Danger with logistics

The increase in demand for goods and services, the uprising competition in global markets, the introduction of short-lived assets and new communication and transport technologies have forced companies and brand colossus to rethink the production processes and supply of goods and/ or services, investing in the management of logistics activities.

Much has been done for the reorganization of production processes, still much can be achieved thanks to an efficient organization of flows of goods or services and their related information. All this involves new logistical needs and the adoption of efficient logistics management policies. Let’s see what to watch out about dangerous and peculiar risks with logistics. The main objective of distributive logistics is to reduce the cost of supply of finished products to customers maintaining or improving the level of service provided.

The Supply Chain managers worry about the prevention of logistical risks, but only a small part of the companies involves the whole ecosystem in which they operate: the result is a certain ‘opacity’ between the elements of the logistics chain (company, shippers, transporters, suppliers). And if it’s true that the main objective of distribution logistics is to reduce the cost of supplying finished products to customers, while maintaining or improving the level of service provided, even the distribution is a service that has a cost and does not directly produce a profit.

The chain, moreover, is very long and linked to the interconnection of different sectors and work force, that normally tend to maintain a high level only in their department: the goods are produced in one or more production facilities, such as the transformation of raw materials from one or more suppliers, and then transferred to warehouses where they are stored before being transported to retailers or directly to customers (consumers). Consequently, in order to reduce costs and increase the functions of the supply service, logistics strategies must consider the interactions between the various actors in this logistics network.