Logistics- Competitiveness and Efficiency.

Increasing Competitiveness.

Logistics has a key role to play in increasing the competitiveness of European industry in both the services and manufacturing sectors. The distribution of materials, components and products is one of the determining cost factors in production. Indeed, on average, logistics costs account for 10-15% of the final cost of the finished product, according to the 2006 Communication from the European Commission on the Freight Transport Logistics in Europe. Therefore, a well-run supply chain has a positive knock-on effect across an entire organisation, offering a competitive advantage to all types of business.

As logistics evolves from the classic transport function to a more strategic, cross-functional and global discipline, the importance of logistics only increases. Increasing the efficiency of logistics has the potential to decrease the cost of a finished product.

The European Commission recognises the importance of logistics in increasing Europe’s competitiveness. In its 2006 Communication on Freight Transport Logistics in Europe, the Commission stated that ‘logistics measures are indispensible for maintaining and increasing European competitiveness and prosperity in line with the renewed Lisbon agenda on growth and jobs’. The Commission also recognises that, whilst logistics is primarily a business-related activity and a task for industry, the authorities have a clear role to play in creating the appropriate framework conditions.

The AEL provides a valuable medium through which to engage policymakers in order to maximize the competitiveness of this industry.

Increasing Efficiency.

Efficient logistics has multiple benefits, since it results in potential savings of 10 % – 30%, driving down costs and limiting the industry’s environmental impact. Indeed, increasing efficiency is an essential factor in increasing the competitiveness of the industry, making it a win-win situation.

Efficient logistics is essential for the global economy. It makes it possible for Israeli mangoes to be served up for breakfast in hotels in the UK, and for US bestsellers to arrive in Spanish bookstores just hours after coming off the press.

However, the industry is committed to increasing its efficiency yet further. Logistics providers have the potential to reduce their carbon footprints, and that of their customers, through a variety of methods, including:

  • Optimising the energy balance of warehouses by investing in carbon efficient and renewable energies
  • Using fuel efficient transport
  • Employing multi-mode transport solutions
  • Recycling of waste
  • Restructuring corporate processes, such as route optimisation using GPS devices
  • Optimising supply chains to ensure that they are as efficient as possible, removing unnecessary carbon emissions
  • Using better packaging to save costs

Ref; The Alliance for European Logistics – About Logistics Section.

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