Customers are more knowledgeable, and demand higher quality, lower costs and better service.
● Competition is getting fiercer, and organisations must look at every opportunity to remain competitive.
● There is changing power in the supply chain. Very large retail chains, such as Wal-Mart, Tesco, Toys-R-Us and McDonald’s, demand customised logistics from their suppliers.
● Other changes in retail markets include the growth of 24-hour opening, home deliveries,
out-of-town malls, retail parks, telephone and on-line shopping.
● International trade continues to grow. This is encouraged by free trade areas such as the European Union and North American Free Trade Area.
● Organisations are introducing new types of operation, such as just-in-time, lean operations,
time compression, flexible manufacturing, mass customisation, virtual operations,
and so on.
● Some organisations are turning from a product focus (where they concentrate on the end
products) to a process focus (where they concentrate on the way products are made). This
encourages improvement to operations, including logistics.
● There have been considerable improvements in communication. These allow electronic
data interchange (EDI), item coding, electronic fund transfer (EFT), e-commerce, shared
knowledge systems, and other new practices.
● Organisations are outsourcing peripheral activities and concentrating on their core operations.
Logistics is a useful area for third-party operators, with specialised companies
offering
a range of services.
● Organisations are increasing co-operation through alliances, partnerships, and other
arrangements. This integration is important for logistics, which is usually the main link
between organisations in a supply chain.
● Managers are recognising the strategic importance of the supply chain.
● Attitudes towards transport are changing, because of increased congestion on roads,
concerns about air quality and pollution, broader environmental issues, government policies
for the real cost of road transport, privatisation of rail services,
deregulation of transport,
and a host of other changes.