The Technical Conditions of Modern Logistics

doi:10.4236/jss.2013.15005

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Open Journal of Social Sciences

2013. Vol.1, No.5, 19-22

Published Online October 2013 in SciRes (http://www.scirp.org/journal/jss) http://dx.doi.org/10.4236/jss.2013.15005

Open Access 19

The Technical Conditions of Modern Logistics

Zhaojiang Dong

Shandong University (Weihai), Weihai, China

Email: [email protected]

Received June 2013

Modern logistics is an important link of the modern commodity economy and it is also an important pillar

in the development of modern economy. What things are needed in the establishment and development of

modern logistics industry are not just the funds, equipments and management. And it is not based on the

imitation and transplantation simply. The formation and development of modern logistics industry is the

objective requirements of the advanced enterprise management technology. Advanced information tech-

nology and standardized management are the technical foundation of modern logistics industry estab-

lished.

Keywords: Third Party Logistics; Management Technology; Information Technology; Standardization

Introduction

Modern logistics is an important link of the modern com-

modity economy and it is also an important pillar in the devel-

opment of modern economy. As one of the advanced organi za -

tion and management concepts, modern logistics has a very

important role in improving the overall competitiveness of en-

terprises and the national economy, optimizing the industrial

structure, ameliorating the investment environment and pro-

moting the social informatization. Therefore, modern logistics

has been valued by enterprises, governments and research in-

stitutes in the world and has developed rapidly (Yi, J., 2004).

So, vigorously developing modern logistics has an important

and far-reaching significance to promote the rapidly develop-

ment of the market economy. However, what things are needed

in the establishment and development of modern logistics in-

dustry are not just the funds, equipments and management. And

it is not based on the imitation and transplantation simply. The

formation and development of modern logistics industry is the

objective requirements of the advanced enterprise management

technology. Advanced information technology and standardized

management are the technical foundation of modern logistics

industry established.

The Definition of Modern Logistics

When social economy develops to a certain stage and the

movements of physical goods are guided by a new management

style and mode of operation, the concept of “logistics” is put

forward. It has specific economic background and social sig-

nificance (Ca i, N., 2004). In the self-contained non-commodity

economy age, producer is the consumer. There are no move-

ments of goods, and so, logistics does not exist. In the comer-

cial society, the activities of commodity economy are com-

posed of production, distribution and consumption. Besides,

distribution is the necessary part to link production with con-

sumption.

Logistics involves a series of activities, such as storage,

transportation, handling, packaging, distribution processing and

information. And there have different means and methods of

logistics in the different historical period of development of the

commodity economy. The development of the logistics industry

has gone through three stages, which are traditional logistics of

production for sale, traditional storage and transportation, and

the modern logistics.

The traditional storage and transportation mainly offers ser-

vices like warehousing, transportation, handling, loading and

unloading, and packaging. It is consisted of two kinds of or-

ganizations. One is the professional storage and transportation

companies, and the other one is the storage and transportation

department which is inside the producers, wholesalers and re-

tailers. The early logistics was just a means of transport which

offered goods to producers. The goods which were needed to

transport were stored in the producers’ warehouses. Now, many

transport companies in our country are still operating in this

manner. Later, some of the large logistics enterprises estab-

lished their own storage base, but, generally, there were no

business contacts in different logistics enterprises, and the

transfer of materials was the only link between logistics com-

panies and manufacturers.

Modern logistics is based on the traditional storage and

transportation. Although modern logistics is accomplished

through the third-party logistics, there are essential differences

between modern logistics and traditional logistics in the mode

of operation. The services which are provided by traditional

warehousing companies, such as shipping companies, transpor-

tation companies, warehousing companies and freight for-

warder companies, belong to the category of ordinary logistics

services. With the accelerating pace of global economic inte-

gration, the shortening of product life cycles and the more in-

tense competition among enterprises, modern logistics which

has characteristics of the era has been came into being.

Modern logistics has four outstanding features. The first one

is unified collaboration. The traditional logistics mainly offers

warehouse-to-warehouse services, and the modern logistics

places great emphasis on the workshop-to-workshop services.

Besides, modern logistics has put forward higher requirements

with respect to the accuracy of time, standardization of services

and normalization of procedures. The second one is syste mati -

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zation. Modern logistics combines the various elements of lo-

gistics like transportation, warehousing, handling, loading and

unloading, distribution, processing, packaging and information

processing, enables subsystems work in coordination with the

logistics facilities, technology and information of the third party,

achieves the requirements of customers which involve deliver-

ing the goods with low cost, rapidity, and security. Besides,

modern logistics should offer some extended services, such as

logistics system designing, operation, logistics plan, logistics

management and consulting, to reach their goals of helping

customers, making their own logistics elements tend to com-

plete and systematization (He, R., 2011). The third feature is

informatization. Modern logistics makes the whole materials

circulation process informationized and manages it dynamically

with the advanced network technology. In addition, modern

logistics links every party closely to improve the speed of ma-

terials circulation greatly through the network platform of in-

formation sharing. The last one is standardization. Logistics

standardization formulates the technical standards of various

subsystems of internal system facilities, mechanical equipments

and the special tools which is based on logistics system, and

achieves the results of matching up technical standards with

working standards through researching the various sub-systems.

