LOGISTICS AND DISTRIBUTION. Presentation by Christopher Findlay University of Adelaide
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1 LOGISTICS AND DISTRIBUTION Presentation by Christopher Findlay University of Adelaide
2 Logistics Defined Supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customers requirements.
3 Scope of distribution Retailing Wholesaling Franchising Commissioned agents That is, reselling services It might also include storage, inventory management, warehousing and so on
4 Trends in Logistics Shipper (service users) Concentration on fewer carriers Partnership with service providers Long term contract Integrated service Focus on service performance Service providers Wide service portfolio Value added services Customized logistics
5 Logistics Service Sector Three levels Traditional service: transport, storage and warehousing, forwarding Value-added service: customization and others Integrated service: 3PL (4PL?) Distribution and logistics Overlaps and Relationships
6 Logistics: Summary of WTO Implications Direct Low impact within one year Greater impacts as full foreign ownership is possible Less impact on air and sea Scope for growth of 3PL
7 Logistics: Summary of WTO Implications Indirect Pressure on administration and local protectionism Regulation and transparency Separation of government and business Investment in infrastructure Training and know-how transfers
8 Impact of logistics reform Transport costs falling Especially for road and air Some evidence is available on the gains from higher levels of service quality as a result of packaging of services and coordination Leading to significant cost reductions, eg wastage, warehousing, stock control Important implications for other export sectors
9 Infrastructure and logistics Two way relationship, eg roads, ports Logistics processes add to returns to infrastructure investments Infrastructure investments guide the development of logistics services
10 Implications for poor areas Terms of trade effects Competition effects Review uso/cso policy better targetting better funding more options (cash out or substitutability)
11 Significance of distribution Food markets are being transformed by a supermarket boom
12 Forces for change Demand side factors Income, urbanisation, cost of time, lower cost transport, more refrigerators Supply side factors Procurement technology, specialised supporting service providers (logistics) Policy change that supported FDI
13 Retail vs Wholesale Role of wholesalers is diminishing Larger average store sizes Alongside direct sourcing Supported by quality of logistics services So less role for intermediaries shorter supply chains Retail models Hypermarket, supermarket chain, convenience store, branded speciality store
14 WTO accession commitment on distribution Within one year, (minority) wholesaling JVs permitted Majority foreign ownership after 2 years in retailing and wholesaling All restrictions including geographic limits (mostly) removed after 3 years (11 December 2004)
15 Implementation China initially fell behind Then in mid 2004 committed to meet the December deadline USTR however remains concerned about process of approving applications, especially the power of local authorities
16 Contribution to productivity growth In Australia..the sectors which made the largest contribution to (the) pick-up (in productivity growth between the 1980s and the 1990s) were the nontraded sectors of wholesale trade, retail trade and construction. Together these sectors accounted for more than 100 per cent of the pick-up in marketsector labour productivity growth between the two decades, despite contributing only 40 per cent of the hours worked in the market sector.
17 Current distribution sector issues in China Regulatory approval Distribution of books, newspapers and magazines automobiles gasoline pharmaceuticals Direct selling
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