The importance to the study of logistics

1. Logistics and Transportation
Management
LOG141
Chapter one
Introduction to the study of
Management of Logistics and
Transportation
Dr Eman Mostafa
lecture(2)

2. This lecture will address the following points :
4- Reasons for the emergence of Logistics
5- The importance of logistics.
6- Logistics goals.
7- Stages of Logistics development
Logistics and transportation management

3. Forth Reasons for the emergence of Logistics
There are factors that helped the emergence of logistics in business, including:
1- Military experience
The concept of logistics appeared mainly in military organizations,
especially during the Second World War, which witnessed the largest
and most accurate military logistics operations, during which
thousands of equipment, soldiers and food were transported.
Logistics and transportation management

4. 2- The evolution of the concept of total cost analysis :
The concept of “the analysis of the elements of total logistics cost”
helped to mix the various logistics activities.
3- The evolution of the systems approach
The systems approach does not depend on specialization as
a basis for job formation, but rather depends in its formation on
the gathering of activities with strong linkages.
This approach contributed directly to gather the various
activities related to the process of material flow and placing
them within a unified administrative framework, which is the
framework for logistics
Logistics and transportation management

5. 4-The change of Consumption patterns
Consumers are demanding multiple types of goods, which led to an
increase in the number of alternative products to serve the same
demand and thus increase the volume of inventory.
5-Paying attention to the levels of service provided to the consumer;
This interest led to the direction of the marketing and
production activities towards the logistics system to provide
the best level of service at the lowest total cost.
Logistics and transportation management

6. 6- Attention to the organization of distribution channels
Studies have focused on distribution channels and related concepts of
time, place and degree of risk which helped to shed light on the
importance of gathering efforts related to the flow of various goods to
and from the organization..………,mm…..
Logistics and transportation management
The economic revolution and the information technology revolution The emergence of globalization and

7. 7-The economic and the information technology revolution
The emergence of globalization and the liberalization of trade helped
to fade the idea of ​​convergence of places of production and
consumption, as logistics appeared to bridge this gap.
Advances in information technology have helped integrate logistics
activities and achieve savings in supply and distribution costs.
8- Professional Logistics associations and magazines
Logistics associations and magazines contributed to the development
of logistics and clarify the official nature of it.
Logistics and transportation management

8. Fifth- The importance of logistics.
Interest in logistical activities in business organizations did not
appear until its cost began to increase significantly, and when
management in these organizations realized that the way
towards strengthening the competitive position, achieving
competitive advantage and increasing profits, starts by
reducing costs through customer service.
The importance of logistics is due to several reasons, including:
Logistics and transportation management

9. 1-Considerations of high cost:
Logistics activities are very important at the economic level.
statistics indicate that 19% of the national income in the United
States invests in logistical activities, and that these activities
use about 13% of the work force.
Among these activities is the transportation activity, as the
statistics indicate that the costs of transportation Logistics are
about 5% of global production, or about 2000 billion dollar.
Logistics and transportation management

10. 2-The length of the supply and distribution lines:
The trend towards globalization in the industry, as well as the interest
In international marketing, has become dependent, to a large extent,
on logistical performance. The interest with logistical activities has
increased within each business organization, especially those
multinational companies or large-sized companies whose production
is not limited to the local markets, due to the cost of long supply and
distribution lines.
Logistics and transportation management

11. 3-The role of Logistics in strategy:
companies spend a lot of time and effort in finding ways that can
distinguish its products from other competitors.
The differentiation strategy especially in cost (product prices)
depends, to a large extent, on the good performance of the business
logistics in terms of cost and customer service. Companies that have
succeeded in realizing excellence in The logistic service is able to
build a preferential advantage over its competitors, by helping the
organization to expand its market share and the profitability of the
organization.
Logistics and transportation management

12. 4-Logistics adds significant value :
When the organization makes distinguished efforts in order to provide
products or services to its present and potential customers at the
appropriate time and place by logistical activities such as storage,
transportation, etc., as this will increase the value added to these
products or services from the customers 'point of view.
The customer’s satisfaction depends mainly on providing products
that flow through various logistical activities.
Logistics and transportation management

13. 5-The growing need of customers for an appropriate and prompt
response:
the success of home delivery, the spread of automated teller machines,
and the demand for The use of the Internet and e-mail in recent years has
made customers expect to get their goods and services in a short time.
In addition, Information systems, automated manufacturing processes,
flexibility in production , helped organizations To achieve high-volume
production, as well as high-volume marketing.
In light of all this, logistics activities have become of particular
importance, through facilitating a quick response to customers by
providing goods and services that conform with customers’ needs and
desires, and which depend on the flow of information, packaging,
transportation, warehousing and others.
Logistics and transportation management