The Impact of Logistics

free essayIn the contemporary dynamic competitive environment, the successful operation and development of enterprises depends on the quality, speed, reliability, and efficiency of logistics significantly. The transformation of industrial relations and the change of the legal form and nature of the relationships of business entities in the economic system are the primary determinants of the development of logistics enterprises. Economic criteria define the concept of the traditional understanding of logistics, referring to the procedure of making strategic and operational decisions. The progressive global trend of the formation of a balanced development expands the social criteria of the logistics environment.

Unique opportunities to improve the functioning of the material and service leading systems through the use of logistic approaches determine the relevance of the topic. Logistics allows to reduce the time interval between the receipt of raw and semi-finished materials the and delivery of finished products to the consumer, thus helping decrease inventory and transportation costs. The purpose of logistics is to facilitate the optimal development and efficient management of inventory information and financial flows in the areas of procurement and production as well as to boost sales and eliminate disruptions in case of permanent movement of goods. The concept of logistics is a system of rational planning, organization and control of production and exchange of products for the complete satisfaction of consumer demand. Reducing the time of delivery of goods through the logistics communications defines the economic efficiency of logistics as the latest scientific and practical direction.

The concept of logistics involves the optimization of material, financial and information flows that have a technological, organizational, economic and informational unity of positions in the logistics systems. The domination of the integral paradigm defines the main aspects of the contemporary development of logistics. As a result, the process of making optimal decisions depends on the evaluation of integrated expenses and material flow. The rationalization of material flow is paramount in order to minimize expenditure. It determines the feasibility and necessity of applying efficient research tools of managing material flows. An important part of finding practical solutions in logistics is to determine the composition and nature of economic structures, their activity, and the way they influence material flows.

Logistical support plays a leading role in enhancing the production efficiency. It provides indirect communication between the production and consumption of industrial products of technological purpose. The primary task of enterprise organization and management of logistics is timely, reliable and comprehensive security of resources in accordance with the established targets. The consideration of logistics as a system is an appropriate and reasonable question. This system is designed for the planning, implementation, and monitoring of product delivery. In addition, its task is to reduce the time, financial, human, and material costs associated with the moving of products as well as to increase the transparency of the resources provision processes. One of the most important functions of logistics is an efficient logistical organization of consumers. The logistics approach is applied in the management of material flows to integrate suppliers and consumers, as well as for the development of corporate relations, focusing on the strategic needs of the company and partners. Each system requires a modern integrated logistics management. It provides enterprises with an opportunity to adapt the system to the demands of the contemporary market using strategic resource potential for profit.

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Basic Principles of Transportation Logistics

Transport is an integral part of the logistics system. The transport component solves a number of problems of logistics. Transportation logistics as a part of the overall logistics system decides the three primary tasks. It is the formation of market service areas, forecasts, operational management, and the regulation of material flow. The second aspect is the development of the transport process system. It is a development plan for the transportation, distribution, formation of freight traffic and the schedule of the movement of vehicles. The third aspect is the management of vehicles and information systems (Christopher, 2011). The complexity of and consistency in decision-making and unity of technical, economic, informational and administrative components contribute to the further development of transport logistics.

Green Logistics

The necessity of the formation of an environmentally oriented logistics management is appropriate and involves consideration of environmental factors in all phases of space-time planning, organization, control and regulation of the movement of material, information, and financial flows. The purpose of an environmentally oriented logistics management is an integrated economic effect as a result of the optimization of the flow processes in the production logistics system. It contributes to the reduction in the duration of the logistics cycle and the increase in the overall environmental quality of products and productivity of using resources. The reduction in losses and lack of resources during storage and transportation and the timely execution of business obligations are essential aspects of this approach. The implementation of an environmentally oriented logistics management requires a comprehensive approach to identifying the goals of logistic management.

The primary objective of green logistics is to improve the logistics system from the environmental point of view by creating a symbiotic environment. The political regulation of the concept of “green logistics” evolves towards the formation of “green” supply chains. This approach provides a complete transformation of logistics strategies, processes, and structures in accordance with resource-saving, energy-efficiency, and environmental technologies (see Appendix A). The modern concept of “green logistics” develops under the significant influence of the main provisions of sustainable development (McKinnon, Cullinane, Browne, & Whiteing, 2010).

