Reasons and Tendencies of Logistics Development

Reasons:

Competition Growth

Economy of Scale – decline of importance; small – series production can be more effective. “Moderate” growth of the firms, because non-optimal costs can not be covered anymore by mass production.

Research – 1% cost reduction in logistics equals 10% of sales growth.

Logistical costs account for 10-15% of the GNP.

Synergy effect – “mutual enhancing and support of system elements”

Developed countries – different organizations of logistics, associations, etc. In Europe – European Logistics Organization (coordination of logistics research). Periodicals – “Distribytcia i logistika” (Ukraine)

Logistics become not only management concept, but as a philosophy of management.

Ukraine – logistics is on fragmentary stage, the same in most countries. Pioneers in logistics in Ukr. – enterprises with foreign investments (if the foreign partner acts as a strategic investor).

Real development and growth – around 20 years.

Development of supply-chains

Supply-chains feed on data and depend on information sharing, especially in a global environment where speed of communication is of the essence and supply-chains grow ever more complex. Today all areas of logistics make use of information technology to process, tailor and deliver real-time information to when and where it is needed.

The ability to appraise and use IT packages and electronic communication methods has become a key competency for logistics managers, not least because, with the growing use of the Internet, the supply-chain is at the centre of some of the most exciting developments in telecommunications and electronic commerce - also known as e-commerce.

At almost every point, supply-chain operations will also have an impact on the environment. Companies must address questions such as: 'Is fuel consumption of the vehicle fleet being minimised?', 'Is the distribution centre energy efficient?', or 'Can packaging materials be reused or recycled?' The challenge is how to combine business development with a sustainable approach to the environment.

3.1. Logistics in Food Supply Systems

During the 1970^th and 1980s industry, trade and academia became heavily involved in the development of instruments primarily directed towards more effective planning and control of logistical operations.

Developments include: manufacturing resource planning and the just-in-time approach. Interest originated mainly from businesses concerned with production and /or assembly of semifinished and final products.

Attention – to planning and control of distribution operations, distribution resource planning, routing and location/allocation.

In the 1980s and 1990s these approaches began to be directed towards food supply chains and agri-chains in general.

Successful food chains – require that the crucial elements costs, quality and technology (incl. Information and communication) be taken into account. Also – the concept of multifunctionality – the environmental impact on production.

Aspects of agri-chains

Agri-chains – relatively high logistical costs involved and the high quality levels required. Logistical costs can account for 25-40% of the total added value, especially for ornamentals, meat, milk.

Log-l systems should not only operate cost effectively but also should be responsive and flexible. Cost effectiveness and flexibility issues – very complex task.

Agri-chains differ fundamentally from industrial production or assembly chains in a number of ways

- restricted quality life of primary, intermediate and final products. Therefore, storage technology and conditioning play a prominent role.

- large variation of quality, quantity and availability of primary products, due to regional and seasonable conditions, which require storage and transportation

- unintended and/or unwanted by-products, remainders and refuse (esp. from decomposition processes such as slaughtering, cheese making or potato processing)

- high turnover of volume products

- many suppliers of primary products, centralized marketing for only a few product groups

- substantial environment impacts on production, processing, distribution and consumption (packaging material, used product, surplus product)

- large public interest of organizations in all links of the chain (health and safety aspects of food, animal friendly production, environmentally friendly processing and distribution).

Date: 2014-12-22; view: 836