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Latest trends in logistics development

August 28, 2007 | Łukasz Przybylski

Latest trends in logistics development. Opportunities and threats for the development of logistics in Poland

The paper was presented at the Polish Logistics Congress “Logistics 2000 – Meeting the logistics challenges of the 21st century”. Poznań, June 1-2, 2000.

The situation in the markets of European countries in areas of business activity is changing very dynamically and decisively. The ongoing changes necessitate the development of a new approach to the existing concept and organization of the supply chain. Changes in the business environment at the end of the 20th century create many new challenges for enterprises and companies that want to occupy a significant place in the market with increasing competitiveness in the new century. The most significant changes are taking place in areas such as:

• Business environment/market
Liberalization, the removal of legal and awareness barriers to taking actions beyond the local and national market leads, consequently, to the creation of a “single market” using a single currency; the result is the emergence of a market with sharper competition, but on the other hand, it provides access to a larger number of potential partners and to the denationalization of operational structures.

• Demand generated by consumers and customers
Growing awareness and requirements of consumers result from the increasingly better quality of products and services provided; consumer requirements influence the growing requirements placed on themselves by partners operating in the supply chain; in order to satisfy the growing needs of consumers, partners in the supply chain expect high skills from each other in using and creating the best/optimal solutions (best practices).

• Conditions regarding new information technologies

The use of information technologies enables access to the global market, facilitates and accelerates transactions, enables the creation of new optimal processes and new ways of communicating, as well as new ways of managing individual elements and areas of an enterprise’s activity.

The combination of the above forces intensifies the challenges facing market participants and creates completely new conditions and imposes greater dynamics on the operation of enterprises. The emerging challenges significantly exceed the previous experiences of local markets. The current approach to supply chain management consists of concentrating efforts to achieve satisfactory results in terms of: quality, time, and costs. The traditional approach to supply chain management will soon cease to be sufficient for gaining a competitive advantage in the market. Meeting new challenges will be possible by creating a dynamic supply chain ensuring the ability to react quickly, optimal use of resources, and high flexibility of operations.

The main factors influencing the direction and dynamics of changes in the field of logistics are the growing needs and requirements of customers. It is these requirements that most significantly influence the new way of managing the supply chain, expanding this concept to a “supply network” or, otherwise, a “trade network”. It is estimated that the concept of a “supply network” defines the direction of development of a new dynamic supply chain.

The basis for the functioning of future “networks” will be close relationships between partners, whose common goal will be to satisfy customer needs. Optimization of joint actions will be possible thanks to close relationships, manifested, among other things, in agreed/unified key business processes. A necessary condition for the functioning of the network will, of course, be the full and rapid use of information, which will only be possible through the use of modern information technologies. The way the network operates ensures the building of unique competencies of individual participants/partners in the network and the use of knowledge to satisfy individual customer needs.

Current changes in supply chains, which form the basis for building future “supply networks”, are characterized by the following main trends:
• the order fulfillment process is increasingly customer-oriented;
• the ability of partners in the chain (and the entire chain) to respond to unexpected orders and to flexibly and quickly adapt to requirements becoming standard in the market is increasing;
• further integration and coordination of the physical flow of goods, information, and funds is taking place;
• entities specializing in providing information flow services (infomediaries) are emerging.

Evidence of an increasingly strong orientation towards customer service is changes in almost all industries and areas of economic activity. Examples here include sectors such as construction or the publishing industry, as well as the automotive industry, which has long been considered a leader in the field of supply chain integration.
Another interesting trend is the emergence of entities specializing in the transmission of information. In a traditional chain, the flow of information is an integral part of the supply chain. The scope, accuracy of information, as well as the fluidity and speed of its flow are dependent on individual partners in the chain. Modern “networks” will use specialized entities involved in the professional collection, archiving, and transmission of information (information intermediary – “infomediary”). An additional element of a modern “trade network” will therefore be a platform or, in other words, IT systems that allow for the optimal use of information flow in the business environment.

Full article in PDF format.

Ref-6.pdf