Importance of Logistics and Supply Chain Management and What Strategies and Planning Used for It

Topics: Supply chain management, Logistics, Management Pages: 2 (584 words) Published: December 3, 2012
Importance of logistics and supply chain management

Even as companies have learnt to squeeze efficiencies out of their manufacturing plants through concepts like just in time replenishment, statistical process control, and lean manufacturing practices, they still find that moving goods and services through several layers of their global supply chains is time consuming and costly. Logistics and supply chain management has become one of the last frontiers that still remain to be conquered by most businesses in the twenty first century. Yet this cannot be done unless all managers and supervisors, irrespective of their functional orientation and current job responsibilities, fundamentally understand their supply chains and how their effective functioning flows right down to the bottom line.

Since today it is not uncommon to see companies develop a product in one country, manufacture it in another, and sell it to a third country, the complexities associated with global trade must be accounted for in designing and managing supply chain. In addition, new products could be introduced in several countries almost simultaneously, and suppliers with special expertise and technology could collaborate with manufacturers in different countries to create global products. As the world moves toward an international economy, the battle cry for corporations is increasingly becoming one of “global operations and supply chain management”. While globalization promises enormous strategic benefits by coordinating operations located in different countries, it is imperative for managers to develop a perspective that can fully understand and exploit the intricacies of the global marketplace. Managing manufacturing and service operations across cultural, economic, and political boundaries is a formidable challenge, because of which many globalization efforts are falling far short of their promise.

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