Retail Logistics

An integral part of Supply chain management is Logistics Management. The main objective of logistics management is to reduce inventory holding costs and improve profits. Logistics is derived from the French word. In the last decade there have been several well publicized logistics exercises internationally. The Gulf War of 1991 was one of the largest since World War II.

The council of logistics management defines logistics as that part of the supply chain process that plans, implements and control the efficient forward and reverse flow ad storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customer’s requirements.

Technological progress and worldwide trade and investment liberalization are presenting new opportunities to harness global markets for growth and poverty reduction. But with the advent of global supply chain, anew premium is being placed on being able to move goods from A to B rapidly reliably and cheaply. Being able to connect to what has been referred to as the physical internet’ is fast becoming a key determinant of a country’s competitiveness. The report Trade Logistics in the Global Economy, which is the logistics performance index, and its indicators published by the International bank for Reconstruction and Development /The World Bank sheds light on how different countries are dong in the area of trade logistics and what they can do to improve their performance. It is based on a worldwide survey of the global freight forwarders and express carriers who are the most active in international trade. The Logistics Performance Index (LPI) and its underlying indicators constitute a unique dataset to measure country performance across several dimensions of logistics and to benchmark that logistics performance against 150 countries. It provides the empirical basis to understand and compare differences in trade logistics as well as to inform policy with respect to difficult bottlenecks and tradeoffs. As a tool for policymakers professionals development agencies and other stakeholders it will directly support the fast growing agenda for reforms and investments in trade and transport facilitation.

The LPI suggests that policymakers should look beyond the traditional trade facilitation agenda that focuses on road infrastructure and information technology in customs, to also reform logistics services markets and reduce coordination failures, especially those of public agencies active in border control. This demands a more integrated comprehensive approach to reforms all along the supply chain. Indeed there are strong synergies among reforms to customs, border management, and infrastructure and transport regulations because reforms usually reinforce ach other.

The LPI rankings and indicators provide robust benchmarks that may help build the case for reform. By shining a light o the costs of poor logistics performance the LPI and its indicators an help countries break out of the vicious circle of logistics unfriendliness, to effectively access global markets. Table below list some of countries which feature in the first Logistics Performance Index.


Logistics Performance Index

Country rank Score

Singapore 1 4.19
Netherlands 2 4.18
Germany 3 4.10
India 39 3.07

Many international retailers have built their success on logistical prowess. Speedy restocking of goods, elimination of poor sellers and promotion of successes also contribute to a clear sales advantage. Logistics entails more than mere trucking ad distributing goods. For without good information about sales and insight into customers needs, the finest distribution center and transport capabilities are likely to send the wrong thing to the wrong place at the wrong time.

Effective logistics therefore need an efficient information system as well as good transport, distribution center and store handling capabilities.

A single recipe for success does not exist. A logistic system has to be built to suit the needs to the organization, keeping mind the kind of products that the company retails and the competition prevailing. Fashion retailers may need to focus on feed while discount retailers on cost. The needs of each are different.

Retail logistics is the organizer process of managing the flow of merchandise from the source of supply to the customer. Thus, it incorporates the following functions.

1) Physically moving the goods from one location to another, where the location may be a distribution center, warehouse, store or manufacturer
2) Stocking the goods at the locations needed in the quantities needed
3) The management of this entire process.

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