Logistics standards are divided into logistics software standards

and logistics hardware standards. The software standards in-

clude the uniformity of logistics language, the standardization

of unit, the receipt, the application of bar code and the package

size. And the hardware standards include the pallet standardiza-

tion, container, forklift standardization, trailer load standardiza-

tion, standardized custody facility and other logistics equip-

ments standardization.

The Advanced Ma nagement Techniq ues as the

Motivation of Formation and Development of

the Modern Logistics Industry

• The economics studies three basic questions: the products

or services that society should produce, how to produce and

who could get the products. These three questions corre-

spond to the demand, supply and distribution problems. The

formation and development of logistics industry heads from

the demand of logistics market. And then someone will

provide the related services under this demand. The funda-

mental driving force of the development of modern logistics

industry heads from the modern companies’ advanced man-

agement techniques. In other words, more and more modern

companies prefer to transport goods through the third party

in the fierce competition now. This development power can

be summed up in three aspects.

• First of all, the modern companies have paid more attention

to the cultivation and development of core competences.

The increasing competitiveness in the markets and the more

specialized division of labor in enterprises make companies

focus on growing their core business. Organizations take

the model of outsourcing and outsource their logistics out-

sourcing to the third-party logi stics company which is more

professional. So, they can pay their attention to the core

business and improve their service levels (Sun, L., 2011).

Moreover, companies regard the available profits as return.

And these available profits include reducing costs, improv-

ing service levels and professional standards, increasing the

business flexibility, bettering production efficiency and

making the main industry more concentrated. So that the

manufacturers could focus on developing their core busi-

ness.

• Secondly, according to the development of technology, the

life cycle of products has become shorter and shorter. This

requires companies to offer the demanded products or ser-

vices with the faster and more efficient management and

production technology. The activities of producing and

manufacturing are all based on the plans in most of the tra-

ditional companies. And they don’t attach importance to the

role of the order management. These will lead to some un-

expected results. First, materials can not enter the produc-

tion line immediately. And the finished products can’t be

circulated in time. Then, the logistics cost of enterprises

will be increasing and the overall profitability will be re-

ducing. Above all, the traditional logistics services have al-

ready been unable to adapt to the production operation

mode of modern companies. Unlike the traditional enter-

prises, the manufactory in modern enterprises is based on

orders. In order to improve the efficiency of the whole ma-

terials circulation, companies adopt the fast and efficient

logistics system, use the standardized design, just in time,

full-service and other advanced management techniques,

bring purchase, production and sales into line, and finally

form a horizontal win-win logistics strategic alliance be-

tween supplies and down-stream firms.

• Thirdly, companies must allocate resources and exploit

markets on a global scale with economic globalization and

market integration speeding up. So do multinationals. Be-

sides, they purchase supplies and allocate resources by

means of the third party. In the meantime, enterprises

should expand the global market and promote the circula-

tion of commodities with the aid of a third party.

• All in all, economic globalization and the trend of e-com-

merce network decide that it is a flourish of the logistics

agency industry in the 21st century. So, it is an inevitable

choice to establish a worldwide fast, excellent customer

service system, select the appropriate suppliers and distri-

butors for international purchasing and international mar-

keting with a purpose of accomplishing optimum allocation

of global resources and setting up the corresponding mod-

ern logistics system (Zhang, L. & Shi, L., 2011).

Information Technology as the Technology

Platform of Modern Logistics Developing

Logistics is inseparable from warehousing, transportation, han-

dling, loading and unloading, packaging and other facilities and

services. However, modern logistics is a professional, informa-

tional, normalized and open logistics management system

whose establishment is based on modern electronic information

technology with the development of modern technology infor-

mation and management theory and practice. Logistics infor-

mation technology is an important symbol of modern logistics

sys t em.

In terms of information technology, this system is made of

three parts.

One is the information recognition system. It includes EDI

and automatic equipment identification technology. EDI is

short for electronic data interchange and it is generally defined

that, based on the prior agreement, business partners format the

economic information according to certain standards, and then

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exchange and deal with data which are formatted among their

computer systems through the computer communication net-

work. As an outcome of the combination of modern high-tech

and trade, EDI changes the traditional logistics management

greatly. It makes the whole process of logistics information

handled by a computer automatic processing and need not to

use the traditional paper-based documents any more. From this,

EDI is also called paperless trading. Through some advanced

technological means, the automatic equipment identification

technology could realize the automatic identification and man-

agement of all kinds of objects or facilities (people, materials)

under the different status (dynamic, static or severe environ-

ment). The automatic equipment identification technology cov-

ers the technologies of commodity code, the application of bar

code, radio frequency and so on. Bar code technology is a sig-

nificant means and method of entering data into computer au-

tomatically. The economic benefit of the whole logistics sys-

tem will be improved by collecting, transmitting logistics bar

code information and feedback (Hu, L., 2011).

