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Drivers for Change in LogisticsKXO325 Business LogisticsLecture 12.1Associate Professor Xin ShenAIEN Shanghai Ocean UniversityDr Luke MirowskiSchool of Engineering ICTUniversity of TasmaniaOverviewGlobal LogisticsManufacturingValue of LogisticsMaterials TransportationForecasting InventoryCustomer ServiceLogistics Role in Economy SCMEnterprise LogisticsQuality/StandardsChannelsWarehousingProcurementIntroductionLogistics and supply chain management are changing rapidlyMany innovations and improvements in both technology, theory and practiceIncreased focus on strategic competitive advantages introduced and offered by logisticsBoth macro and micro drivers for change in logisticsMacro Drivers IntroductionImproving logistics performance has become an important government policy objective in recent years, because logistics has a major impact on economic activityBetter logistics performance is strongly associated with trade expansion, export diversification, the ability to attract foreign direct investment and economic growthMacro Drivers Introduction Cont.From a quantitative perspective, the economic contribution of logistics can be assessed by the total cost of logistics in relation to the GDPSource: Macro EnvironmentThe main points to consider are: How logistics adds value to goods and services in the frame of the general economic activitiesWhat the connections are between logistics and particular economic effects Macro EnvironmentOther aspects of the macro environmental drivers on logistics areEnsuring the required quantity and variety of goods to consumers in areas far away from the place of production (global procurement)Transportation investment, often a key to facilitating economic developmentExamplee.g. National High InfrastructureChina example: in 2003, completed investment in highway construction was 350 billion yuan ($56 billion), 219 key project progressed, five north-south and seven east-west national highwaysBy 2004, 1.8 million km modern highways buildSo