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As I studied international logistics, my knowledge base on the subject matter took a positive leap. I conceptualised in my mind how international logistics provides a framework for a cost effective flow of products and services to the customer in both the forward and reverse directions.
Effective coordination and timely movement of the products and services depend on the location and access to the market and constitute the factors that firms must consider when planning, negotiating, and implementing the logistics framework. According to Rushton (2007), international logistics deals with firms found in different countries that interact in different capacities to facilitate the flow and distribution of goods and services within a network of countries governed by different laws, political situations and economic environments. For instance, the logistics of the supply for currency notes is efficient and occurs in real time to make the currency available at the click of a button on an ATM machine. Here, data warehousing services, automatic update of credit card information and the essential support systems enable financial institutions to verify the credit worthiness of a customer. However, the flow of the currency can be influenced by the political situation of the country of origin and the destination country. Despite that, friendly countries negotiate treaties and impose trade regulations to govern the flow of goods and services among the trading partners (Wood, Barone, Murphy & Wardlow, 2012). On the other hand, war, unfriendly nations, shifting and unsteady currency values, economic conditions, carrier costs, revenue costs, and other elements of uncertainties add to the factors that influence the trade relationship among the trading partners. I have learnt that the activities in the logistics chain are interdependent and each functional area must be characterised by a complete set of activities to make the logistics chain effective.
For instance, information flow, which is one of the components of the logistics mix, is characterised by coordination, order registration, order checking and editing, and order processing. On the other hand, warehousing consist of effective storage of materials, better material handling and utilisation, planning for the distribution network, picking orders, and despatching the products (Rushton, 2007). Another aspect of the logistics mix is inventory control that provides the logistics manager the ability to plan for materials and keep proper records on inventory levels of customers. That is in addition to considering packaging and transportation, which involves route determination and planning of the mode of transportation to be among the logistics processes.
Wood et al. (2012) argues that factors such as technological innovation and environmental protection have outstanding effects on the flow of goods and services among the countries engaged in bilateral trade. On the other hand, it has been noted that Government restrictions such as trade tariffs, insurance requirements, packaging, and documentation play a significant role in defining an effective international logistics framework.
However, a new trend has emerged where companies integrate lean supply chain management systems into cost effective global supply chain networks and outsource those functions that are non-core to their operations (Wood et al., 2012). The focus is to achieve customer value chain through the inbound, process, and outbound logistics by using effective inventory management systems. However, a question arises on, what is the role of integrating procurement, processing, and distribution functions into the international logistics of business processes?
References
Rushton, A. (2007). International logistics and supply chain outsourcing: from local to global. New York: Kogan Page Publishers.
Wood, D. F., Barone, A., Murphy, P., & Wardlow, D. (2012). International logistics. New York: Springer Science & Business Media.
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