The second part is material information control system. The

advanced logistics information management system could mon-

itor the spatial-time location of goods in real time. For example,

it can query the geographic location (longitude, latitude and

velocity) of transportation at any time through issuing instruc-

tions, and could be displayed intuitively on the electronic map.

Besides, people could know and control the accuracy of trans-

port operation via global positioning system (GPS). Dynamic

scheduling function allows schedulers to send the dispatching

instructions at any time through control center and then to get

the confirmation messages. The function of storing and analyz-

ing data will make a plan on the transport routes in advance and

record the information in the database for reference and analy-

sis in the future. So, it could achieve the route planning and

optimization. Licensed users could access the information what

they need in any other place easily. Modern information tech-

nology is the technological pillar of modern logistics system.

The third part is the network technique system. The speed-up,

dynamic and interconnected information network is a necessary

condition of guaranteeing the function of modern logistics en-

terprises coordinated, achieving the alliances with other com-

panies and making the logistics service integrated. Many com-

panies make use of the internet platform for dynamic monitor-

ing and managing the logistics commodities. Reasonable inte-

grated logistics network could not only supply the costs effec-

tively which incurs in every logistics link, but also improve the

information management level and customer service drastically.

By this taken, modern logistics is far from a simple combina-

tion of warehousing, transportation, handling, loading and un-

loading, packaging and other hardware facilities, but a pro-

fessional management information system which is based on

information technology. In our country, the hardware facilities

of many logistics companies have reached a considerable level,

but there is still a significant gap between our country and over-

seas in terms of software construction.

Standardization as the Permits of Modern

Logistics Enterprises

Standardization is an important component of modern eco-

nomic, technical and scientific system. It is also an important

technique of modern logistics management. Logistics stan-

dardizations are the momentous methods and necessary condi-

tions to achieve the modernization of logistics management.

The modern logistics and its activities could not be organized

and managed well without the standardization. And we could

reach the highly harmonization of the whole logistics system

and raise the system management level.

Scholars in logistics industry generally consider that the de-

finition of logistics standardization is taking logistics for the

system, setting the technical standards of various subsystems

which include systematic internal facilities, mechanical equip-

ments, special tools and so on, and reaching the results that the

technical standards could match up with working standards

through researching the various subsystems. However, the au-

thor thinks that the issue of logistics standardization is not only

the standardization of internal logistics system, but the stan-

dardization of the whole materials circulation system which

involves the circulation ranging from supplies, manufacturers,

logistics providers, wholesales to retailers. And the essential

question is the standardization of internal logistics system. Lo-

gistics standards are divided into software standards and hard-

ware standards. The software standards include the uniformity

of logistics language, the standardization of unit, receipt, the

application of bar code and the package size. And the hardware

standards include the pallet standardization, container, forklift

standardization, trailer load standardization, standardized cus-

tody facility and other logistics equipments standardization.

The logistics industry is an integrated industry which in-

volves various aspects, such as transportation, packaging, ware-

housing, handling, loading and unloading, distribution process-

ing, delivery and information. The standardization of logistics

is a key way to increase logistics efficiency. The development

of modern logistics industry in our country is based on the tra-

ditional industry. The reasons why logistics is ine f f icient are

that the traditional logistics is divided artificially into several

stages which could not link and coordinate well, and the infor-

mation is unable to be shared with each other. It’s particularly

apparent in many small logistics enterprises. Many logistics

standard systems and important national standards have been

established in our country, such as the Classification and Code

of National Industrial and Agricultural Products (commodities,

supplies), Bar Code in Dispatch Unit, Logistics Unit Bar Code

and so on. But in general, the establishment of our country’s

logistics standardization has shown several lags. So, strength-

ening the establishment of logistics standardization has a great

significance to standardize the management and improve the

international competitiveness of logistics enterprises. However,

we must realize that the establishment of logistics standard

system should depend on the power of government. According

to the standard formulation in our country, the National Profes-

sional Standardization Technical Committee is a technical

working organization which is engaged in the national stan-

dardization working, responsible for the standard technical

focal point work in professional technical areas, and authorize

to be established by Standardization Administration of China

(SAC). With the rapid growth of our logistics industry, it is

imperative to set up a comprehensive national Logistics Stan-

dardization Technical Committee, designate the technology of

logistics enterprises uniformly and promote the coordinated

development of logistics standardization.

In conclusion, modern logistics synthesizes the technologies

of information processing and management like the transporta-

tion, delivery, packaging and many other aspects of commodi-

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ties. These advanced technologies such as EDI, JIT, distribution

plan and green package are the important guarantees for the

healthy development of the modern logistics. Developing logis-

tics industry must insist the guiding ideology that science and

technology constitute a primary productive force. Modern lo-

gistics system could not be established without advanced tech-

nologies of management and information, and standardized

management system.

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