LOGISTICS

The principle of Logistic and Management

The principle of Logistic and Management

Introduction

Logistics is the overall management of the flux of commodities, selective information and other resources, including free energy and individuals, within the provenience and the place of economic consumption with the objective of meeting the demands of customers (especially, military organizations). Logistics postulate the consolidation of data, transportation system, armoury, reposting, material-wielding, and packaging and promotion. Logistics management is that component of the supply chain which projects, enforces and checks the effective, frontward and overturns flux and storehouse of commodities, services and interrelated data (Branch,Pp.27,, 2008).

Executive Summary

The paper describes the international logistics and the PESTEL analysis in terms of global industry. In the business sector, logistics might have either inner focus (inward supply), or outside focus (outward supply) tracking the flux and reposition of materials. The primary works of a qualified logician include stock management, purchasing, transport and shipping, reposting, consultation and the coordination and designing of these activities. Software system is used for logistics mechanization, which aids the supply chain industry in automizing the workflow as well as management of the organization. Production logistics assures that each machine and workstation is being flowed with the right merchandise in the right measure and lineament at the right point.

Macro external environment here includes the factors such as issues related to politics, economical reforms and achievements, social behaviour, technological enhancements and inventions, environmental changes and environmental concerns and legislation and legislative changes. All these factors bear a significant effect on any industry and business. A business has take into consideration all such effects and then formulate its strategies and policies to work along with them and prosper.

Discussion

PESTEL analysis tool helps in determining the effect of all such factors on an industry and businesses. With the help of PESTEL analysis we will be seeing the affects of such factors on Indian Bakery and Dairy Industry. “PESTEL analysis is a technique for identifying and listing the political, economic, social, technological, environmental and legal factors in the general environment most relevant to an organisation.” (David, Pp.45, 2010)

Political

Exemption on Customs Duty on Sugar Raw Material Import

Due to the shortage in the production of sugar the deadline for the exemption on customs duty on raw sugar imports has been extended by the government.(Roberson,Pp.27,1994) Duty-free sugar imports extended till April 2011, Business Standard). Since sugar is a major input in the bakery, the price of sugar highly influences the price of inputs of the bakery industry. Exemption on customs duty will help in purchasing sugar at lower cost, which in turn will control the cost of production.

VAT on Biscuits

The VAT of 12.5% on Biscuits, being the only processed food item to attract such high VAT rates, will affect the pricing of the product. Biscuit prices to rise by 10%, The Economic Times). Price of the biscuits might need to be increased due to the high VAT rates which may result in switch of brands due to the highly competitive market.(Rushton,pp.55,2007)

Removal of Import Duty on Dairy Products

The whole-sale price ...