Procurement and logistics operations form around 70% of an organization’s complete cost. And, these costs are directly related to the company’s working capital through inventory and accounts. Efficiency of an organization comes when both procurement and logistics are collaborated. But today, logistics and procurement are seen to be individualized in companies, which leads to inefficiency and in turn, a lethargic production value. Today, supply chain managers are so focused on increasing production value that they have disregarded the importance of procurement. Many companies don’t even understand where their procurement operations are! This is because of the difference in standard operations between the two. Therefore, to compete with these inefficiencies, it is vital that the supply chain managers and procurement teams partner with each other and put in group effort for the company. This will enable better information and resources flow leading to better data-based decisions and in turn efficiency.
Standard logistics refers to the flow of goods including devices and equipment from the producer to the consumer. Most companies have a strong hand on the planning and budgeting of this kind of conventional logistics, but what when the consumer wants to return the products? This is where reverse logistics comes into play to manage a global supply chain.
We all know how technology is advancing and constantly changing. This goes the same for the distribution system too. New technologies keep bringing changes in how distribution works, which may at times lead to unexpected results. The distribution system comprises of producers, distributors and retailers, who are constantly competing for market share and looking to gain the biggest market share. Companies are coming up with innovative approaches to cover as much market share as possible. Some try to become an all-purpose intermediary while others want to excel in one particular segment. In order to understand the future of distribution, it is important to know about the latest and upcoming technologies that may roll out in the next few years and how they will impact the existing distribution system. Also, analyzing the history and understanding the present of distribution system will help to bring future developments into perspective. The distribution system can change overnight as technologies advance, and businesses that don’t adapt to these changes are left behind. Manufacturing takes time to change production lines, test new products and come up with new production. Although the needs of the customers change but, the basics remain the same. However, all this does not apply in the case of distribution. Processes including warehousing, shipping and selling can change rapidly.