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Importance of Logistics

In: Business and Management

Submitted By rafhanrifan
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TL1033: Logistics (Part 1 – Introduction to Theory)
Level 1 – Semester 2, Bachelor of Transport and Logistics Management
Department of Transport and Logistics Management
Assessment 1

131448P

“Leaders win through logistics. Vision, sure. Strategy, yes. But when you go to war, you need to have both toilet paper and bullets at the right place at the right time. In other words, you must win through superior logistics.” - Tom Peters
The word logistics was used in warfare where logistics became a pivotal technique to win the game. In that case most of the military logistics literatures of early periods were delivered the tactics and insights to work in complex environments (McGinnis, 1992) where the flow of material and information become vital. This basic phenomenon was integrated into the business and currently logistics acts as a central and essential feature of all economic activities (Christopher, 1986).
The importance of logistics can be understood by its evolution. Earlier, flow of material was under different and fragmented activities such as purchasing, warehousing, transportation and etc. Then it became material and distribution management, and thereafter it has moved towards linking it to integrated logistics (Ballou, 2007). All these integrations to intent and purposes were to reduce costs incurred through logistics activities as logistics costs were seemed to be higher than any other cost of business activities. As an example, national level logistics cost of UK was accounted for 16 percentage of sales (Murphy, 1972). So that, organizations considered much on cost cuttings through effective logistics.
But with the time, the scope of logistics has been expanded massively, and now it is a part of supply chain management (CSCMP, 2013). In the light of supply chain management, the importance of logistics become broad and it could be clearly…...

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