From Supply Chain Management Encyclopedia
Origins and Definitions
There are many definitions of international logistics. One of them, where they could easily find military roots as well as U.S. origin defines the international logistics as negotiating, planning, and implementation of supporting logistic arrangements between nations, their forces, and agencies. It includes furnishing logistic support (major end items, materiel, and/or services) to, or receiving logistic support from, one or more friendly foreign governments, international organizations, or military forces, with or without reimbursement. It also includes planning and actions related to the intermeshing of a significant element, activity, or component of the military logistic systems or procedures of the United States with those of one or more foreign governments, international organizations, or military forces on a temporary or permanent basis. It includes planning and actions related to the utilization of United States logistic policies, systems, and/or procedures to meet requirements of one or more foreign governments, international organizations, or forces. The U.S.-based Council of Logistics Management constructed practically the same by nature but more shorter definition according to which the international logistics was defined as the process of “planning, implementing, and controlling the physical and information flows concerned with materials and final goods from point of origin to point of usage.” Might be the most fundamental professional/academic definition states that the logistics are logistics functions, although many firms do not include all of them under their logistics umbrella: customer service; demand forecasting; documentation flow; handling returns; inter-plant movements; inventory management (inbound, plant, and outbound); parts/service support; materials handling; order processing; plant and warehouse site selection; production scheduling; protective packaging; purchasing; salvage scrap disposal; traffic management; and warehouse and distribution center management. Much more short and clear definition of international logistics defines the international logistics as the process of planning, implementing, and controlling the flow and storage of goods, services, and related information from a point of origin to a point of consumption located in a different country.
Main Goals of International Logistics
The main goals of international logistics are to match and link national parts of global supply chains, overcome international trade barriers of different nature (political, law, cultural, currency, transportation, language, etc.), and minimize transaction costs and risks. The international logiscics is a process developing in space and time simultaneously. After that, there are a set of regulations, rules and conditions that are to be taken into account to receive outputs expected; namely, goods delivered in time, to the rigt place, in right quantity and quality. Sometimes, they call such constellation of «right outputs» (7R-mnemonic, factually) as Intyernmational Logistics Mix that is not quiet correct,in our mind. When a firm becomes heavily involved in international business, logistics is seen as a critical part of the strategic planning process. Nevertheless, before numerous international logistics decisions are to be made (transportation means and arms, Packaging for Export, terms of trade, terms of payment, insurance, etc.), itis necessary to choose the most suitable international business operation. Factually, this is a decision of firm'smanagement about choosing the particular method of international operation  (See Foreign Operations Methods) that precedes and defines a set of international logistics arrangements. However, any internationaloperation – from Importation to Internatuional Management Contract – includes international logistics components. Therefore, an effective international logistics strategy not only offers significant cost savings but also can help firms penetrate new foreign markets. Indeed, the internationallogistics could be considered as including a managerial toolkit related by purpose to the international marketing mix; i.e., matching a domestic marketing mix with a marketing environment of a host country that should provide a global marketing process. With the assistance of an efficiently managed international logistics function, firms can gain economies of scale from increased production, obtain technological advantages from other countries, and expand their markets. As logistics activities become a substantial part of a firm's international operations, the role played by international logistics managers also increases in importance.
Concept of Complex Channel of International Logistics
Almost any of international logistics definitions includes, in implicit or explicit form, the fact that international logistics helps to integrate different parties ща different supply chains throughout the world. Taking into account such term as the "marketing logistics" they could develop the concept of the marketing channel to the complex logistics channel. According to the definition of the American Marketing Association marketing channel is a set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption and, as such, which consists of all the institutions and all the marketing activities in the marketing process. A marketing channel alone is not sufficient to finalize a transaction and physically transfer goods from a seller to a buyer. For this purpose a part of logistics serves, known as the physical distribution which is concerned with the transporting of merchandise, raw materials, or by-products, such as hazardous waste, from the source to the customer. A manager of physical distribution must also assess and control the cost of transporting these goods and materials, as well as to determine the most efficient way to store them, which usually involves some form of warehousing. However, more than goods flow in international logistics. The payment must go from the buyer to the seller; and there is a flow in both directions of “paperwork” (documents may be on paper, or increasingly in electronic form). To explain the system of various flows one can use the concept of complex channels of international logistics. One of textbooks on international logistics splits the complex channel of international logistics, - where goods move, as do orders, payments, and documents, - into three partial channels, which are linked to the extent that sales or payments trigger release of goods to the buyer, and that documentation must be complete before goods can move forward:
- The transaction channel, which handles the buying, selling (negotiating and contracting) and collection of payment;
- The distribution channel, through which the good moves physically;
- The documentation/communications channel.
- ↑ http://www.thefreedictionary.com/international+logistics
- ↑ Council of Logistics Management website: http://www.clml.org
- ↑ 3.0 3.1 Wood, D.F., Barone, A.P., Murphy, P.R., Wardlow, D.L. International Logistics, Amacom, New York, etc., 2002, p.5
- ↑ Encyclopedia Britannica (1993), Chicago, Encyclopedia Britannica, Inc., Vol. 28, pp. 878–882.
- ↑ David, P., Stewart, R. International Logistics: The Management of International Trade Operations - Thomson: Mason, Ohio. 2007.
- ↑ Carter,J.R.,Pearson,J.N., Li Peng. Logistics barriers to international operations: The case of the People's Republic of China - Journal of Business Logistics, 1997
- ↑ Welch, L.S., Benito, G.R.G., Petersen, B.: Foreign Operation Methods: Analysis, Strategy, and Dynamics: Edward Elgar, London
- ↑ Zinn, N., Grosse, R. Barriers to Globalization: Is Global Distribution Possible? International Journal of Logistics Management 1, no. 1 (1990): 13-8.
- ↑ Slater, A. International Marketing: The Role of Physical Distribution Management, International Journal of Physical Distribution and Materials Management 10, no. 1 (1980): 60-5.
- ↑ Stock, J.,Lambert, D. International Physical Distribution-A Marketing Perspective, International Journal of Physical Distribution and Materials Management 12, No. 3 (1982): 4-5.
- ↑ American Marketing Association
- ↑ http://www.referenceforbusiness.com/encyclopedia/Per-Pro/Physical-Distribution-Management-Transportation.html