The document discusses the role of global logistics in international trade. It states that global logistics ties essential supply chain elements from production to consumption to ensure timely delivery of goods. Key factors in global logistics are time, cost and efficiency. Location is also important as distribution centers and transport hubs need to be situated close to transportation routes and urban centers. The three main modes of transportation discussed are land, sea and air, with sea and air often being preferred depending on price, urgency and destination. Effective logistics is important for countries' economic growth and productivity in both foreign and domestic trade.
The document discusses the role of global logistics in international trade. It states that global logistics ties essential supply chain elements from production to consumption to ensure timely delivery of goods. Key factors in global logistics are time, cost and efficiency. Location is also important as distribution centers and transport hubs need to be situated close to transportation routes and urban centers. The three main modes of transportation discussed are land, sea and air, with sea and air often being preferred depending on price, urgency and destination. Effective logistics is important for countries' economic growth and productivity in both foreign and domestic trade.
The document discusses the role of global logistics in international trade. It states that global logistics ties essential supply chain elements from production to consumption to ensure timely delivery of goods. Key factors in global logistics are time, cost and efficiency. Location is also important as distribution centers and transport hubs need to be situated close to transportation routes and urban centers. The three main modes of transportation discussed are land, sea and air, with sea and air often being preferred depending on price, urgency and destination. Effective logistics is important for countries' economic growth and productivity in both foreign and domestic trade.
The document discusses the role of global logistics in international trade. It states that global logistics ties essential supply chain elements from production to consumption to ensure timely delivery of goods. Key factors in global logistics are time, cost and efficiency. Location is also important as distribution centers and transport hubs need to be situated close to transportation routes and urban centers. The three main modes of transportation discussed are land, sea and air, with sea and air often being preferred depending on price, urgency and destination. Effective logistics is important for countries' economic growth and productivity in both foreign and domestic trade.
Learning Outcomes: Importance of Global Logistic in International Trade.
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I declare that this Assignment is our individual work. I have not copied it from any other student’s work or from any other source except where due acknowledgement is made explicitly in the text, nor has any part been written for me by any other person.
Student signature: Winnie Stella
Prerana Rout
Shipra Tyagi
Sachin Katoch
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Logistics and Supply Chain
Management OPR 505
TOPIC: Role of Global Logistics in wheeling International Trade
1|Page CONTENTS I. INTRODUCTION………………………………………………………………………. 03 1.1 Role of Global Logistics……………………………………………………………………... 05 1.2 Transportation…………………………………………………………………………………... 06 II. KEY ISSUES WITH GLOBAL LOGISTICS IN INTERNATIONAL TRADE…………………………………………………………………………………………………07 III. SOLUTIONS………………………………………………………………………………….. 08 3.1 Tips to Create an Effective Logistics Strategy……………………………………….... 09 IV. CONCLUSION……………………………………………………………………………….. 10 V. REFERENCE……………………………………………………………………………………11
2|Page I. INTRODUCTION
An effective logistical framework for transportation and trade is a prerequisite for sustained economic growth for every nation in the world. That is the more essential, in particular, for an emerging economy like India, which the transactional cost of doing business in the area is one of the highest. The key reasons for high transactional costs in foreign trade in India weak logistics infrastructure in India, poor logistics management in India practices, and lower use of logistical operations of technology. Logistical benefits and an effective transport system also play an important role. Major role in fostering backward growth regions, like hinterland countries, lead to successful economic efficiency and integration into the mainstream economy of such areas by opening them up investments and commerce.
An effective transport network, including an efficient transport network, in a liberalized set-up digital as well as physical facilities and overall changes the more effective the country's logistics system becomes, the more essential in order to increase productivity and to boost productivity the economy's success in the world market. Globalization has helped to do business outside national borders and, in a real sense, the planet has become a global village. The Internet has made it easy to do business all over the world. Cargo movements need to be conducted physically, using the means of transport available. Speed & quality are more focused on the transportation of products. It is necessary to physically transfer freight, to intermediate freight forwarders, to custom house.
