The Evolution of Logistics
Fierce competition in this age of growing technology and globalisation leads businesses towards the pursuit of good practices in logistics. The benefits of logistics were gradually realised throughout the years but those who dwelled in it at the very start, were able to gain quicker success than those who didn’t. You will realise the importance of logistics in your business as you look at how its necessities led to its progress gradually through time. This is why, we here at Rich Sources Logistics Pte Ltd encourage all the entrepreneurs within the perishable industry to take full advantage of logistics from our 5 years of experience in the field of logistics.
Before the 1950s
The period until the 1950s was tough for businesses due to the lack of knowledge regarding ideal business practices. This is why the era until the 1950s is termed to be the Independent Business Function Era. In this era, little knowledge and practice were focused upon the logistics of the businesses. Other major departments of business like finance, production and marketing were more in focus for development. What was more challenging was that numerous wars were in effect during this period.
Numerous wars in effect challenged the operation and success of businesses within this era. Despite this, logistics were considered within businesses in simpler and more military terms. Until the 1950s, the mere signs of logistics lied in the procurement, control and transportation. SCIELO mentioned that businesses logically operated by considering the costs involved with transportation and inventory.
Significant shortages in the economy due to the wars meant high demands needed to be met with a limited supply of raw materials. Logistics were regarded when raw materials and finished products needed to be warehoused and transported to several insecure destinations. According to SCIELO, a renowned marketing professor, Paul Converse informed that businesses paid a whole lot of attention to purchasing and selling as opposed to enforcing efficient and accurate distribution of products around the year of 1954. The Germans used their logistics effectively in 1941 to occupy the Moscow-Gorki space after several successful combats. The Chief in Command in the German army used the efficiently constructed railway system to transport high capacities of military weapons. As a result, they gained victory over 84 combats with the Soviet troops along with casualties of 162 to themselves.
Initiation of Logistics
The severe necessity of logistical practices was realised between the 1960s and 1970s according to SCIELO. These two decades fell within the Limited Internally Integrated Business Function Era. By this time, the major areas of business had all matured and the need for physical distribution and logistics came about. As logistics was relatively new, the cost control system in this area was extremely poor. Businesses incurred excessively high logistical costs everywhere around the globe. SCIELO quoted that logistical and physical distribution costs were 16% of the sales in the U.K (Murphy, 1972), 26.5% of the sales in Japan (Kobayashi, 1973) and 14.1% of the sales in Australia (Stephenson, 1975).
In the 1980s, businesses began to enhance their logistics despite it being so costly. The tremendous development of the logistics department was made possible mainly because of the arrival of personal computers. You will understand the major importance of logistics in this era with the 1985 change of the name of National Council of Physical Distribution Management to the Council of Logistics Management. The reason behind this name was that the principal effect of logistics had been understood as a discipline that involved the integration of inbound, reverse and outbound flows of services, products and relatable activities. With the rise of computers, the Computational Optimization Center created an extensive range of optimisation algorithms that solved the long existing airline scheduling complication. This was the Fully Internally Integrated Business Function Era.
The developments made during the 1970s and 1980s led to the rise of Enterprise Resource Planning within the logistics sector in the 1990s. The developments in logistics before 1990 involved the enhancement of Material Requirements Planning Systems according to the Georgia Supply Chain & Tech Logistics Institute. Dorien James and Malcolm L. Wolf reported that during the 1990s, businesses globally invested a total of $300 billion. Georgia Supply Chain & Tech Logistics Institute further mentioned that these businesses benefitted largely as the availability of data and the control of accuracy augmented remarkably. This era is called the Externally Integrated Business Function Era. The success of ERP system led to the generation of the Advanced Planning and Scheduling software.
Logistics at Present
At present, it appears as though logistics has become a significant subset of a newly emerging sector of business known as Supply Chain Management, according to SCIELO. Enterprises worldwide are planning to expand the area of logistics and supply chain management by hiring 1.4 million additional employees by 2018. Georgia Supply Chain & Tech Logistics Institute announces globalisation to be a major factor for the growth of this sector in the 2000s. They reported that U.S investment in importing from China propagated largely from $45 billion annually in 1995 to greater than $280 billion annually in 2006.
The cold chain industry can benefit extensively from the advanced presence of logistical systems we have at present. We, here at Rich Resources offer customised solutions to all the firms who have a limited budget and strong determination to prosper. Our excellent teams of fast responsive experts have an excellent reputation of providing the most effective cold chain logistics solutions.