Representatives of the food industry and traders are a group of managers with an excellent understanding of the large-scale changes taking place in European logistics and transport. This article is based on knowledge derived from numerous contacts and meetings with the management staff of logistics departments of international corporations in the aforementioned industrial sectors.
To better illustrate the trends, challenges, and key success factors, as well as the resulting requirements placed on logistics in international enterprises, three basic macro-categories of activity must be defined: purchasing/procurement, manufacturing, and delivery.
The largest international food industry and retail enterprises have developed a centralized European structure that collects orders from national factories and delivers goods from several large international suppliers. The primary advantage of this strategy is cost reduction on a European scale, both for production materials (raw materials, packaging) and finished products (taking into account both manufactured products and purchased final products). Despite the adopted strategy, companies still experience a trade-off effect, i.e., they reduce certain costs while increasing others. This happens because they are forced in this situation to order larger quantities of goods, also losing the flexibility offered by direct suppliers, thereby lowering the level of customer service. For this reason, supply chain managers are exposed to long lead times, large batches, restrictive picking times and conditions, and constantly emerging new logistical constraints.
The article comes from the magazine “Logistyka” 6/2004.