Negative Issues in International Trade and Logistics - Essay Example

 The welfare of people is often ignored while trading internationally as the major focus is on profits. A minority section gains maximum profit through the procedure and is not even citizens of the exploited nation. This is observed mainly in third-world countries where people need to work under unfair conditions, with low wages, or in unhealthy work environments, demonstrating the negative aspects of international trade (Stephen, 2011). The other negative issues are exhaustion and destruction of natural resources. It can also be stated that international trade increases dependencies among nations and enables supplying nations to exercise more power and impose trade restrictions on other nations, simply to achieve financial gains.

Definition of Logistics

Logistics can be defined as the effective management of the procedure through which resources are acquired, moved to different locations, or stored as and when required. Logistics management encompasses the identification of potential distributors and suppliers, and even the evaluation of their effectiveness and accessibility to establish healthy relationships (Maloni and Benton, 2000).

Principal components of the logistic system

A logistic system comprises various components such as customer service, transportation, inventory management, materials handling, storage, information processing, packaging, production planning, production planning, demand forecasting, facility location, purchasing, and other related activities. These other activities for an organization can comprise service support, effective handling of goods returned, maintenance functions, and recycling operations (Fawcett and Magnan, 2002). A particular firm might not require all of the components to accomplish specific tasks. For instance, a service firm such as an airline encompasses elements such as maintenance, customer service, information processing, demand forecasting, and purchasing functions to reach the target customers (Lambert and Pohlen, 2001). On the contrary, consumer goods manufacturing firms would draw from inventory management, materials handling, transportation, packaging, and storage along with customer service, demand forecasting, and purchasing, about their logistics support (Gunasekaran, Patel, and Tirtiroglu, 2001).  The major goal of each of these components in the logistic system is to facilitate sustainable growth and development.

Logistic Design

The production facility which is located in Vietnam needs to possess a strong logistic network to reach dealers or customers in the EU. Firstly, suppliers or vendors will provide the required materials for production which will then be stored in a semi-finished or finished stage in the warehouse. It is further elaborated in figure1.

Figure 1: Integrated logistic design

As per figure1, after the goods are prepared and the order receipt is received, the goods will be dispatched through a viable transport medium. It would be easier and faster if goods are delivered via ports. Upon receiving the goods, an invoice receipt will be sent by the dealer and the goods will be stored in the dealer warehouse. From there it will be sent to various outlets to reach out to the end customers.