Pressures to improve logistics
• 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 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, telephone and on-line shopping.
• International trade continues to grow. This is encouraged by free trade areas such as the European Union (EU), and ASEAN Economic Community (AEC).
Pressures to improve logistics
• 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), ecommerce, shared knowledge systems, and other new practices.