Logistics

Logistics

Logistics refer to the overall processes revolving around how goods, services, and information reach the consumer from the designated point of origin. All processes, inclusive of packaging, transport and the middlemen involved, constitute logistics. This concept is very important since it is a factor that affects the majority of companies. An extremely successful firm may be hindered from exploiting their true potential due to impediments in the transport system. In conclusion, proper management of logistics is the basis of success for any company.

Legal Factors

Since logistics involve transport of goods from the producer to the consumer, a great degree of legal formalities need to be abided by (Bookbinder, 2013). The goods themselves are passed to a standardization department where they may or may not receive the brand of approval and quality. The net income earned as a result of the profits is also submitted for the purpose of issuing taxations. Since transport forms a significant part of overall logistics, the laws and regulations affecting transport also affect logistics considerably. A good example is the designated maximum amount of weight which different vehicles are allowed to carry as per transport (Bookbinder, 2013). This would dictate the number of goods and round trips, which could be made upon transport of the produce to the consumers this rate, would significantly reflect the sales made, especially if the goods are in high demand.

Some roads and pathways require the user to pay a minimal amount of money before being able to use it (Burns, 2016). This is conventionally referred to as the toll booth system. These roads usually connect far off places and at times they are the better choices for quick delivery of produce. The amount of cash paid at these tollbooth centers is often so minimal that they are worth the use (Burns, 2016).

Economic Factors

The state of the economy affects logistics more so in the sector of transport. Specific trends in the market state have been known to impact transport in a substantial and significant way. The months of August all the way to December have been known to foster a high demand for transportation services (Fahimnia, Bell, Hensher & Sarkis, 2015). This is usually due to designated days such as black Friday, where consumers make many purchases, which require delivery. The holidays are also around the corner and individuals always start stocking in supplies, which will be used as per the season’s ending. The market demand for goods, which is a major economic factor, affects the demand for transport (Fahimnia et al., 2015). Since transportation vehicles will be filling the roads, accidents are a lot at most times hence traffic jams and road closure are common. This, in turn, affects the efficiency with which the company can deliver goods to their customers; these delays would affect the company adversely. The transport industry forms about 9.3% of the GDP in the United States; this high number is however attributed to a shortage of drivers (Fahimnia et al., 2015).

Social Factors

Social factors refer to lifestyle choices such as religion and so on. Christian holidays warrant a significant demand for transport services especially on Christmas (Burns, 2016). This is due to the fact that they are the most abundant of the religions. This, as already mentioned above, works hand in hand to impede proper transport. The only way this issue can be countered is by expanding the transportation systems in order to meet the demands more so in the holiday seasons. Lifestyle choices affect the type of goods in terms of preference and choice (Burns, 2016). Middle classed, low classed and high classed individuals all have demands for different kinds of goods, for example, expensive model car and so on. In essence, social factors such as lifestyle affect the type of products being demanded, hence affecting transport in the long run. This, in turn, affects the overall performance of the company in question.

Political Factors

Political factors also affect transport to a considerable extent, which in turn works hand in hand to affect logistics. They are factors, which pertain to administration and the power of political leaders (Monios & Bergqvist, 2017). Campaign periods are usually characterized with transport blockages due to large motorcades all advocating for one person. The campaigns are often followed by a large number of individuals all following behind on foot. This greatly impedes transport and can significantly affect the logistic processes of a company. Some leaders also enact laws as per the constitution, which improves infrastructure based on development. This serves to significantly improve logistics as well as the overall performance of a company (Monios & Bergqvist, 2017).

Cultural Factors

The culture of individual ethnic groups warrants the types of goods that they are in demand of. Muslim cultures, for example, resent pork. In short, culture affects the kinds of products, which are in demand, and those which are not (Monios & Bergqvist, 2017). This, in turn, has an impact on the kinds of goods being transported. As a result, designated routes may have high transport processes, and this can impede or foster logistics depending on the route chosen by the company in question.

 

Conclusion

Conclusively, logistics, like any other matter pertaining to business, is affected as per the PESTLE factors. Businesses can note the trends in the transport industry in light of all of the above-mentioned factors and make possible amends. This will hence turn to improve the general logistics sector and the overall improvement of the organization. Companies should see how they could improve the logistics by enhancing transport and other related services i.e. packaging.

References

Fahimnia, B., Bell, M., Hensher, D. & Sarkis, J. (2015). Green logistics and transportation: a sustainable supply chain perspective. Cham: Springer.

Burns, M. (2016). Logistics and transportation security: a strategic, tactical, and operational guide to resilience. Boca Raton: CRC Press.

Bookbinder, J. (2013). Handbook of global logistics: transportation in international supply chains. New York, NY: Springer.

Monios, J. & Bergqvist, R. (2017). Intermodal freight transport & logistics. Boca Raton, FL: CRC Press.

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