshipment, and storage of information and materials, and it also managed to meet end-users expectations from manufacturers. For example, the emergence had helped Pfizer Pharmaceutical Corporation in the distribution of their medical products or medicines in the global market. The company has a wide range of products to be distributed in 150 countries in the world, and they need to deliver these products based on the demand of their end-users. For this reason, Pfizer decided to restructure their distribution operations using a third-party logistics service provider in order for them to have efficient distribution operations (Pesic, 2010). In other case, Volvo Logistics Corporation (VLC) is the third party logistic company of Volvo Group in terms of finding external customers. The e-logistics process of Volvo involved packing, inbound, and outbound activities, and gradually the corporation find the process helpful to the company and their consumers as well (Anghelitu & Costea, 2010, p.5). This system is a two-way communication and it has been used by large companies nowadays because it provides vendors with historical data and communicates the orders directly to the production department of the business (Dunne & Lusch, 2008, p.143). Distinguish e-logistics The use of technologies such as the Internet or the World Wide Web in the execution process of physical logistic activities is called e-logistics (Alt & Zbornik, 2002, p.719). However, according to Auramo, et al. (2002), aside from these technologies, professional skills are also important in order to have a successful integration process. These physical activities involved the delivery and carrier selection, tracking and tracing, and transportation. The traditional logistics has been changed to e-logistics in order to address the growing concern of the commercial world, and to accommodate dynamic changes of demand and preferences of customers from all over the world. Based on the study of Angheluta and Costea (2010), it has been discovered that e-logistics can be distinguished as a network creating value process that would create better supply chain and competitive advantage during global financial crisis. The main difference between traditional and e-logistics is that the traditional caters high volume of demand while e-logistics are parcel because their customers are unknown and they are highly scattered from any destinations. The goal of e-logistics is to maximize their performance in terms of delivery and at the same time minimized their costs through planning and scheduling. Traditional logistics gives specific period of delivery to their customers while in e-logistics, customers have the right to demand for a fast speedy delivery that is flexible and convenience at all times. Conclusion The role of e-logistics in this modern society is very important. They serve as a bridge within and between the manufacturers and the end-users for them to have a long-term relationship. Traditional logistics is not applicable in times of globalization wherein customers are more sophisticated and more demanding in terms of product delivery. And to address this growing concern among customers, companies need to restructure their logistic process into a more specific and flexible supply chain operation in order to be competitive. This is definitely the reason why e-logistics emerged. References Anghelitu, A. Costea, C., 2010. Utilization of e-logistics in multinational companies to overcome difficulties of today’s economic environment. 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