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The formation and development mechanism of eco-oriented logistics management in an enterprise is based on core principles. The first principle is the formation of an environmentally oriented logistics management as an integrated management function of the total material flow.

The second aspect is the focus on maintaining a highly competitive position in the market at the expense of environmentally responsible behavior. The third factor is the information support of the processes through the use of modern information and communication technologies. The fourth principle is the formation of an effective system of industrial production based on the application of innovative methods and management tools. The fifth aspect is to make optimal decisions in the management of the production logistics system on the basis of assessment of the environmental costs in the total logistics expenses. The sixth point is the adaptation of the logistics system to changing environmental conditions. Transportation via optimal routes leads to the reduction in empty mileage of motor vehicles. Consolidation of consignments at the logistic channels allows using ecological modes of transport.

Green logistics as a new scientific direction involves the use of advanced technology and modern equipment to minimize pollution and to improve the efficiency of logistics resources.

Reverse Logistics

This approach to the management of flow processes is cost-efficient and has a set of advantages. Reversible logistics is one of the most important sections of logistics. Many entrepreneurs identify this direction as the process of waste management. Waste recycling, extra materials and processing of the returned products with deficiencies constitute a set of reversible logistics. Reverse logistics is a modern system of the traffic management of the production process wastes (Dyckhoff, Lackesn, & Reese, 2004). The purpose of this type of logistics is the optimization of the flow of industrial waste and used products of an enterprise with all attendant packing materials. It involves the planning, management, processing, and transportation of industrial waste and used goods.

Consumers can return products for warranty repair, replacement, or modification; in this case, expenditures incurred by a company will be higher compared to the transport expenses in the forward direction. An effective management strategy reduces the cost of returning goods; it is an opportunity to get additional income in certain situations. Logistics of the reverse flow includes the removal and recycling of waste material in the process of production, distribution and/or packaging. The logistic process allows to handle, transport and store products efficiently.

Reversible logistics has many advantages such as the protection of the environment, minimizing costs and saving raw materials, fuel, and energy. The reduction in transport costs and improvement of the reputation of a company are the results of this system as well. Reversible logistics is an efficient tool of the mechanism for regulating technogenic losses of industrial enterprises. It allows them to reduce or eliminate the destructive impact of economic activity on the evolution of the economy and population (see Appendix B). Reverse logistics is an integral part of the complex mechanisms of the entire enterprise.

The Logistic Approach to the Management of Material Flows

The logistic approach to the management of material flows involves the allocation of special logistics services through the integration of individual chain links into a single logistics system.

The purpose of the logistics system is to deliver the most prepared for industrial consumption materials, products, and goods to the specified place, in the right quantity and assortment. The logistics system comprises four elements. The purchase is the subsystem that provides the supply of material flow in the logistics system. The second component is the warehouses for storing material stocks. The third element is the inventory. The next element is the maintenance of the production (Langevin & Riopel, 2005). The set of specific actions with tangible objects forms the material flow. The application of the logistic approach to the materials management has many advantages. It allows responding flexibly to the changing customer needs and reducing the time intervals between the acquisitions of raw materials. It enables minimizing inventory, speeding up the process of obtaining information, improving the level of service, and reducing the goods delivery time.


One of the main features of the modern development of the world economy is the process of globalization. This process has a significant impact on the system of international economic relations, identifying trends in the development of national economies. Justification of the systematic mechanism for the management of transport logistics determines the prospects for further research. Researchers should search for the ways and opportunities of modernizing facilities and infrastructure of transport logistics. Logistics provides synchronization of sales processes, storage and delivery of products with a focus on market tools of production. Logistics materials management is aimed at saving resources by reducing the cost of living and materialized labor at the intersection of different organizational levels and economic sectors. Reversible and green logistics as the means of reducing the destructive effects of economic activity involve the use of innovative systems and equipment, thus increasing the efficiency of logistics resources.

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