Efficiency within the context of this paper means using a production technology that minimizes incurred costs, and leading to the lowest effort – energy saving – needed to produce a unit of output.
Published in Chapter:
Customer-Oriented Global Supply Chains: Port Logistics in the Era of Globalization and Digitization
José Luís Cacho (Port of Sines, Portugal), Luís Marques (Rangel Logistics Solutions, Portugal & Catolica Porto Business School, Portugal), and Álvaro Nascimento (Catolica Porto Business School, Universidade Católica Portuguesa, Portugal)
Copyright: © 2020
|Pages: 22
DOI: 10.4018/978-1-7998-3115-0.ch005
Abstract
Logistic services are central to the design and management of any supply chain. Due to recent technological advances, modern supply chains are challenging traditional market boundaries in ways that both influence and are influenced by consumer behavior (e.g., Amazon, Alibaba, or JD.com). Economically speaking, corporations are changing along the way resources are being used in production. At the firm level, management decisions follow cost efficiency and risk management principles, pursuing a cost-risk tradeoff equilibrium. Theoretically, operations organized within the boundaries of the firm are just those for which the markets are unable to offer a more efficient alternative, whereas the link between buyers and sellers (i.e., demand and supply in the market) is intermediated by logistics services, such as transport, to mention but one. As technological innovation, social transformation, and consumer behavior threaten firms' traditional boundaries, logistics need to adjust and adapt to new and emerging challenges, its costs, and risks to end consumers.