We discuss current trends in European and Polish logistics and e-business with the Director of the Institute of Logistics and Warehousing, Dr. Eng. Grzegorz Szyszka.
Iwo Nowak: The development of logistics over the last 20 years has brought visible results in the form of rapidly expanding infrastructure, cross-border transport connections, and electronic communication. I think we do not always realize that logistics is one of the most important foundations of the modern economy?
Grzegorz Szyszka: Seeing warehouses and distribution centers springing up at lightning speed, thousands of speeding trucks, and the ever-expanding offer of merchants for whom national or continental borders no longer exist, we must realize that we are one of the links in the global economy. An economy for which logistics has paved the way. Current trends in the economy and logistics are obviously linked to tendencies influencing the face of the global economy, dominated by progressing globalization processes. As a result, information and communication networks have been created, which, according to experts, are the most important technological tool of the modern economy. It is believed that at the root of these changes lies the global computer network, which is the Internet. Its development has become the foundation for the expansion of the e-economy, understood as a virtual arena where business activity is conducted, transactions are concluded, values are created and exchanged, and where direct contacts between its participants mature. The boundaries of time and space have been crossed in communication between producers, suppliers, distributors, and consumers. But such widespread use of the Internet in e-business forces a change in the way companies operate, directed towards a networked economy.
I.N.: If the economy is moving so quickly towards networking, the benefits must be concrete…
G.S.: Global economic networks have created favorable conditions for acquiring cheap sources of materials, labor, and developing an orientation towards sales and satisfying diversified customer requirements. This has set megatrends for modern distribution, consisting of the individualization of offered products and services and shortening the lead times for customer needs. This creates a need to also take into account the needs of local markets, causing a migration from distribution based on “make-to-stock” towards “make-to-order,” with direct deliveries to the recipient. Of course, the supply of materials and components for production can still have a global character, just as the global dimension will remain dominant in relation to typical products and services. Distributors are pushing for shorter delivery times because market participants expect them to deliver individualized products as quickly as concluding a commercial transaction electronically. The result is that the number of fragmented cargo streams has increased, necessitating the creation of extensive supply chains that flexibly adapt to changing market needs. The effect is a need to integrate existing supply chains into logistics networks, which is the most serious trend and challenge for 21st-century logistics.
The article comes from the magazine “Logistyka” 5/2007.