[INFOGRAPHIC] Top Facts and Finances of the Global Logistics Market
You’ll learn in this infographic how the global market value for logistics has surpassed $4 trillion as well as:
- Interesting global logistics facts
- Each mode of transportation and its economic and financial outlook
- Who among countries are the top ranked in logistics performance (hint: United States has a high bar to meet)
- Why companies need efficient Logistics management
To begin, we will start with a general logistics overview, six rights of logistics, logistics origins and how expert logistics firms give a competitive edge when used for outsourcing.
Then we share the full infographic appears at the end further illustrating Global Logistics. Good logistics ensures that the right type of service or product is delivered in the correct time, place and condition expected. Economic and productivity growth are accelerated by logistics. A country’s competitive edge and general employment is greatly impacted by efficient logistics. The industry’s growth is now a key player in the economy after recent years of major worldwide economic activity.
Logistics is defined as a business-planning framework for the management of material, service, information and capital flows. It is also defined as the procurement, maintenance, distribution, and replacement of personnel and material. It encompasses increasingly complex communication, data, and control systems required by today’s business environment. Logistics frameworks consist of physical supply of goods and services, their distribution and internal business operations. Defining logistics for the customer is having the correct product or service at the agreed place, time in top quality condition. This process and buyer expectations of it are fully reliant upon efficient logistics.
Logistics: 6 Customer Rights
Buyer expectations define the purpose of a logistics system – it ensures the six rights of logistics, which are:
- the right product,
- in the right quantity,
- in the right condition,
- to the right place,
- at the right time,
- for the right cost.
The etymology of the word “logistics” is quickly connected to military and troop support related tasks. Logistics’ origins go far deeper historically, however. For 5,000 years, logistics have had a fundamental role in worldwide development.
Historically, brilliant logistics solutions have continually transitioned global societies to new economic progress. From the time of the pyramids’ construction in ancient Egypt, to today, the advancement of logistics has been remarkable. Some examples are the invention of the sea cargo container and the creation of novel service systems during the 20th century, many of which are still integral in today’s globalization. In WWII (1939-1945), logistics evolved greatly and the United States and its counterparts out-maneuvered Germany with efficient logistics. Serious damages of supply locations were inflicted upon Germany who was unable to parry effectively. The United States military provided supplies and services in the right time and place economically and optimally as possible to meet troop requirements. Several logistics techniques where born in the military and are used in advanced form in today’s logistics.
In just the last ten years, global logistics as an industry has grown significantly with Third Party Logistics (3PL) and Fourth Party Logistics (4PL) industry players. Their role will become increasingly vital in coming years. The global logistics industry’s high operational costs, low margins, talent shortages and bottlenecks in infrastructure along with growing client demand for one-stop solutions for every need all call for progressive technology investments. These realities mean further decreased margins and rampant consolidation through acquisitions, mergers and alliances. Just the past 18 months of industry acquisitions are staggering.
Competitive Advantages: Outsourcing Logistics/Supply Chain Functions (post first appeared on Choptank Transport here)
The rising use of third party logistics is leading to more outsourcing in areas such as transportation management. Businesses gain major competitive advantages with outsourcing which helps boost margins and expertise levels. Maintaining a supply chain is a necessity, not a goal, in today’s competitive marketplace. Instead of trying to do it all, companies are calling upon the right partners to supplement weak areas within their supply chains. Examples might be outsourcing in product assembly or by hiring a 3PL provider. Alleviating the internal burdens of your company to focus on strategic areas is far more satisfying than attempting to do it all in-house. A few top outsourcing considerations include:
- Reducing Costs – Good partners work to cut costs. One way is by buying bulk-rate materials. Another way is when 3PL providers provide needed access to the reliable contractors for truckload freight.
- Saving Time – By increasing expertise access for difficult supply chain steps, you will quickly gain the needed talent pool to meet your needs.
- Fast growth – When growth accelerates, outsourcing will offset the strain by removing hang-ups in your supply chain.
- Cut capital investments – Certain aspects of the supply chain can be extremely costly to implement in-house, such as purchasing manufacturing equipment or a fleet of trucks for transportation. Outsourcing often makes better financial sense.
- Increasing focus on strategy – By outsourcing problem areas, you also increase management’s focus on key initiatives like development of products and strategic analysis.
By doing research like analyzing your business’s core competencies, you can best ascertain which aspects of your supply chain will benefit most from outsourcing. The most common areas are raw material processing, manufacturing, assembly, support operations, warehouse storage, distribution and transportation. Partnering with a qualified 3PL provider quickly reduces costs and time spend – all while ensuring products are shipped promptly and safely.
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