Logistics: The third profit source

Author: Mou Xudong, Chen Jian
Publisher:
Publishing Date: 2002-06-01
Features:
1. The emergence and meaning of "Distribution"
"Distribution" first appeared in the United States. In 1921, Archibald Shaw mentioned in his book Some Problems in Market Distribution: "The transfer of materials through time or space creates added value." Here, Market Distribution refers to the commercial flow; the transfer of time and space refers to the logistics of the sales process. In 1918, during the World War, Lord Leverhume of Unilever in the UK established "Instant Delivery Company." The company's mission was to deliver goods promptly to wholesalers, retailers, and end-users nationwide. This move was hailed by some logistics scholars as an early record of the "logistics boom." In the early 1930s, a foundational textbook on marketing began to mention the term "Physical Supply" for physical supply services such as logistics transportation and material storage. The book defined marketing as "activities that influence the transfer of product ownership and the physical distribution of products." Here, the transfer of ownership refers to the commercial flow, and physical distribution refers to logistics. In 1935, the American Sales Association first defined logistics as: "Physical Distribution is the material goods and services contained within sales, as well as the various activities accompanying their flow from the production site to the consumption location." This history is widely recognized in the logistics industry as the early stage of logistics. Japan began using the concept of logistics in 1964. Before using the term "logistics," Japan "" for all business related to the physical goods of commodities. In 1956, Japan sent a "Logistics Technology Special Investigation Team" to the United States to study, led by Professor Hideo Hino of Waseda University, a group of 7 people, to clarify that the content previously called "" in Japan was equivalent to the "Physical Distribution" in the United States. From then on, "" was shortened to "PD" according to the American term, and "PD" became widely used. In 1964, when Hara of the Ikeda Cabinet's five-year plan formulation team mentioned the term "PD," he said, "Compared to calling it 'PD,' it would be better to call it '.'" In 1965, Japan officially adopted the term "" in government documents, abbreviated as "." In 1981, the Logistics Handbook published by the Institute for Research on Business Strategy in Japan defined "" as: "The physical movement of material resources from suppliers to consumers is an economic activity that creates temporal and spatial value. From the scope of logistics, it includes various activities such as packaging, loading, storage, inventory management, distribution processing, transportation, and distribution." China began using the term "logistics" in 1979 (some believe that Sun Yat-sen advocated "," which can be considered the origin of China's "logistics thinking"). In June 1979, a delegation of material workers from China attended the 3rd International Logistics Conference in Japan and, upon returning, first quoted and used the term "logistics" in their investigation report. However, there was a small twist at the time. The Ministry of Commerce proposed establishing "logistics centers," and some people thought the term "logistics" came from Japan, which was considered "flattering to foreigners," so it was changed to establishing "storage and transportation centers." In fact, storage and transportation are the main body of logistics, but logistics usually has a broader scope. Moreover, logistics is a Chinese term adopted by Japan, and as the abbreviation of "physical distribution," the term is both scientific and reasonable and is easy to understand. It was soon restored to "logistics centers." In 1988, Taiwan also began using the concept of "logistics." In April 1989, the 8th International Logistics Conference was held in Beijing, and the use of the term "logistics" became increasingly common.
(4) The Modernization Stage of Logistics (Mid-1980s to Present) After the mid-1980s, the concept of logistics rationalization faced further demands for transformation. Major changes occurred in Japan's production and operations, the development of differentiated consumer demand, and especially the collapse of Japan's bubble economy in the 1990s, which led to problems in the previous production and operation system of mass production and mass sales. The new mainstream of production and operation in the new era became diversification and small-scale production, resulting in changes in the logistics management of the entire distribution system, i.e., shifting from bulk logistics to multi-frequency, small-scale, and short-term inbound logistics. In the face of increasingly fierce sales competition, logistics services were given high importance in Japan as a key means of competition, as evidenced by Japan's active advocacy of high-value-added logistics and "zero inventory" logistics in the late 1980s. However, with the diversification of logistics service competition, high logistics costs became a characteristic of this period. In Japan, this period was sometimes called the "logistics depression" era, as improving logistics efficiency became a major issue for Japan's logistics in the 1990s. On April 4, 1997 (Heisei 9), the Japanese government formulated an influential Comprehensive Logistics Policy Outline. This outline was based on the decision of the Japanese government on December 17, 1996 (Heisei 8), regarding "the transformation of the economic structure and the creation of a plan," which stated that "the role of logistics reform in the economic structure is one of the most important issues, and by Heisei 13 (2001), both the efficiency of logistics costs and the achievement of logistics services no less than international standards must be achieved." This outline served as a guide for the modernization and in-depth development of Japanese logistics and held historical significance for the development of Japanese logistics management. The main framework of this outline is as follows:
(1) Basic Goals
The outline proposed three basic goals for logistics development by 2001:
First, the establishment of convenient and attractive logistics services in the Asia-Pacific region;
Second, the realization of logistics costs that do not hinder industrial competition;
Third, the reduction of environmental load. To achieve these goals, the outline also formulated three principles for implementation measures:
- Developing comprehensive transportation measures through mutual cooperation;
- Ensuring an effective transportation system that adapts to consumer needs, with cooperation among road, aviation, and rail transportation agencies to develop comprehensive transportation measures;
- Promoting the activation of the logistics market through competition.
