To continually thrive in the industry, there are three affecting factors logistics companies need to take care of. These are certain relationships that have either direct or indirect effect on the logistics industry but they must give a committed focus on if they want to stay in business.
Since there are a lot of logistics companies in the Philippines, competition is highly present. Competition is brought by consumers, changing behavior and it has an effect on the product costs and differentiation, thus acts as a regulatory function in balancing demand and supply. As a result, the range of services that logistics companies offer in the Philippine market is influenced by the level of competition the industry currently has.
Also, the diminishing levels of inventory affect the increasing competition. Whenever products aren’t available, shipping schedule is also affected. Mode of transportation is also another contributor as it directly affects the efficiency of the service.
Delivering product is the core reason why logistics companies exist. They are intended to ship products and materials for distribution. In shipping products, logistics companies must consider inflation rate. The value of money changes and product prices rise quickly as the prior falls. Warehousing cost is affected by this.
The density of the product is also a variable in good product related. When products to be delivered are numerous or in bulk, transportation cost decreases. But on-time delivery is not the only important thing to customers; products should be delivered to them in pristine condition. Aside from gaining plus points from the customers, products delivered in good condition also help logistics companies to decrease material handling costs. Moreover, there are products which need special handling. This increases transportation, warehousing, and material handling costs so it would be better if products are carefully chosen according to the company’s capability of handling.
Another affecting factor is the distance between manufacturers, suppliers and market. If the three, for instance, are located within the same province in the Philippines, logistics companies can have a significant decrease in cost. Materials and equipment could also be utilized sufficiently. However, if they are located in far distance locations from each other, expect cost to indefinitely change for the worst.
Success in logistics companies contribute in the over-all economic growth of the country. If not because of the logistics companies formulating useful supply chain management in the Philippines, there would be no definitive direction in supply and demand prospective. Logistics companies are the unsung heroes of not only product distribution and infrastructural projects, but also of the whole anatomy of commercialism.