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The Trend of Logistics Development in China Essay

With China’s entering WTO and the coming of the economic globalization, modern logistics has stepped into a far increased stage. In 2003, the logistics in China occupied RMB 240 billion dollars, compared with that in 2002, which increased by 26%, it is also estimated that during 2000 – 2005 the increasing rate of the 3PL marketing will reach 25% in China. Logistics industry, which is related to the producing manufacturing industry and commodity circulation industry, not only can help the enterprises optimize the resource configuration, lower the product costs, but also improve their competition capability.

Logistics is also a systematic project that includes manufacturing, purchasing, storage, transportation, forward, distribution and sale. Now days, logistics and the supply chain management is becoming the core issue in world business field. Facing the immature logistics market in China, as far as the manufacturing, producing industry and the circulation industry are concerned, it is most important and urgent to positively evaluate the development tendency and meet the international requirements on the logistics as soon as possible.

Development of Logistics Industry in China The larger of China’s logistics, but the rationalization of logistics gaps. China’s logistics industry has yet to establish a statistical system based on, cannot accurately reflect the overall size of logistics. The performance of the logistics organization is not quite reasonable, subject to resource distribution, circulation system, the industrial layout and organization of production, materials far away, circuitous flow is serious; a large number of logistics activities, the lack of specialized logistics services organization, logistics and high cost.

Other logistics companies generally low level of Information technology, as a constraint to the development of logistics enterprises in China the biggest bottleneck and obstacles. Current logistics enterprises in the Computer software applications, most still at the point-type application and the application of a sector, individual enterprises of the enterprise information Management, with customers to achieve some or all of the information between the shared computer network is only a few very small number of home.

Logistics information technology has become mandatory access developed countries eligible for logistics enterprises, such as Just In Time(JIT), Material Requirements Planning 1(MRP1), Material Requirements Planning 2(MRP2) and so improve logistics efficiency and reduce logistics cost of modern management model is built on the information to adapt its technology to support the premise developed the China’s logistics market is fiercely competitive low-end but high-end logistics market, but few people interested in the phenomenon exists, the overall low level of information, it cannot be implemented as JIT, MRP1, MRP2 and so improve logistics efficiency and reduce logistics cost of modern management model, naturally only in the low-end logistics market flame. Quality of personnel logistics enterprises, in particular the quality of leadership is difficult to adapt to the requirements of modern logistics operations.

China’s abundant human resources, labor costs are low, employment or logistics enterprises in the selection of mechanical equipment with modern, often choose to replace some of the modern employment of machinery and equipment more economical, because it has certain substitutability between. But man is no substitute for modern information technology to bring the efficiency of the logistics enterprises, the current leadership of the state-owned logistics enterprises personnel structure are mostly the end of the planned economy to work, go step by step in the enterprise leadership positions, management and thought leader in the factors that can not completely avoid inbreeding, plus has not been enhanced, the theoretical knowledge of the Training system, making it difficult to adapt to new business ideas and forms of development, lack of awareness development.

Computer application is limited to mechanical and electrical integration from abroad, no paper into the main features of the distribution automation, modernization far, China’s logistics industry, the biggest difference between the developed countries a direct manifestation of this is it. Therefore we can say, Information technology logistics industry in China the biggest gap with developed countries, but also restricting the development of logistics industry in China is a bottleneck. Development trend of China’s logistics industry As economic integration, and Computer and communication technology continues to develop, greatly promoted the development of the logistics industry, to quickly become a global logistics industry with great potential and the development of new service industries. Modern logistics has been our government, enterprises attach importance, and there has been rapid development momentum.

A high degree of government from the industry will support the development of modern logistics as the sustained economic development, improve the investment environment, improve Social and economic benefits, reduce social costs, make full use of the important strategies of social resources, production and logistics as a business enterprise to the third profit source and access to enterprise competitive advantage of strategic opportunities, traditional logistics (transport, warehousing and other enterprise) to the development of modern logistics as the re-build companies, seeking new business profit growth, further development of the enterprise’s strategic objectives.