(2) Horizontal Measures
Horizontal measures include three main parts:
First part: Allocation of social capital, which involves concentrating capital on designated logistics infrastructure and strengthening cooperation among relevant departments. These logistics infrastructure include:
① Diverse selection methods corresponding to user needs (mutual cooperation of social capital);
② Elimination of logistics bottlenecks;
③ Construction of international ports and airports, such as high-standard trunk roads, regional high-standard roads, roads leading to ports and airports, enhancement of main trunk rail transportation capacity, establishment of central and hub international ports, and construction of logistics centers in metropolitan areas and airports.
Second part: Deregulation, which improves logistics efficiency through regulations and policies, such as the abolition of demand-supply adjustment plans and the formulation of safety regulations (international harmonization, promotion of policies to raise technical standards).
Third part: The advancement of logistics systems, which includes:
- Informatization, such as paperless trade, one-stop services, and the development of EDI;
- Standardization, such as container standardization;
- Other measures, such as technological development and the improvement of business practices.
(3) Measures in Different Fields
This measure also includes three parts:
First part: Urban logistics, which involves alleviating traffic congestion, improving vehicle loading efficiency, enhancing logistics service quality, and reducing environmental load. The development direction focuses on establishing a mechanism for smooth road traffic (logistics joint distribution, traffic demand management) and the conversion of truck self-operation (improving loading rates).
Second part: Inter-regional logistics, which aims to improve the competitive conditions of land, sea, and air transportation through various means, achieve composite and joint transportation, and reduce environmental load. The main measures include promoting coastal shipping and rail freight, improving the construction of roads and large-scale logistics centers, and relaxing regulations on trucks.
Third part: International logistics, which aims to reduce the time and cost of international logistics in response to the increasing import of goods into the Japanese market, correct internal and external price differences, and improve the competitiveness of industrial regions. The main measures include the rationalization and establishment of international hub and central port nodes, as well as the informatization of import and export procedures and port procedures.
(4) Policy Promotion System for Cooperation Among Various Organizations
The purpose of this section is to promote the adoption of modern logistics measures by government agencies, local public entities, logistics businesses, and consignees, and to strengthen cooperation between local and central governments. The measures include:
- Strengthening the system of central-local cooperation in the central government;
- Strengthening the system of central-local cooperation in local governments;
- Conducting thorough investigations annually on the effectiveness and issues of implemented measures.
From the above introduction of Japan's Comprehensive Logistics Policy Outline, it can be seen that the further development and strengthening of Japanese logistics will focus on:
A. Promoting informatization;
B. Developing logistics technology;
C. Training logistics talents;
D. Developing new logistics services;
E. Responding to internationalization;
F. Promoting the mechanization of packaging and the digitization of inventory management;
G. Strengthening the integration of the overall system;
H. Enhancing the allocation of social capital;
I. Promoting standardization and standardization;
J. Promoting joint and cooperative efforts.
I. Opportunities for the Development of Modern Logistics in China
1. The macroeconomic situation has created favorable conditions for the development of modern logistics. This is mainly reflected in the following aspects:
First, the formation of a buyer's market has broken the supply-demand pattern of the previous short-supply economy, and services and quality have been unprecedentedly valued by enterprises, providing a foundation for the survival and development of the modern logistics industry;
Second, the deepening of enterprise reforms and the intensification of market competition have prompted more and more enterprises to consider how to reduce distribution costs to obtain the "third profit source," which is the microfoundation for the development of the modern logistics industry;
Third, the rise of the internet economy and e-commerce has provided strong momentum for the development of modern logistics, while the development of modern information technology has laid a technical foundation for the development of the modern logistics industry;
Fourth, the successful experience of supply chain management in developed countries and the successful cases of the development of third-party logistics enterprises have provided domestic logistics enterprises with "textbooks" and "examples."