B. Describe each mentioned historical period.
Business Logistics and Supply Chain Management[41]
Logistics as a business concept evolved in the 1950s due to the increasing complexity of supplying businesses with materials and shipping out products in an increasingly globalized supply chain, leading to a call for experts called supply chain logisticians. Business logistics can be defined as having the right item in the right quantity at the right time at the right place for the right price in the right condition to the right customer, and is the science of process and incorporates all industry sectors. The goal of logistics work is to manage the fruition of life cycles, supply chains and resultant efficiencies.
In business, logistics may have either internal focus (inbound logistics), or external focus (outbound logistics) covering the flow and storage of materials from point of origin to point of consumption. The main functions of a qualified logistician include inventory management, purchasing, transportation, warehousing, consultation and the organizing and planning of these activities. Logisticians combine a professional knowledge of each of these functions to coordinate resources in an organization. There are two fundamentally different forms of logistics: one optimizes a steady flow of material through a network of transport, links and storage nodes; the other coordinates a sequence of resources to carry out some project.
In 1950s and early 1960s distribution systems were unplanned and unformulated. Manufacturers manufactured, retailers retailed, and in some way or other the goods reached the shops. Distribution was broadly represented by the haulage industry and manufacturers' own-account fleets. There was little positive control and no real liaison between the various distribution-related functions.
In the 1960s and 1970s the concept of physical distribution was developed with the gradual realization that the 'dark continent' was indeed a valid area for managerial involvement. This consisted of the recognition that there was a series of interrelated physical activities such as transport, storage, materials handling and packaging that could be linked together and managed more effectively. In particular, there was recognition of a relationship between the various functions, which enabled a systems approach and total cost perspective to be used. Under the auspices of a physical distribution manager, a number of distribution trade-offs could be planned and managed to provide both improved service and reduced cost. Initially the benefits were recognized by manufacturers who developed distribution operations to reflect the flow of their product through the supply chain.
1970s were an important decade in the development of the distribution concept. One major change was the recognition by some companies of the need to include distribution in the functional management structure of an organization. The decade also saw a change in the structure and control of the distribution chain. There was a decline in the power of the manufacturers and suppliers, and a marked increase in that of the major retailers. The larger retail chains developed their own distribution structures, based initially on the concept of regional or local distribution depots to supply their stores.
Fairly rapid cost increases and the clearer definition of the true costs of distribution contributed to a significant increase in professionalism within distribution in 1980s. With Introduction to logistics and distribution this professionalism came a move towards longer-term planning and attempts to identify and pursue cost-saving measures. These measures included centralized distribution, severe reductions in stock-holding and the use of the computer to provide improved information and control. The growth of the third-party distribution service industry was also of major significance, with these companies spearheading developments in information and equipment technology. The concept of and need for integrated logistics systems were recognized by forward-looking companies that participated in distribution activities.
In the late 1980s and early 1990s, and linked very much to advances in information technology, organizations began to broaden their perspectives in terms of the functions that could be integrated. In short, this covered the combining of materials management (the inbound side) with physical distribution (the outbound side). Once again this led to additional opportunities to improve customer service and reduce the associated costs. One major emphasis recognized during this period was the importance of the informational aspects as well as the physical aspects of logistics.
In the 1990s the process was developed even further to encompass not only the key functions within an organization's own boundaries but also those functions outside that also contribute to the provision of a product to a final customer, which is known as supply chain management. The supply chain concept thus recognizes that there may be several different organizations involved in getting a product to the marketplace. Thus, for example, manufacturers and retailers should act together in partnership to help create a logistics pipeline that enables an efficient and effective flow of the right products through to the final customer. These partnerships or alliances should also include other intermediaries within the supply chain, such as third-party contractors.
In 2000s business organizations faced many challenges as they endeavoured to maintain or improve their position against their competitors, bring new products to market and increase the profitability of their operations. This has led to the development of many new ideas for improvement, specifically recognized in the redefinition of business goals and the re-engineering of entire systems. One business area where this has been of particular significance is that of logistics. Indeed, for many organizations, changes in logistics have provided the catalyst for major enhancements to their business. Leading organizations have recognized that there is a positive 'value added' role that logistics can offer, rather than the traditional view that the various functions within logistics are merely a cost burden that must be minimized regardless of any other implications. Thus, the role and importance of logistics have, once again, been recognized as a key enabler for business improvement.
c. Summarize the text by filling in the table:
| Period | Major characteristics | Examples, details |