
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.