The main objective of global logistics is to meet the needs of customers and provide goods and services that make them accessible from anywhere else in the world. As customer loyalty methods, it is necessary to focus on quality and efficiency. Reducing costs to achieve greater productivity puts companies at the forefront.
The modern business environment is marked by the increasing use of global resources, especially in low-cost countries, while many companies in various industries achieve cost savings with this procurement strategy, while the benefits are often offset by concepts related to global logistics management.
Although total supply chain costs can be reduced with the use of global sourcing, transportation and logistics costs have generally risen as a percentage of the cost of goods sold.
This is a response to rising fuel prices, domestic costs of long-distance transports and imbalances in carrying capacity, both in regions such as North America and for international sea and air transport.
Supply lead times often have a high degree of variability that can lead to late delivery performance as well as unusable products, components and products. The variability in times occurs for many reasons.
The overall flow of goods can be subject to many delays, including by operators, customs and port authorities, and consolidators, and transfers increase the likelihood of unexpected events. Increasing import volumes along with large security deficits, especially in Asia, have caused serious port traffic in North America and Europe.
The percentage of total cost after the gap allocated to the supply chain can take anywhere from 3-5 percent in a local procurement environment to 45 percent in a global procurement environment. As logistics as a strategic business function, companies do business in more and more countries, and regulatory countries constantly change their processes, there are delays in assessing and processing compliance with documents. To respond to the complexity of global logistics management, leading companies are using a variety of strategies to reduce transportation costs and improve their services.
As a result, logistics is becoming a more strategic business function in companies where it has traditionally not been a core competency.