CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF STUDY

Logistics is that part of the supply chain process that plans, implements and controls the effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption, in order to meet the customer’s requirements (Reji ismail, 2008). Logistics is the process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption for the purpose of conforming the customer requirements (Amercian council of Logistics management, 2011). Logistics essentially a planning process and an information based activity. The science of planning, organizing and managing activities that provide goods or services Logistics information system (LIS) involves the integration of information, transportation, inventory, warehousing, material handling and packaging. Logistics information system, information can be as lifeblood of a logistics and distribution system.

The effectiveness and accuracy of distribution systems depend on the transfer of information. Logistics information system holds the whole system and coordinates all the components of logistics operations: planning and coordination and operation. Planning and coordination defines nature and location of customers that supply chain operations seek top match to planned product and services and promotions (Shivani Dubey and Dr.Sunayana Jain, 2014). A logistics information system links up the logistical activities. It integrates a number of information sources, including the order information, purchasing information, production information schedule, the packaging information schedule, the transport and warehousing information, the distribution information, the payment information and the delivery information. It serves to enable logisticians retrieve date as and when it is required, process data through the system and analyze data. (Voortman.C, 2004). LIS is an information system that provides management with relevant and timely information related to logistics. Implementing information technology in retail outlets to bring number of benefits in that industry. LIS as a computer-based information system that supports every aspect of the logistics management process, which involves the coordination of activities, such as scheduling, inventory replenishment and material flow planning. Through Information System, suppliers, manufacturers, and customers are integrated into a logistics network for efficient supply chain management.

The global nature of logistics now requires information systems that enhance inventory control, track orders and materials and monitor resource utilization. Information systems and computer technologies are vital to the development of an organization willing to understand and attain to customers’ requirements and needs. The ability of a company to optimize its logistics costs and levels of customer service is affected by the LIS it uses. Add that these systems are extremely important in reducing inventory and lead time along the supply chain. The effectiveness and accuracy of distribution systems depend on the transfer of information. Logistics information system holds the whole system and coordinates all the components of logistics operations: planning and coordination and operation. Planning and coordination defines nature and location of customers that supply chain operations seek top match to planned product and services and promotions. According to the Council of Supply Chain Management Professionals (previously the Council of Logistics Management) logistics is the process of planning, implementing and controlling procedures for the efficient and effective transportation and storage of goods including services and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements and includes inbound, outbound, internal and external movements.

Third-party logistics (3PL), a relatively new industry, has gained momentum since the emergence of global market and the Internet, in particular electronic commerce (e-commerce). Global competitive-ness places more pressure on companies to improve their delivery performance of products and services to customers. In an effort to improve the quality of delivery service, companies have outsourced their logistics services, including packing, warehousing (inventory management) and shipping of goods to customers. Communication plays an important role in integrating the activities along the logistics value chain. Information technologies such as electronic data interchange (EDI), the Internet, World Wide Web (WWW) and e-commerce have contributed greatly to improving communication with partners in the logistics chain. In particular, real-time information systems such as web-based logistics information systems help to improve 3PL services. In this paper, a case study of e-logistics is used to illustrate the implications of information technology, in particular the Internet, WWW and EDI, on the performance of the logistics value chain. A framework based on the literature survey and case study is proposed to help companies develop an elogistics system to improve their competitiveness.