International Logistics Management The word, "logistics," together with the actions entailed in it, has its origins in the military provisions and equipment supply process. 'Logistics' in business emerged during the fifties, when materials supply and product shipping became increasingly complex, in an era of increasing globalization. Nowadays, business circles employ the word for describing efficient goods storage and flow between their points of origin and points of consumption. Global supply chains form a key part of the logistics process these days, and cover tasks such as storage, transportation, shipping, and receipt, in addition to managing all the above areas. In the field of business, logistics may be employed in information, inventory, transportation, materials handling, warehousing, packaging, security, and disposal (Robert, 2012).

The official definition of the word "logistics" is given by the CSCMP (Council of Supply Chain Management Professionals) -- the distinguished global SCM professional association. According to the Council, logistics refers to the part of SCM responsible for planning, implementation, and control of the effective and efficient reverse and forward flow, as well as storage of services, goods, and corresponding information between points of origin and consumption, for meeting consumer requirements. CSCMP also provides a shortened definition: logistics represents management of inventories that are in motion or at rest (Robert, 2012).

Introduction

Efficient and effective SCM is now gaining prominence, as an increasingly significant and valuable means of remaining competitive in a global market, and improving company performance. This is because SCM influences rivalry among firms. At the start of 1990, globalization made competition intense, and corporations vied to deliver services and products to the right place at the right time. Globalization led organizations to realize that, for being competitive in local as well as global markets, they need to improve internal efficiencies as well as their whole supply chain. Only then can they rise above competitors in terms of efficiency and effectiveness (Muhammad et.al. 2013). Corporations need to understand SCM concepts and practices to become more competitive and increase company profits (Childhouse and Towill, 2003; Moberg et al., 2002; Power et al., 2001; Tan et al., 2002).

Global value chains and supply networks are an increasingly prominent element of international trade and commerce, with processing of goods and value-adding activities occurring in several countries for a single product. Modern production typically implies that a product crosses a number of borders, undergoes processing and accrues components in multiple settings, and finally ends up on a retail shelf. The driving force for this production process "splintering" is a hunt for efficiency: total production expenses can be reduced through allocation of different production process parts across different nations. Logistics represents a crucial service -- without it, international supply chains would not be feasible. Decreased costs and increased service quality of logistics firms ensures better services to customers/consumers (Outlook on The Logistics ..., 2013).

The role of SCM and logistics in a company's corporate strategy

In Kihlen's 2007 work (p. 169), the author criticizes the conventional approach to logistics, on the basis of research into logistics' role in company strategy and logistics-centered business models. Kihlen recommends a move away from a purely integration approach to logistics, to one that is more holistic; i.e., a move from logistics that only concentrates on efficiency in operations to logistics that becomes part of organizational strategy, thereby operating on an international level, at which focus is on overall, global effectiveness, and not only on local efficiency (Mats & Jakob, 2010).

Kihlen argues that logistics' principal aim should be provision of 'operative excellence', which denotes the ability of organizations to tailor their operational leanness and agility, and accept local inefficiencies, for reaching global effectiveness and efficiency. Operational excellence is about carrying out company operations bearing in mind an overall organizational strategic aim, hence avoiding expensive sub-optimization for meeting established goals and reaching a required operational efficiency level, which contributes to overall efficiency in the firm (Mats & Jakob, 2010). In other words, organizations possessing operative excellence, while not being highly efficient in specific processes, will display high efficiency on a global, and overarching level (Kihlen, 2007, p. 189).

Akin to the findings of Carranza and coworkers (2002), it has been established through empirical research that leading global corporations' logistics are, quite frequently, directly in line with company strategy (e.g., profitability, market defense, diversification, growth, etc.) An important conclusion derived from the above findings: In organizations characterized by high performance, logistics' significance lies is combining high flexibility to changes in the global market with low costs and high operative excellence. From a logistics approach involving corporate strategy, logistics is not measured using a conventional logistics scale; rather it is measured using the very same overall organizational measures- chiefly growth and profitability (Mats & Jakob, 2010).

Further, it implies that logistics must cultivate 'distinctive capabilities'. Barney (1991, 2001) defines these capabilities as resource characteristics that lead to sustainable advantage over competition. Researchers maintain that logistics can become such a distinguishing capability if one regards it as a precious, tough to imitate resource that fulfills demand on rareness. This is explained below (Mats & Jakob, 2010):
1. Logistics represents a precious resource, which contributes to increased consumer value, for instance, with regard to lower costs and superior service delivery; these may be viewed as implementation of value-based logistics as against transaction-based logistics.

1. Logistical capabilities represent a multifaceted combination of organizational routines, physical assets, knowledge, and personnel skills, requiring time to cultivate and integrate. Furthermore, logistics capabilities might necessitate the forging of collaborative bonds with customers and suppliers, which are difficult to realize and fulfill demands on scarcity.

1. Logistics' complexity means that imitating any organization's logistics capabilities is hard; this produces competitive advantage.

Such a combination of inside-out and outside-in approaches is substantiated in Kihlen's 2007 study, that regards control over logistical resources as a distinctive capacity. Day (1994) adopts a similar approach. He views logistics as a spanning, distinctive capability; this is concerning a collection of activities or horizontal processes defined from outside-in as well as inside-out analyses. According to Day, researchers in the field of logistics have also noticed that a conventional functional and hierarchical organization is, quite often, an obstacle to a strategic outlook of logistics. Therefore, he maintains that activities should focus on processes focusing on value to customers (Mats & Jakob, 2010).

An operational arrangement that allows corporations to continuously adjust their capacity to size of the global market and balance operating costs with revenues is an element of the aforementioned strategic approach to logistics. This encompasses manufacturing to buyer order, finding the proper balance between outsourced operations and in-house capacity, managing supply networks and supporting short times to reaching markets (Mats & Jakob, 2010). This kind of logistics platform provides prerequisites for adapting advanced logistical concepts, with emphasis on creation of value, instead of efficiency in every transaction (Abrahamsson et al., 2003). As the focus is product flow, logistics can be considered, in a sense, as the key business, central to organizational strategy. Overall growth and profitability goals are directly related to logistics' role in organizations (Mats & Jakob, 2010).

Conclusion

Global market-expansion logistics plays a key part in market expansion of corporations (Mats & Jakob, 2010). For modern-day retailers this, is characterized by emphasis on upstream logistical performance, for being proactive in downstream markets. One manager states that, for occupying a pole position within one's supply chain, one must be the best when it comes to purchase as well as supply logistics; subsequently, market coverage and business volume of firms can expand rapidly. If goods supply is not strong and trustable, market expansion is highly risky. Thus, supply chain and logistics performance is a key driver and prerequisite for establishing novel strategic positions. Broadening logistics system borders, and including downstream as well as upstream logistics, forms part of SCM; this is a clear-cut distinction between the Swedish food retail outlets in the study and modern retailers. The latter consider SCM and logistics as a key business central to company strategy (Mats & Jakob, 2010), which represents growth of logistics-centered SCM models that imply that the agenda of logistics development is guided by organizations' growth targets; concurrently, logistics establishes prerequisites for growth pace. This is corroborated by dynamic effectiveness theories (Abrahamsson & Brege, 2004), wherein the relationship between operational performance and strategic positioning is critical for profitable growth (Mats & Jakob, 2010).

References

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Kihlen,…