The Influence of the Logistics and Supply Chain for the Improvement of the International Trade

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University Ss. “Cyril and Methodius“- Skopje

Faculty of Economics

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Subject: The influence of the Logistics and Supply Chain for the improvement of the International Trade

Made by: Mentor:

Daniela Davkova 52532 PhD. Lidija Pulevska Ivanovska

Jelena Zafirovska 52587

Skopje, 2012

Contents:

Introduction..........................................................................................................................3

1.Logistics moves the entire economy…………………………………………………….4

2.Structure of Global Trade……………………………………………………………….4

3.Trade Facilitation………………………………….…………………………………….6

4.The close relationship between international economic growth and logistics……….….8

4.1.The effect of goods volume…………………………….……………………….…9

4.2.The effect of goods structure…………………….………..……………………….9

4.3.The effect of logistics………………………..……………………………...……..9

4.4.The effect of integration………………………………………………………….10

Conclusion…………………………………………………………………………….....11

References………………………………………………………………….…………….12

Introduction

Organizations are facing increased global competition, economic uncertainties, and changing markets. Technology is changing the way we conduct business and manage information. Outsourcing of goods and services enables companies to take advantage of lower costs in areas such as labor, energy, land and capital. By doing this, companies hope to lower their overall cost structure, improve profit margins, and enhance product quality, reliability and distribution, thus allowing them to compete more effectively. Suppliers and vendor partners may be located in the same city, region or country. But they are just as likely to be located halfway around the world, adding new challenges to business management. The growth of international strategic partnerships has risen exponentially in the last twenty years. Competing in a global marketplace has made it increasingly important to align business strategies with a risk management strategy that includes strengthening global supply chains and vendor partnerships. In the near future, it is supply chains that will compete, not companies. Global supply chains must be carefully selected and monitored to ensure the competitive edge required to achieve success in the global market place. Typically, the first order of business has been logistics and operations.

1. Logistics moves the entire economy

Economic developments in recent years have led to the creation of complex company networks and systems of goods flow - in the process, the globalization of procurement, production and sales as well as the division of labor have increased. In addition, the complexity of international logistics systems in many sectors has grown as a result of increasing product variations and differentiation. Another factor is that many companies are concentrating on their core skills and are reducing their vertical integration. The efficient management of the resulting global flows of goods has boosted both the business and economic significance of logistics.

Structure of Global Trade

International trade, both in terms of value and tonnage, has been a growing trend in the global economy. It is important to underline when looking at the structure of global trade that it is not nations that are trading, but mostly corporations with the end products mostly consumed by individuals. Inter and intra corporate trade is taking place across national jurisdictions is accounted as international trade. The emergence of the current structure of global trade can mainly be articulated within three major phases: • First phase (immobile factors of production). Concerns a conventional...
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