In China, the main trend of development of modern logistics in the following aspects. Integration of logistics operations the essence of modern logistics in its system integration concept that integrates the traditional area of operation, the production, arketing, packaging, handling, transportation, storage, distribution, circulation, processing, logistics and Information processing, decentralized, activities across the enterprise sector integrated, organic combination, as a system to manage, the operational aspects of the logistics activities effectively combined to form a comprehensive customer service-oriented capabilities, saving distribution costs, improve circulation efficiency and effectiveness. Logistics Management Information system is a large span system. Not only a wide range of logistics activities, involving many departments, and has been in a dynamic process. With the global economy, goods and production factors in the global free flow of an unprecedented rate.

Logistics activities, flow rate also entered an unprecedented phase of development, logistics positive globalization, networking and information-oriented, EDI technology and Internet applications, so the logistics efficiency depends more on information management technologies ; the popularity of Computer and general application of bar code technology, provides a more demand and inventory information to enhance the scientific level of information management, demand for the commodity level in a variety of flow more easily and quickly. Information has become the core of logistics activities has become the driving force of logistics innovation. Social logistics resources with market-oriented economic and social development, on the one hand more and more detailed specialization, on the other hand the increasingly close cooperation between professionals. Production enterprises and the retail industry’s need for raw materials, intermediate products, and final products are mostly made up of different logistics centers, wholesale centers and distribution centers in order to achieve fewer inventories and zero inventories.

Trend of modern logistics community social and economic activities is the development of economies of scale in logistics, logistics inevitable result of comprehensive utilization of resources. In the big cities or professional modern integrated logistics park, logistics center, logistics base has become a common phenomenon. Integrated logistics system cannot do without transportation and warehousing logistics. Storage requires a high degree of mechanization and modernization, automation, standardization, Information, and to organize efficient, machine, material systems; and transport modernization requires the establishment of railways, highways, waterways, ir and pipeline integrated transport system, which is essential to the modernization of logistics conditions, survival and development of modern logistics necessary condition.

Integration of third-rate general circulation in accordance with Law, business flow, logistics, information flow is the separation of the three streams. To flow of material can be achieved using the value, after the business flow, material information on the change of ownership; logistics solution is the production of material from its geographical area of the displacement of its consumption cannot change the ownership of material; information flow solution the flow of information between the main transmission.

In modern society, due to the different materials, products, or the transfer of goods means the formation of the circulation and marketing of different forms, in order to adapt to this change, there are many countries in the world of logistics centers; distribution centers have basically achieved the flow, the unity of logistics and information flow. In addition, the agency also made the implementation of modern logistics more scientific and rational, because the circulation system in this manner more conducive to the implementation of third-rate one. Third-rate one has become an important symbol of modern logistics. More competitions in further from the foreign investment and private enterprise in China After China entering WTO, the distribution system has opened to the outside. The logistics and transport are facing the same situation. The foreign investment corporation will be allowed to open in the full sides.

Because of the large logistics demands and weak supply ability in China, many foreign logistics companies gave expected too much for the market. Some of them, have entered into the Chinese market and taken part in the competition, such as UPS, FedEx, DHL, TNT etc. Some of them allied the domestic companies to reform the professional logistics. On one hand, they provide their customers with the professional services, which include national wide distribution, international logistic service, and multimode transportation. With more open policies issued by China’s government, the private corporations will bring more challengers to the traditional state-owned companies in the long time.

The Corning of the integration Storm in China According to the industry evolution from the international famous consulting corporation, the evolution of a industry usually includes four stages: primary establishment, normalization stage, centralization stage, balance and unification stage. When a industry state in a go-between stage from the primary establishment to the normalization, there will be many combinations and reorganizations in which some small companies will be absorbed, reorganized, even died; meanwhile, the large enterprises will improve their impacts further. As for Chinese logistic market, its development just belongs to this stage. Conclusion

The logistics resources in China are very rich, As for the storage are, there are more than 250000000 square meters in circulation field, which is distribution in the station, dock, port, warehouse, stock etc. this kind of distribution has formed the nation-scattered condition. Many of them have been regarded as the collection of enterprises, funds, information etc. and are full of powerful potential. In order to ensure the logistics development in a fast, healthful way, and China’s government should enact more advantages policies and measures, give more support; for logistics enterprises after seeing the development tendency and the industry characteristics, they would choose the personalized way. Generally speaking, our companies of China can have clear view on the further development; take the opportunity to succeed in the future competition.


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