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Logistics is becoming increasingly popular as a competitive
weapon, among others, for firms to gain advantage in cost and services.
Numerous factors have contributed to the development of logistics.
The development of information technology has enabled a transformation to take
place in communication and data transmission, opening up markets and refocusing
strategies in distribution and manufacturing outsourcing and
assembly. It has no culture or language barriers, no time zones and is
available continuously, bringing together the low-and high-labour cost nations
and their skills for the exchange of goods and services.
Also, the globalization of markets with their infrastructure and international
trade environment has generated business confidence
internationally. A major contributor is the World Trade Organization. New
markets have opened up in both the manufacturing and service industries. The
decline of the freight forwarder has emerged as the mega container carriers
develop in-house global logistics operations. A logistics network is demanded
by satellite production. It is computer driven.
Shorter product lifecycle, driven by a fashion conscious international market
and continuous technical advancement, favors logistic efficiency. Companies,
particularly multinationals, are being driven by their logistics departments. Moreover,
the multinationals now focus on a simultaneous global product launch across all
markets to ensure an early cash return on capital expenditure rather than
concentrating on a regional launch over a period of time, for example, phase
one Europe, phase two North America and phase 3 the Far East. This favors the
logistic operation. The ongoing technological developments providing a longer
shelf life for many consumer products, especially foodstuffs, need a
logistically based distribution.