Supply Chain Management and Logistics

Abstract

In the 1950's the term logistics emerged in civilian life (it was previously a militaristic term), as a specific approach of logistics companies (i.e.users of logistics services -companies) to monitoring the flow and costs, as well as logistics facilities (goods) from their origin through to the final consumption.The analysis of logistics phenomena is a specific approach to analysing the operating costs of production, trade and other organizations; additionally, logistical criteria are very suitable for analytical methods used in the evaluation of economic investments (Zupančič, 1998). Records of large,but not yet sufficiently exploited potential of logistics date back in the sixties, when the global manager guru Peter Drucker said that logistics was one of the last frontiers for the potential increase of effectiveness in the firm (Lambert & Stock, 1993).Even greater emphasis was placed on logistics in the seventies and early eighties, during the so-called oil crisis, which in turn led to rising energy prices.After this, logistics costs were paid much attention, due to the globalization of industry.Logistics was affected in two ways thereof; firstly, the global enterprises began to consider ways of differentiating their offerings of organization, products and services.Logistics became an area in which the local organizations needed to achieve a competitive advantage against overseas organizations, so that they could offer reliable and responsible servicing on the market.On the other hand, entering foreign markets entailed longer, costlier and more complex operations.Good management of logistics processes, therefore, was the tool for the achievement of global opportunities.Later a period followed in which the organizations, because of an increasing competition, started to become more aware of the importance of cost reduction and of operating efficiency.This period coincides with the expansion of information technology, which contributed much to the aforementioned objective, i.e. the cost reduction.Thus, it was easier for organizations to control the whole process of business and logistics activities, such as procurement, transportation and material flows in general; the transparency of stocks was greater and at the same time they started to consider a variety of different mathematical models.In this way, it was easier to plan activities, and ultimately, the first "Just in time" deliveries were made.At the same time, the concept of logistics began being understood as an integrative part of supply chain management, which is also the concept applied in this book.

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