Structural Changes in the Supply Chain

Abstract

Logistics is changing from a focus on cost reduction and service improvement at the firm level to an emphasis on supply chain restructuring and organizing to increase overall efficiency and effectiveness. In this article, we focus on structural changes in the supply chain, the results of which are the reengineering of materials management, physical distribution and sales activities. Using case studies, we identified five different structural changes which affected the organization of logistics, marketing and sales activities. By using modern information technology, it was possible to centralize physical and administrative activities and, at the same time, maintain a decentralized sales organization. Total distribution costs were reduced by 30‐50 per cent and customer service was significantly improved.