Chapter 12. Logistics driven global competitiveness

• Integration of logistics functions
• Outsourcing logistics
• Nature of competitive advantage driven by logistics
• Customer service and logistical responsiveness
• Retention of customer
• Logistics costs
• Questions for chapter review
• Chapter bibliography

This chapter is designed to introduce the reader to the power of smart logistics solutions in business to win the competition. The chapter describes how the concept of an integrated logistics service emerged in the late 20^th century from separate logistics functions such as transportation, warehousing, material management, and others. The reader can familiarize himself with the ways of procurement of logistics services and the added value of logistics.

The chapter describes the links of logistics with marketing and how logistics allows reducing the price of the product for the consumer and ensures, enhances and even creates other values for the product. The role of logistics in customer service, variations of logistics solutions depending on the value of the product and the scale of demand are analyzed separately. The structure of logistics costs and the share of logistics costs in the final product price are specifically described. In the chapter, the reader can find why logistics in the field of very expensive goods differs from the logistics of relatively cheap goods.

Logistics has become irreplaceably important when the distances between the extraction of raw materials, the production of components, the assembly of the final product and the final consumption have increased, and the entire cycle from the extraction of raw materials to the final consumption has spread across the globe. Through effective logistics solutions, global companies achieve that their goods are available and affordable anywhere in the world and can successfully compete with local products produced by local companies for the domestic market.

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