3|Page Globalization of international commerce and convergence of transport logistics has now become a general direction and an important theme of the growth of the world economy since the advent of modern times. More and more funding and focus has also been paying to the growth of the logistics industry, not just that it is a kind of specialised management strategy or a means of organising on its own. With the in-depth progress of change and opening up, and the increasingly rapid pattern of economic globalisation and internationalisation of trade, international trade, which is like the near relation between China and the rest of the world, has generated a certain influence on China's and the world's economic development and is also subtly becoming the centre and focus of global economic rivalry. The international logistics and international exchange joint is a kind of development status as well as a development status in our own day. Via economic globalisation and the introduction of information technology, several countries have adopted international commercial exchange and international business services to achieve the maximisation of the economic gain and effectiveness of the international trade industry.
In recent years, the province of Shandong has attached
considerable importance to the growth of international trade, in particular international logistics, both of which bring tremendous investment and cultivation, either in the building of logistics infrastructure or in technological advancement in logistics. Some results have also been accomplished by the province of Shandong in the constant consumption of the logistics system, moving forward the market-based logistics mechanism and the electronization of the logistics industry.
The restructuring of Shandong Province's foreign exchange has grown rapidly after the complete introduction of the five-year plan for 2011 to 2015, modifying framework, improving economic growth methodology. In 2011, the overall import and export value of Shandong province first broke the $200 billion mark, totalling $235.87 billion, with a year-on-year increase of 24.7, hailing it as a "milestone" for Shandong province's foreign trade. At the same time, Shandong, whose foreign logistics industry retains its steady and rapid growth, is one of the China's established
4|Page province The Shandong Province logistics market has been growing steadily since the "Twelve Five-Year" strategy. And that number accounts for 6.5 percent of regional GDP and 14.9 percent of the third sector's share. Its steady growth model protects the progress of Shandong province's foreign trade, playing a crucial role in promoting and safeguarding it. And with growing attention paid to the logistics industry, Shandong Province has made significant progress either in the building of infrastructure and the growth of industrial ties or in the development of international trade and logistics knowledge processes.
1.1 ROLE OF GLOBAL LOGISTICS
Global logistics ties essential supply chain elements from the point of production of a product to the point of consumption to ensure timely and reliable delivery of products from suppliers to customers. According to the World Trade Organisation, the total volume of goods trading was $16 trillion in 2016. This worldwide movement of merchandise is supported by the multinational logistics sector.
Global logistics is the method of controlling the movement of commodities through the supply chain, primarily a science but also an art, from the place where they are manufactured to the place where they are consumed. It could include shipping seeds and fertiliser to a grain farmer, sending harvested grain to a manufacturing plant, delivering meal to an industrial bakery, sending containers full of bread loaves to a distributor. Global logistics includes the transportation of goods in distribution centres and other logistics real estate facilities, by bus, rail, aeroplane, or aircraft, as well as planning, packing and storing of goods.
In global logistics, growth is driven by three fundamental trends: Rising consumption, the e- commerce and continuing supply chain reconfiguration to transfer goods quicker and more effectively. The continuing intensity of these world-wide developments suggests that global logistics will continue to play a vital role in the global economy.
In global logistics, time, expense and efficiency are main factors of performance. As a result, a leading factor is venue. Other variables include expense and sufficient labour availability; the
5|Page involvement and efficiency of key business partners; geopolitical and regional risk and stability. Since global logistics ties essential components of the supply chain to ensure timely and effective delivery, location is a crucial success factor for distribution centres, transport hubs, terminals and other facilities from the point of production of a commodity to the point of use. Usually, close or adjacent to heavily trafficked transit roads and concentrated urban centres to accommodate vast quantities of users, the most functional and persuasive infrastructure is situated.
Three critical areas are domain awareness, networking and documentation. Global company activities boost the scope of logistics. Impact on the cost of goods transfer & customer service. In global logistical activities, reducing control over the flow of goods is fundamentally a task.
1.2 TRANSPORTATION
There are three means of transport available: -
Land, sea, air. The most favored mode of transportation is sea and air, depending on the price, urgency and destination. The most preferred mode is on roads in the Indian subcontinent.
Due to the availability of a modern and reliable train network, railways are an important development in Europe.
Selection of a proper Transportation Model
6|Page Logistics success is crucial to countries' economic growth and productivity, both in foreign trade and domestically, and the logistics industry is now regarded as one of the main pillars of economic development.
Thus, the Logistics Efficiency Ranking, which rates
Germany as the world champion in logistics, was included in the World Bank report. The world ranks even better than it did two years earlier, the last time it topped the ranking. Logistic Performance Global Ranking 2016
We need to jointly ensure that all components and pillars around the globe will bear the heavy loads coming through the supply chain in today's intertwined and interdependent world economy, where customers and people benefit from the global flow of products.
