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1.2. Trends in logistics
The development of trade networks creates various needs for value-added logistics management
and gives rise to a large number of individual trends in logistics and supply chains.
1.2.1. Restructuring of logistical systems
Manufacturers are restructuring their logistics systems by concentrating production and inventory
capacity in fewer locations. Concentrating production capacity enables companies to maximise
economies of scale in production at the expense of making their logistics system more transport-
intensive and lengthening lead-time to customers.
Inventory centralisation, which has been a long-term trend, is now occurring on a larger
geographical scale. Companies have been able to enjoy the inventory cost savings, while minimising
additional transport costs by geographically separating stockholding and break-bulk operations, with
the former becoming more centralised while the latter remains decentralised.
Centralisation has also occurred in parcel and mail delivery systems by configuring their logistics
systems to “hub-satellite” systems in which all but local traffic passes through a centralised sorting
system.
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