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Logistics – “trendy fashion” or a necessity of the times? – part 6

The article participated in the 4th edition of the “Pen of the Logistician” competition.

The subject of distribution is the movement of materials, semi-finished products, or finished goods produced in the manufacturing process to recipients or places of final consumption. The goal of distribution logistics is, therefore, to deliver the right goods to the final recipient in the right place and time, and in the right quantity and quality, while maintaining minimal logistics costs.

The distribution logistics subsystem is a link connecting the company’s production sphere with its external environment (the consumption sphere), and its task is to fill the gaps with goods separating both spheres. This requires the company’s logistics services to continuously track the flow of goods, materials, and finished products from the places of production (storage) directly to the market, to users, or consumers.
Waste is generated in every sphere of a company’s activity. The secondary logistics subsystem (waste recycling) participates in their management. It includes processes of transport, storage, and transshipment of waste, as well as processes of logistics for their disposal.
Currently, the highest form of a systemic approach in logistics is the integrated logistics chain.

The logistics chain as the highest form of systemic solutions in logistics.

Logistics supply chains are one of the most dynamically developing concepts in today’s logistics. Over the last few years, the architecture of supply chains has undergone significant transformations. The chain, as a modern systemic solution, allows for the development of a company’s business strategy. It is a fundamental form of the logistics system that creates its internal structure and extends beyond its boundaries. It thus becomes a quality determinant for the company. Proper design and monitoring of the sequence of events that occur from the moment of acquiring a logistics resource to the moment of its delivery in the form of a logistics product to a potential customer allows for harmonious control of flows, lightning-fast reaction to conflict, and analysis of phenomena occurring within it. It requires logistics managers to have a systemic approach that allows for rational management of physical, financial, and information flows that accompany phenomena occurring in various phases of the logistics product’s life.

A properly designed supply chain should enable the rational acquisition of a resource, referred to as a logistics resource, and then its processing into a logistics product or service and delivery to the customer in such a way that their expectations are met. In such a system, the logistics chain should be treated as a specific philosophy and perceived in various aspects, aimed at improving the economic result in the enterprise.
Due to the nature of the company’s activity (production, service, trade, and others), supply chains differ from one another. There are no two companies that would have identical supply chains. This is due to the fact that companies operate in a specific environment and adapt their supply chain to it. However, adopting a general classification criterion based on the form of use, logistics chains can be divided into chains of an external nature (endogenous supply chains) and internal (exogenous logistics chains).

An exogenous logistics chain is a set of connections (vertical and horizontal) occurring within the logistics spheres of an enterprise, enabling efficient control of events that occur in individual logistics systems (procurement, production, and distribution) of the enterprise. The internal logistics chain can extend its reach to other spheres of the company’s activity. A key and important feature for it is an efficient connection with the external supply chain. [10]

An endogenous supply chain is a network team of connections, most often network-based, possessing a multi-layered architecture that allows for tracking logistics resources and products in the company’s external environment. Individual links of the supply chain must be designed in such a way as to enable efficient mapping of the processes that occur within it. A characteristic feature should be its functionality and length.

The globalization of problems in logistics has forced the introduction of the criterion of supply chain length. In practice, we encounter chains of a local (micro), industry, sector (meso), national (macro) nature, as well as Euro-chains and global chains. The choice of chain length depends on the size of the enterprise, the company’s financial capabilities, and the scope of operations. In practice, companies that use supply chains with the greatest reach derive the most benefit. An established consumer market means that, in practice, companies using a global supply chain achieve success in the market. This is possible through the use of modern information technologies that enable the tracking of the flow of goods and information about events that occur in the global supply chain.