Logistic is a process that involves the planned movement of goods from the original source to the final destination safely in a cost effective manner. Logistics involves various distribution channels, warehouse and transportation services. The logistic chain involves the chain of events and activities that a company is involved with to achieve it logistic service rendering. The logistic chain in many cases differs in size depending on the company decision. This essay discusses the various logistic and distribution channel on a global scale.
In short, all the activities in a logistic chain are important. The success of a logistic chain depends on delivering the right product, at the right time, in the right place and at the right cost. The best definition of global logistic, which says that it is the flow control of a material in a company across country boundaries in a cost effective way, gives the emphasis on the need to ensure that the cost of the whole process is optimal. Different from logistic but very close in meaning is the material management, which entails the inflow and outflow of materials through a company in general. Distribution on the other hand is also not very different from logistics. Distribution is the process by which a company ensures its final product reaches the end user. In the process of distribution,the various activities involved include warehousing, taking inventory, entry, storage and transportation. In the middle of the logistic chain is the sourcing strategy. Sourcing strategy is the operation of the company that links the material management and the distribution channel. The activities that refer to sourcing strategy involve operational management and R&D operations such as engineering that takes place in the industry. The sourcing strategy also involves activities such as marketing, advertising and staffing(Klabusayová 274-279).
All the three activities in a logistic chain management must be tended to with absolute surety. The most important activities that a new and upcoming logistic company should focus on is the strategic function. Most of the time even if a company has come up with a new product that is better compared to what is already in the market it may be hard to break even in the market. Most consumers are diversified unlike distributors who most of the time are specialized. Consumers will find it easier and wise to buy products that are easily available in a nearby local retailer than order goods from a factory mile away from where they are.Most retailer and wholesalers on the other hand prefer to stoke goods that have been in the market and have a big customer base to reduce their risk. Most wholesalers will not stock on their shelves goods that are new in the market easily. It is therefore the responsibility of the manufacturing company to play the role of strategic function well. When a company has a new product it should do a thorough market research and diversified marketing strategy to ensure physical movement of their products.
In conclusion, global logistic chains and distribution chain are related and should be carried out efficiently for success of any business. Logistic chain as seen has three main activities that are physical movement of materials, strategic functioning and finally distribution. For a new entry in to the market, the most essential part of the process is the strategic functioning.
Klabusayová, Naděžda. “Support Of Logistic Processes In Modern Retail Chain Warehouse”. AMM 309 (2013): 274-279. Web.