Packaging sector
Logistics is defined as a business planning framework for
the management of material service information and capital flows. It includes
the increasingly complex information communication and control systems required
in today’s business environment. It is also defined as the procurement
maintenance distribution and replacement of personnel and material.
A typical
logistics framework consists of physical supply internal operations and
physical distribution of goods and services. The global annual logistics spend
is valued at about USD 3.5 trillion. The annual logistics cost for the USA is
about 9% of GPD and internationally it varies between 9% and 20% of the GDP.
The Us logistics market is the largest in the world and
account for one third of the world logistics market. The global logistics
industry has registered significant growth in the last decade wherein the big
driver has been the emergence on Third Party Logistics 3PL and Fourth logistics
4PL players in industry who are expected to play and much more important role
in the years to come.
The global logistics industry is characterized by high costs
of operations low margins shortage of talent infrastructural bottlenecks
alongside increasing demand from clients for providing one stop solutions to
all their needs and for investing in progressive technology. All these factors
will further decrease the margins involved in this industry and fasten the
process of consolidation in industry through acquisitions mergers and
alliances.
The entities in a typical supply chain are the supplier the
manufacturer the distribution the retailer and the customer. Goods information
and finance move unidirectional or bi-directionally between these entities. A
typical supply chain is as shown below. The terms logistics and supply chain
management SCM are typically used interchangeably in common parlance though
there is a subtle difference between the two.
While SCM is more strategic in nature logistics is more
operations oriented. Logistics can be considered as a part of SCM which
encompasses planning activities implementation control of the efficient forward
and reverse flow and storage of goods services and related information between
the point of origin and the point of consumption in order to meet customer and
legal requirements. The activities involved in a typical supply chain are
typically inbound activities or outbound activities inbound logistics refers to
activities relating to bringing goods in to the organization while outbound
logistics deals with activities relating to taking the goods out of the
organization. The value chain for logistics is as shown below goods that are
received from the manufacturer are loaded stuffed in to containers of the right
size.
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