Increasing the Company's Profitability through Logistics Management

• Author: Mihail Romulus Radulescu - Victor Constantin Ioane - Ioana Ceausu - Ioana Florentina Savu
• Position: Postgraduate student, Academy of Economic Studies Bucharest, Romania - Postgraduate student, Academy of Economic Studies Bucharest, Romania - Postgraduate student, Polytechnic University of Bucharest - Postgraduate student, Academy of Economic Studies Bucharest, Romania
• Pages: 582-587

European Integration - Realities and Perspectives 2012

582

Increasing the Company’s Profitability

Through Logistics Management

Mihail Romulus Rdulescu

1

, Ioane Constantin Victor

2

,

Ioana Ceauu

3

, Ioana Florentina Savu

4

,

Abstract: The objective of the paper “Increasing the company’s profitability through logistics management”

is to present the significance of organizing an efficient logistics activity and the challenges that the companies

are facing in order to obtain full advantage from using lo gistics as a competitive tool. The companies’

dependence from the strategic decisions belonging to the s upply chain stands as a reason for the ever growing

interest towards Supply Chain Management and towards applying inn ovative processes that will offer an

advantage when faced with increasingly tougher competition from domestic or foreign companies. The

company’s characteristics can be subject to deep changes through decisions pertaining to the supply chain;

these decisions are vital to the company’s productivity and co mpetitiveness. If the logistics’ role in increasing

the company’s profitability is acknowledged, then implementing complex technologies and investing multiple

factors into improving logistical performance is fully justified. Customer orientation a nd focusing on key

activities, which need to be performed daily in order to meet customer demand are absolutely necessary in a

system which implies fast reaction to market changes. The managerial way of thinking has changed

significantly in the last years, because of the highly global c ompetitiveness, the pressure to reduce costs,

focusing on the company’s central c ompetence. The principle of functioning is an aggregate system a pproach

for the entire flow of information, materials and s ervices beginning with supply of raw material, processes

and movements inside the factories and warehouses, until the products reach the final customer.

Keywords: logistics; supply chain management; outsourcing; distribution; added value

JEL Classification: M21- Business Economics

1. Introduction

The “Logistics” term comes from the way the companies relate to each other. If we start our research

with the provisioning department and we go all the way of provisioning we identify a number of

suppliers but for each one of them we find one or more suppliers. The result is provisioning network

or a series of chains. These networks can become easily very complex. The purpose of supply chain

management is to reduce the risks that may occur in the processes, by acting in a positive manner in all

that concerns inventory, time cycles, processes, but mostly in satisfying the final customer. The focus

is on optimizing the system. The instruments that assist the efficiency of the chain activities are

Forecasting, General Planning, Inventory, Daily/Hourly/ Planning. In order to develop forecasts a

common database must be used. The forecasts become therefore entry dates for general planning. This

general planning establishes restrictions and directions for the Inventory, thus through it can be

determined the need of workers and the equipment planning.

1

Postgraduate student, Aca demy of Economic Studies Bucharest, Romania, Address: 6, Piata Romana, District 1 , Bucharest

010374, Romania, Tel.: +4.021.319.19.00, Fax: +40 21 319.19.89, Corresponding author: radulescuromulus@yahoo.com.

2

Postgraduate student, Aca demy of Economic Studies Bucharest, Romania, Address: 6, Piata Romana, District 1 , Bucharest

010374, Romania, Tel.: +4.021.319.19.00, Fax: +40 21 319.19.89, e-mail: ioane_victor@yahoo.co.uk.

3

Postgraduate student, Polytechnic University of Bucharest, 313 Splaiul Independentei, Sector 6, Bucharest 060042,

Romania, + 4 021-402 91 00, Fax: + 4021-318 10 01, Romania, e-mail: ioana.ceausu@gmail.com.

4

Postgraduate student, Aca demy of Economic Studies Bucharest, Romania, Address: 6, Piata Romana, District 1 , Bucharest

010374, Romania, Tel.: +4.021.319.19.00, Fax: +40 21 319.19.89, e-mail: buduioana@yahoo.com.