Potential of logistics
The flow of goods and services between the point of origin and the point of consumption in order to meet the requirements of customers is a branch of the science of management known as logistics. Information, transportation, inventory, warehousing, material handling, packaging and security are intertwined in this field of logistics.
The increasing complexity of supplying businesses with materials and shipping out products in an increasingly globalized supply chain results in a business concept of Logistics which evolved in the 1950s. It is defined as, “having the right item in the right quantity at the right time at the right place for the right price in the right condition to the right customer”, and is the science of process and incorporates all industry sectors.
Production logistics provides the means to achieve customer response and capital efficiency. It allows even a single customer’s demand to be fulfilled efficiently. Track and tracing, which is an essential part of production logistics—due to product safety and product reliability issues—is also gaining importance, especially in the automotive and medical industries.
Amongst the main problems affecting a developing nation’s economic progress is bureaucratic border-crossing procedures, corruption, unreliable and slow logistics services, as well as expensive and scarce warehouse capacity. Improved border operations, fewer bribes would reduce transit costs, lower prices for consumers of imports.
Logistics performance is strongly associated with trade expansion, export diversification, the ability to attract foreign direct investments and economic growth in general. Obviously, the nation’s economy improves with better transit. Thus logistics has the potential to improve the overall health of a nation’s economy.