The paper was presented at the Polish Logistics Congress “Logistics 2006 – Best practices in logistics”. Poznań, May 10-12, 2006.
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Evolution of logistics and distribution<\/strong><\/div>
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Evolution of logistics and distribution<\/strong><\/div>
The evolution of the logistics concept is a good starting point for understanding the trends and milestones of modern distribution. Over the last few years, various definitions of logistics have been developed and presented. They are characterized by increasingly higher levels of complexity and completeness.
From various specialized sources of information on logistics [1], we will quote the definition of the Council of Logistics Management: Logistics is the process of planning, implementing, and controlling the efficient and cost-effective flow and storage of raw materials, in-process inventory, finished goods, and related information flow from the point of origin to the point of consumption, in order to conform to customer requirements. In our opinion, the three key elements of this definition are:
• Logistics is defined as a process, i.e., an integrated system of activities;
• It introduces the need to adapt to the market and customer needs, thereby indicating the influence of factors arising at the end of the distribution channel, which play a decisive role in modern distribution.
In particular, it can be said that it is the customers who fill the distributors’ shelves and drive the logistics system.
• It establishes the basis for enriching the concept of logistics and introducing the concept of supply chain management.
In reality, the need to manage an integrated system of activities concerns not only various functional areas within each company, but also the economic and logistical relationships that spread across the network of companies involved in various processes and activities participating in value creation. In this sense, supply chain management can be defined as the integration of business processes from end-users to original suppliers, providing products, services, and information, and offering added value for customers [2].
Three different steps and definitions of logistics introduce the concept of supply chain management and characterize the relationships between logistics and distribution in a differentiated way.
From various specialized sources of information on logistics [1], we will quote the definition of the Council of Logistics Management: Logistics is the process of planning, implementing, and controlling the efficient and cost-effective flow and storage of raw materials, in-process inventory, finished goods, and related information flow from the point of origin to the point of consumption, in order to conform to customer requirements. In our opinion, the three key elements of this definition are:
• Logistics is defined as a process, i.e., an integrated system of activities;
• It introduces the need to adapt to the market and customer needs, thereby indicating the influence of factors arising at the end of the distribution channel, which play a decisive role in modern distribution.
In particular, it can be said that it is the customers who fill the distributors’ shelves and drive the logistics system.
• It establishes the basis for enriching the concept of logistics and introducing the concept of supply chain management.
In reality, the need to manage an integrated system of activities concerns not only various functional areas within each company, but also the economic and logistical relationships that spread across the network of companies involved in various processes and activities participating in value creation. In this sense, supply chain management can be defined as the integration of business processes from end-users to original suppliers, providing products, services, and information, and offering added value for customers [2].
Three different steps and definitions of logistics introduce the concept of supply chain management and characterize the relationships between logistics and distribution in a differentiated way.
Table 1. Evolution of the logistics concept and its references to distribution [3]
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Conceptual levels<\/strong><\/td>
| Definition of logistics<\/strong><\/td>
| Fields of action<\/strong><\/td>
| Relationship | with distribution<\/strong><\/td><\/tr> A. Logistics | constitutes an autonomous function <\/td> Company function <\/td>
| Mainly distribution, supporting production, sales and marketing <\/td>
| The role of logistics is mainly based on distribution <\/td><\/tr>
| B. Integrated logistics <\/td>
| Integration process within the company <\/td>
| The entire logistics system within one company <\/td>
| Logistics connects distribution with production and procurement <\/td><\/tr>
| C. Logistics | as supply chain management<\/td> Integration process between companies <\/td>
| The entire logistics system related to the chain that delivers the final product and creates value <\/td>
| Logistics as an element connecting distribution with production <\/td><\/tr><\/table>
| At the first level, logistics constitutes a company function and refers to inventory planning and management, distribution networks, and the transport of goods to the point of sale. In this sense, logistics is closely related to distribution and constitutes an operational and auxiliary function with respect to sales and marketing. At the second level, logistics is no longer a function, but a process, and it concerns not only distribution costs but contributes to the increase of the company’s added value. The ultimate goal is to meet market requirements and manage the trade-off between cost and service quality as a strategic factor. Logistics transversally connects distribution with production and procurement, which is expressed in the form of an integrated process at the company level, ensuring the right materials, right quantities, right quality, right place, right time, right method, right impression, right cost [4]. The next level of concept development influences the relationships between the company (covering all its functions) and other organizations located both at the beginning and at the end of the value chain. Logistics has a key influence on the design, implementation, and management of goods and information flows within the extended enterprise, defined as a network of suppliers, subcontractors, production plants, distributors, and points of sale. Due to the specific reference to distribution, logistics concerns not only the management of warehouses and points of sale and their monitoring, but also the connection between points of sale and production units and organizations not in the legal possession of the company, and in particular with regard to the distribution industry, logistics acts as a link with the production industry. In our opinion, such a definition of logistics is more appropriate in an economic context where transport and logistics activities integrate chains covering a wide geographical range at a global level and are based on the multiplication of physical and decision-making centers in different countries, on different continents.<\/div><\/div><\/div><\/div><\/div>
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