Essay Sample on Role of Global Logistics in International Business for Singaporean Students

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Essay Title- Role of Global Logistics in International Business

In the growing integration of the world through international trade and relations, logistics management is the key to the business chains. Now, most of the organizations have the production process established in different countries, the distribution in some others.

In this case, most of the organizations are trying to minimize their cost and maximize the profit by selling products all over the world. In this scenario, the importance is of the supply chain that how the raw material is reaching to the production unit then how that production unit is distributing the products to the whole overworld.

The timing is really important thing here as it decides the quality of goods and services.

What is logistics?

Logistics then in general terms means the physical availability of the raw material and the supply from production to assemble then in last to the distribution.

In this, the transportation of the product with its storage and packaging facility is all included in the logistics. Therefore we divide the logistics of international business in these parts

• Production related logistics.

To minimize the cost of the productions many companies are opening their factories in the countries where the raw materials are easily available with cheap labor.

For example, big companies like Adidas, Nike have their factories in Asia where labor is cheap and raw material is available. If there is some trouble in supplying the raw material due to some externalities, the logistics manager has to be far-sighted to guess or predict the upcoming problem.

Logistics management is actually all about the timely action in case of need. As the supply flow is the key and logistics manager make sure that the flow is not being hampered.

• Logistics of Transport

This is a very crucial part of logistics. It actually needs precision in delivery. It matters before the production process as well as after the production process.

Raw materials are transported before the production and finished products are transported after the production process. The time needed in transportation with due care of the perishability of the product is a very critical matter.

The transportation cost affects the final price of the product so it is very important to curb the transportation cost with the timely.

• Logistics of Supply chain

The flow of the supply chain is the base of any business if the flow gets hampered it may affect the whole business. Logistics managers have to be very analytical in determining the flow of the product supply chain.

There can be externalities which may affect the supply as some climatic event, some conflict in the region, etc. So there should always be plan B to the successful flow of the supply chain and thus the business doesn’t get hampered.

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The global business environment is totally the result of logistics management. Much better the management of logistics, the more successful the business is. As in the international arena with lots of competition good logistics management makes the unique reputation of the organization. Logistics impacts the business in the following way. 

• Demand generation

If there is an unobstructed supply of the raw material and the finished products, the supply flow works well, it increases the reputation of the product and the company so the demand for the product increases significantly.

Logistics management takes care of the infrastructure needed to deliver the products and how can the utility of the products be increased. Thus improved management of logistics can change the consumer mindset in favor of the product.

• Reduction in the cost of the product

The ready supply of the raw material and after the production the delivery of the product to the final customer reduces the cost. Infrastructure plays a significant role. But the management of the logistics can make it more effective.

The logistics management can take care of how the perishable communities will be delivered and what time is required. The reduction in time and the availability of infrastructure decreases the cost of production.

• Fetching clients all over the world :

Logistics management takes care of the potential market of the product. If there is a factory opened in Asia but the potential market of that product is in Europe, the logistics management will take care of all logistics involved in the delivery of that product to Europe.

It also makes sure that potential customers get the product on time. Good quality and good service of the product increase the consumer.

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