3.1 Introduction
The focus of modern business is very much on the integration of the internal and external functions of the firm in order to achieve strategic objectives; and one of the key areas of increased focus is the supply chain. It has become quite obvious that the competitive advantage that a firm can gain through its supply chain is intimately related with its logistics network.
Think of this in simple terms of a 'system' of roads. The efficiency with which you can reach a place in terms of 'time' and 'cost' is very much dependent on how the road system is made up between the origin of your journey and the destination. This road system is not only the network of roads but also the vehicles in use, the capacities of the road segments, the quality of the roads, charging systems related to various segments of the road etc. In terms of a supply chain, instead of this simple road system we have plants, warehouses, retail outlets etc. and the flow involves movement of 'materials' through this network. The logistics network is composed of all these physical elements in addition to the information system which drives the physical flow across the supply chain, and the materials or goods which flow through the network at any stage.