Internet transactions and physical logistics: conflict or complementarity?

Every business can be described in terms of flows – both of materials and of information. Materials flow into the company, between activities within it, and in the form of finished goods and services from the company to its customers. Simultaneously, there are flows of information in the reverse direction that provide valuable data for the system: feedback from the marketplace in the form of customers’ orders, customer reaction, and information on needs and wants; flows of information within the company that provide data in the form of inventory schedules, production schedules, etc., and orders from the company to outside suppliers. In one sense the whole company and the market in which it operates can be regarded as a series of linkages and relationships, and the company’s operating efficiency can be seen to depend on how well these connections work. If the system can be made to flow smoothly, at minimum cost, then the chances are that the overall company performance, measured by any criteria, will be high. In practice, however, it is very common to find bottlenecks and poor integration between different parts of this system, with consequent unsatisfactory performance.