II. KEY ISSUES WITH GLOBAL LOGISTICS IN INTERNATIONAL
TRADE
• Changing Customer Needs
The logistics solutions must be tailored to the customer needs. Customer needs the full transparency in orders and all stages from raw material to final stage their must be visibility so that the trust has been developed in customers. It is always a challenge to maintain a good quality services because so many factors are involved in it.
• On time Delivery
It is a very challenging for the companies to provide their product on time to their customer in logistics industry. In the case of vessels, it takes the months to discharge the products. But if we talk about Air cargo it takes less time but they are very expensive.
7|Page • Infrastructure
Infrastructure is very important for storage of logistics but there is a lack infrastructure. Many terminals were trying to make large vessels so that it can store maximum goods.
• Government Regulations
In logistic management the biggest problem is Government regulations because the goods are move all around the world and they have to maintain the standards and follow all the rules and regulations of each and every country. Many regulations are imposed by the federal, state and local authorities.
• Environmental Issues
By facing the issues related to the environment anti-idling and other emission reductions, regulations bought about by the state and local governments has created concern that the compliance costs could exceeds benefits.
III. SOLUTIONS
• Transportation
For Global Logistics in International, companies should Check if there current transportation strategies help the service levels or not.
• Outsourcing
Ask which outsourcing parties are used in the logistics function. Company must question if further outsourcing with a third party logistics company would improve the service levels or not — if yes, then how?
8|Page • Logistics Systems
For good logistics systems company should know that their current logistics systems offer the level of data that is required for successfully implementing logistics strategy? Do you need any new systems?
• Competitors
Most importantly take a look at what your competitors are offering. Check if you can make any changes to your company’s customer service that can significantly improve service levels.
• Strategy Review
Companies should Examine if all your logistics and organizational objectives align with each other or not.
3.1 Tips to Create an Effective Logistics Strategy
Focus on Connectivity
Companies should design the logistics strategy in a manner that connects them to the suppliers, corporations and manufacturers that are situated in various parts of the world. They should have the technology to link all the entities in a way that offers consistency, enhances visibility and streamlines processes so that they can meet challenges in real time. Make sure that they use solutions that can deliver to everyone in the supply chain, regardless of their location.
Go for a Configurable Solution
Companies should make sure to choose implementing a configurable solution instead of the one that is a forced fit. Find a solution that can be configured fully to various needs of your supply chain. A configurable solution adapts to the company’s needs instead of forcing you to adapt to them.
9|Page Supply Chain Management
Proper preparation of the supply chain phase is necessary to reduce shipping and distribution costs, key cost products in manufacturing, risk mitigation and loss avoidance to a minimal level. Because the supply chain is determined by several variables and has a complex structure, the structure of logistics should be formed accordingly. A logistics sector should have a complex structure that can respond to the shifts in the supply chain that may arise. The operations plan must also be flexible enough to respond to emergency scenarios.
Uninterrupted Communication
The logistics plan can be planned to ensure that vendors, enterprises and distributors situated at various locations around the world have an uninterrupted link. For this cause, you must have the technologies to keep you in real time in direct touch with the whole planet. They must have contact networks, regardless of where they are, from which you can communicate with all the players in the supply chain. You will take precautions to help the business achieve its full output in a faster period if you can view the data in real time.
IV. CONCLUSION
Logistics is a key enabler of the world's supply chains, which supply farms and factories with resources, plants, fertilisers, products, components, machinery and equipment, as well as stores, supermarkets and household goods.
The industrial sourcing, production and delivery of today does not exist without logistics. Logistics bind sellers and buyers around the world and offer links to domestic and foreign markets for enterprises. Linked resources affect the cost of goods and assess the productivity of economies. Integrating them into world commerce and supply chains brings value to the global procurement, manufacturing and distribution networks that are so important for job growth, national economic development and wealth. In short, they are the cornerstone upon which economies are constructed as logistics work as they should.
10 | P a g e There are 22 OECD countries and 14 members of the European Union in the top 30 of the Logistics Efficiency Index. From 28 in 2014 to 27 in 2016, China changed. India, currently the fastest- growing big economy in the world, this time did not make its way into the top 30 but jumped 19 positions to rank at number 38.
Strong nations rely on purchasing and selling in foreign countries and profit from it. Competition is what moves them, and teamwork is what allows a country to capture its full potential.
