A Brief Overview of the History and Importance of Logistics in the World Today
Logistics is a big part of the delivery process in the world today. With international trade and consumerism growing at the rate of knots, logistics has also followed suit, and we have seen a lot of innovations in it as well.
Almost all leading organizations in the world today have a separate department for logistics and supply chain. Organizations have realized the importance of logistics, and are highlighting an integral part that this department plays in the overall smooth running of operations at their end.
Here, we look at the history of logistics and how it has become an imperative part of the organization set up with the passage of time:
The Origination of the Word Logistics
The world logistics originated as an amalgam of the words ‘logic’ and ‘static’ from the Latin language. Logistics is primarily considered as a military term because the first application of this term was found within military use. Widespread military use for the word logistics came during the Second World War when countries realized how important it was to maintain the flow of arsenal to the infantry on the ground.
Once the 2nd World War finished, enterprises and businesses within the United States took up this word and started implementing it within normal business processes. This implementation started during the 60s and it continues till date.
Literally speaking, logistics is described in the dictionary with the following words, “The efficient planning and implementation of all kinds of products, services, and information flow in the supply chain from the starting point to the end point to meet customers’ needs, including transport, storage, and control. The logistics of supplying materials and information within the supply chain is the bridge between suppliers and customers.”
Globalization in the 1990s
It was during the widespread era of globalization during the 1990s that companies started exporting and important more. Countries with big conglomerates were now at the forefront of the trading scene, and transportation for the goods was considered as an important factor here.
Transportation and the drive to achieve new innovations here brought about a wave of competition in companies. Organizations were in a battle or competition of sorts with each other, over who would deliver goods in record times. It was this very competition and this era of globalization that shaped the history of logistics the way it is today.
It was around this time that businesses started integration and incorporating numerous business processes together to reap the rewards of their hard work. The factor of time came in as well, as organizations implemented new advancements to ensure that the time they took was considerably lesser than what some of their competition took for the same job in the same manner.
Such is the importance of logistics currently, that organizations place it highly because of how it can assist them with maintaining their decent market share in the market. Organizations realize that logistics can make or break their market share, which currently hangs in the balance based on how competitive they are with their offerings.
The rising interest in overlooking logistics and ensuring the fluidity in operations has meant that we now have a completely new field of logistics management in the modern organization.
The field of logistics management entails the efforts undertaken to ensure that all stages of the transportation process are made efficient, with minor or no discrepancies at all. Logistic costs form a significant part of any organization’s spending capabilities, which is why companies are taking steps to ensure that they spend these costs in the best manner possible.
The aim of logistics management is to find cheap raw materials and pass them on to the manufacturing process in the fastest method, with the lowest cost heads. Once the raw material is worked upon, and finished goods made out of it, the end goal is to think of cost-effective methods for selling the final goods across the whole world.
20 Percent Growth Rate
The logistics industry is currently growing at a rate of 20 percent per year. The breakneck pace, at which the industry is experiencing growth, only goes to prove how important it is for organizations. Timeliness and efficiency of the transportation process is now a key metric for organization success.
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