ACTIVIDAD 12 EVIDENCE 1: WRITING AND ESSAY

ABOUT LOGISTICS COSTS

PRESENTADO POR:

JEANY MARCELA RAMOS PEREZ

JENNIFER ANDREA CUERVO RAMIREZ

MARLY YISEL CASTELLANOS ARIZA

SERVICIO NACIONAL DE APRENDIZAJE SENA

TECNNOLOGO EN NEGOCIACION INTERNACIONAL (2104843)

2021
 Introduction

We will define the importance of international physical distribution, what its main objective
is that what advantages we obtain with this medium, we will also know the disadvantages
that this method brings, defining in a detailed way if it is viable or not to take it as a
distribution method for exports or imports of a company. large company that wants to export
or import all over the world.
To being with, we must take into account that logistics and international physical distribution
are key in foreign trade operations, given that logistics is key to achieving maximum
efficiency and effectiveness, which can be summarized as follows: Efficiency because the
less time a product remains in each of the stages of a logistics chain, the lower costs will be
added to the final value of the product and the market will be supplied more quickly and
effectively because in most cases, lower costs can be translated into higher operational
profits. For this reason, there are two factors that determine the operation and that we must
analyze: Time and costs, therefore,

LOGISTICS GLOBALIZATION
Economic globalization is the obvious result of technological progress and has occurred
especially through trade and financial flows. The Internet and communications can be seen
as the lifeblood of globalization. But if there is one sector that has definitely contributed to
turning the planet into a chessboard where products can be manufactured thousands of
kilometers away from their final destination, it is logistics.
But this globalization has also created a series of advantages and disadvantages for logistics
operators themselves.
Knowing how to adapt to the changes and effects of economic globalization can make or
break a company. Most of the effects are ambiguous, i.e. beneficial on the one hand, but
detrimental on the other.
Advantages of globalization in logistics
The benefits of operating in a global environment are obvious. The advantages of
globalization are:
 Increases competitiveness. Companies' efforts are aimed at being better than the
competition. And better means to be more efficient in time and form, that is, to
deliver the product in excellent conditions in the shortest possible time.
 Improved management with a global vision of the company. Encompassing so
much space implies that all business processes must be one, all areas
 intercommunicate and interact. The system starts at the suppliers of the suppliers
and ends at the customers of the customers.
 Cost reduction. Being able to choose a location and premises anywhere in the
world helps to reduce costs. Each country has its own labor conditions, which can
increase or increase, for example, the price of labor. However, this must be
combined with transportation costs.
 Specialization and localization. Each plant specializes in a certain point of the
process and this allows it to work on its improvement, knowing the needs of the rest
of the agents in the logistics process. Being able to distribute the logistics system
among different geographic points or to concentrate them in the same one results in
the cost reduction mentioned above.
 Increased professionalization and modernization. Globalization requires
companies to implement best practice policies, as well as KPIs or performance
indicators. It also demands modernized computerized systems.
 Market expansion. Globalization allows companies to access products and markets
that were previously unattainable and thus increase their potential customers.
Disadvantages of globalization in logistics
But globalization in logistics is also associated with some disadvantages, such as
these:
 Broad operational risks. Globalizing production means working in different
locations, which exposes the company to economic and political risks. The quality,
safety and regulation of each site, as well as the risks of different legislation, can be
a barrier to logistics work. The company is therefore dependent on external factors,
which it must be able to calculate.
 Risk of suffering the "bullwhip effect". Known as the "bullwhip effect", the
increase in demand for a product can produce mismatches between its real demand
and the perception that the actors in the logistics supply chain end up having of it. If
the large amount of information generated by the globalized world is not deciphered
in an optimal way, this can lead to a serious problem, for example, of stock
accumulation.
 Zero margin for error. With the internationalization of trade, logistics companies
cannot afford to make even the slightest mistake. A delay in the delivery of a
product, either from the supplier to the company or from the company to the
customer, is a stain that no logistics operator wants to have.
 Coordination risks. When operating in different countries, you have to deal with
language problems, differences in working conditions and even cultural norms.
 Distance. It can be a problem as the unit transportation cost per product rises and
the distributor's warehousing cost decreases. It requires the search for a balance that
both supplier and company are willing to support.
 Reduced inventories. In order to be efficient, it is necessary to operate with
reduced inventories, which is a challenge to multiply the quality and reliability of
the logistics process.
Globalization in logistics is a source of advantages and disadvantages, opportunities
and risks that must be identified in order to make the best decisions.

CONCLUSIONS

According to the above, it has been shown that international trade contributes
significantly to the development and economic growth of a country, therefore, the
logistics system is becoming the primary element of this. Consequently, the logistics
system of the countries has a direct impact on the costs of the logistics operations of the
productive chains of the sectors of the economy. The level of development of the
system demarcates growth economic and the ease of integration of a country into the
world economy.

In the Colombian case, the logistics system is currently lagging behind so the main
reason for the excessive costs assumed by exporting companies of the country, is the
cost of transportation due to the delay in infrastructure (rail, air, maritime and land)
making it the most expensive item when it comes to export. The Colombian
infrastructure applied to foreign trade indicates that the incidence on the costs and
operations of exports is direct and that in to a large extent, the international indicators
that position Colombia in the last efficiency positions are given for reasons of
corruption, lack of administration and low government investment in the sector. Giving
as results in products with high logistics costs that significantly affect exporting
companies. The impact of the national logistics infrastructure on exports Colombianas
is highly expensive in monetary terms, in time and in formalities.
So it is undoubted that the country's logistical backwardness makes trade difficult.
emerging with the new treaties that are being signed and those already are in force,
putting Colombian companies in a notorious disadvantage. Therefore, it is important for
the government to work precisely on two fronts to at the same time: on the one hand,
improve the transport infrastructure that allows reducing export costs to those who
decide to bet on the foreign market, and for another, to promote the efforts of
entrepreneurs to improve their products to adapt to the global market.

On the other hand, the country requires efficiency in terms of competitiveness. It is

undoubtedly, the country is not competitive in terms of infrastructure and logistics,
has stayed with the same tracks of a century ago and until now its
improvement has depended on concessions established by the government to
raise competitiveness and the level of response to the international market.
It is clear that the competitiveness of a country goes hand in hand with indicators such
as corruption, infrastructure, bureaucracy, among others, noting that Colombia is ranked
133 out of 144 countries analyzed in the Index of Global Competitiveness, a position
very similar to the Logistics Performance Index that places it in the last positions of the
countries analyzed. For what indexes such as corruption at the national and local levels
that slow down productivity and foreign trade flow, leading the country to prevent
economic development from grow as expected.

Similarly, it is also important to note that given the growing number of trade
agreements that are registered in the country, the intervention cannot be postponed
direct from the State to promote the development of local entrepreneurship, so that It is
important that both the State and Colombian businessmen strive to compete through
innovation and technology.