Logistics is subject to constant change. Increasingly, task areas that go beyond company boundaries and issues derived from other fields are being incorporated into logistics.
In a modern approach, logistics is perceived as a management concept, serving as a tool for designing, controlling, and implementing efficient flows of objects (goods, information, financial resources, people) in corporate logistics systems and enterprise networks.
This general definition of logistics is too “broad” for some logisticians. For them, logistics is limited to the sphere of physical goods flows and the necessary control processes associated with them. Figure 1 shows the field of dependencies in logistics.
Three significant goals are associated with logistics optimization:
• cost reduction,
• time optimization,
• quality improvement.
In the field of dependencies in logistics presented in Fig. 1, all three goals are contradictory to each other. The overarching goal (task) of logistics is therefore the comprehensive optimization of all partial goals.
Due to the need to achieve these goals, new trends have crystallized in logistics in recent years. The catalyst for their emergence was innovative solutions in the sphere of information technology, organizational forms, management, and engineering.
The most important trends include:
• supply chain management and logistics controlling (currently, there is talk of supply networks to emphasize the network architecture);
• logistics outsourcing (this area includes all services related to logistics);
• e-business.
At the same time, new trends have contributed to the emergence of new solutions
in areas such as:
• system design,
• warehousing technology,
• internal transport equipment technology,
• information systems,
• service elements.
The functioning of the supply chain in practice will be presented in the further part of the paper using the example of Arrow Electronics Europe.
2. Supply Chain Management and Logistics Controlling
Supply chain management can be briefly defined as: cross-functional planning, control, implementation, and monitoring of all material and information flows (streams).
Figure 2 presents the traditional approach in confrontation with the new supply chain concept.
The new concept is that a partner in the supply chain or network optimizes not only their own resources and processes but also perceives the elements preceding and following them in the process chain.
The main goals of the described approach are:
• inventory reduction,
• rapid response to consumer needs,
• cost savings at all stages of the process and the associated rational use of resources,
• improvement of service level,
• quality improvement.
Supply chain management therefore leads to the optimization of the three logistics goals: costs, deadlines, and quality.
According to experts studying the functioning of supply chains, full integration can lead to a reduction in total costs of up to 30%, a time reduction of up to 60%, and a significant improvement in service levels.
Creating a coherent and consistent supply chain concept requires many outlays. The following conditions are necessary to achieve this goal:
• Ensuring supply reliability in every case. This requires developing the most critical scenarios (Worst-case) and conducting simulations of the entire supply chain.
• Taking into account specific industry solutions (the lack of industry standards is sometimes a source of misunderstandings).
• Specific regional and cultural differences (features) play a significant role. This issue becomes more important as the “globalization” of the supply chain increases. Creating a climate that takes into account multicultural conditions in the company facilitates the communication process.
• Another premise is the openness of partners to disclosing data and internal processes. This openness will only be achieved if companies strive to create a “Win-Win” situation.
• A well-functioning shipment tracking system allows for obtaining the necessary “transparency” of processes and information flow.
The fundamental obstacle is the lack of standards for interfaces and controlling tools. In this regard, within the framework of the Supply Chain Council (SCC) initiative, a reference model of logistics processes was created – Supply Chain Operations Reference (SCOR).