Global Logistics

Danielle Higgins

Liberty University

BUSI604

Key Term and Why You Are Interested in It

        The key term that I decided to research for this week is known as Global Logistics.  The term logistics refers to the movement of finished products, semi finished products, components, and materials between various locations (Satterlee, 2016). I was interested in this topic because I wanted to find out more about how different industries are able to efficiently gather, store, and transport their products. Another reason I chose this term was to see how the cost and benefits vary between different methods of distribution, storage, products, and materials under various circumstances.

Explanation of the Key Term

        Global logistics refers to the management of the flow of goods or services between the point of creation and the point of consumption. The process includes a number of crucial business procedures and practices that relate to storing and transporting goods or services and is concerned with the acquisition of resources along the supply chain. Global logistics includes a wide range of locations, plants, warehouses, vendors, and customers that need to be managed across great distances, time zones, and cultures (Satterlee, 2016).

Major Article Summary

        The major article I decided to use for this week is called “Measuring global logistics efficiency using PCA-DEA approach”. In situation of increasing global trade, concentration of production and economic crisis cause the increasing importance of freight transport and logistics. In that manner, economic performances of a country are very affected by logistics performances ( Andrejic and Kilibarda). Within this article they propose a new methodology for measuring global logistics efficiency that integrates international and domestic indicators into single measure. The Principal Component Analysis-Data Envelopment Analysis used numerical examples, which consisted of eight countries and showed the most important factors affecting the global efficiency.

        Keeping in mind the end goal to enhance exchange streams and nation economies it is important to gauge, screen and enhance productivity of logistics activities. The fundamental issue is the means by which to choose, from indicators, those that best portray the coordination’s action of a nation. Show proposed in this paper joins household and universal coordination’s exhibitions in single measure of productivity.  With the PCA method being used they were able to investigate the importance of indicators. It was observed that qualitative indicators, such as quality of the logistics services and quality of the shipments, are more important than other indicators.

        Within their research they were able to come up with three hypotheses. In the first hypotheses they confirmed that there is significant statistical difference in ranking between proposed model and LPI scores developed in. The discriminatory power of the proposed model is higher than the compared model. In second hypothesis we confirm that quality indicators are very important for the global efficiency measurement. The third hypotheses investigated difference in efficiency scores between countries of the EU and other countries.

Discussion                                                                                                                                                                                                                                                                                

Milan M. Andrejic, & Milorad J. Kilibarda: Measuring Global Logistics Efficiency Using PCA-DEA Approach. Directory of open access Journals.

http://scindeks-clanci.ceon.rs/data/pdf/0040-2176/2016/0040-21761605733A.pdf