Value-Added Functions of Logistics

Efficient logistics contributes to added-value in four major interrelated ways:

• Production. Derived from the improved efficiency of manufacturing with appropriate shipment size, packaging and inventory levels. Thus, logistics contributes to the reduction of production costs by streamlining the supply chain.
• Location. Derived from taking better advantage of various locations, implying expanded markets and lower distribution costs.
• Time. Derived from having goods and services available when required along the supply chain with better inventory and transportation management, and the strategic location of goods and services.
• Control. Derived from controlling most, if not all, the stages along the supply chain, from production to distribution. This enables better marketing and demand response, thus anticipating flows and allocating distribution resources accordingly.

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