Home > Economy > Professor Slobodan Aimovi, PhD, University of Belgrade's Faculty of Economics: Logistic victory over the coronavirus

Professor Slobodan Aimovi, PhD, University of Belgrade's Faculty of Economics: Logistic victory over the coronavirus

The 'corona wind' first seriously disrupted logistics (especially transport), but logistics quickly 'came to its senses', so to speak, and in the end, beat the coronavirus while emerging even stronger out of this 'fight', unlike any other business activities.

There is nothing unusual about the word 'logistics' appearing in everyday conversations. There are many types of logistics – economic, technical, war, media, political, as well as those that are 'on the other side from the law', as it were. “He provided logistical support” and 'logistics' really are a pleonasm, because logistics, with all its operational aspects, has, at least to date, been treated as support for that company’s core business. But lately, and particularly within the post-corona economy, logistics and supply chain management have increasingly become a generator of competitive advantage and a business driver for any many companies. Obviously, this is much more applicable to other countries in the world than our region where logistics, despite all the improvements (primarily in the shape of new motorways, modern warehouses, improved modes of operation, etc.) continues to be a problem, at least based on the World Bank's Logistics Performance Index research.

In modern business, logistics is really a multifunctional area, with continuous 24/7 work operations. It is not easy to identify a lot of business areas with your a demanding and sophisticated selection of activities as logistics. Paradoxically, logistics activities in many cases are invisible and taken for granted. Namely, end consumers, but additionally all of the participants within the supply chain, consider it normal and implicit the best product is available at the proper time, in the right place, within the right quantity with very competitive delivery costs. Only when there's a delay in the supply process, deficiencies in products on supermarket shelves and/or production inputs, the significance of logistics involves the fore.

The coronavirus pandemic has swept through the world several months ago. It stopped businesses right where they are, emptied out factories and shopping centres, de-socialized many societies as well as 'threatened' that individuals will go hungry and that certain products will appear reduced from shop shelves. It had been then when all the Doubting Thomases of the world remembered logistics, how you can deliver something somewhere, what type of transport to use, which warehouses to store it in, which stocks to keep as optimal, maintaining the level of customer support considering extreme market volatility (remember, back on 15th March, how individuals our country went on a rampage, buying huge amount of cooking oil, flour, toilet tissue, etc., fearing what tomorrow brings). During those times, it was particularly important to organize logistics and the entire pharmaceutical supply chain, due to the sensitivity of the products and also the extremely increased demand for them.

It is safe to state that, during those first few months from the pandemic, an efficient logistics system stabilized the marketplace in all countries, led to the gradual balancing from supply and demand, eliminated people’s fear that something would disappear from the market and they would remain hungry and thirsty, as well as that genuine enough medicine or ventilators for every patient. With some exceptions, there wasn't any lack of goods on store shelves, production processes weren't interrupted due to poor supply (they were interrupted because of health reasons), and people quickly regained confidence in the business systems of national economies. All this happened due to efficient logistics systems, as a bloodstream of supply of almost all types of products. Following a first impact of the coronavirus pandemic and also the awareness that we can manage it, at least in the logistical sense, the key retailers, even in their advertising messages, rightly thanked their sales and logistics staff, as pillars from the organization in a retail company.

The 'corona wind' first seriously disrupted logistics (especially transport), but logistics quickly 'came to its senses', as they say, and ultimately, beat the coronavirus while emerging even stronger from this 'fight', unlike any other business activities. Of course, large and powerful countries were the first one to realize the importance of logistics. Within the first analyses, the Germans stated that “logistics is the third-most important economic branch” in that country and also the Americans wrote an in depth analysis called “What went down to the Great American Logistics Machine?” The construction of the largest logistics centre in Europe, spanning near to 550,000 square metres, is underway in France. The biggest companies in the world have started to make significant investments in logistics activities and individuals, in addition to reviewing the present pre-corona supply chains. For example, the world’s biggest online retail chain, Amazon, is investing huge amount of money in the largest new logistics start-up called Beacon, while employing a lot more individuals its logistics business to support its e-commerce activities (allow me to see who'll dare to assert that retail can perform without logistics). Zara will close small, unprofitable stores, open large brand new ones which are optimal from the aspect of profitability and will be in better locations, and transform parts of large stores into cross-docking centres (small , very agile warehouses) in the service of growing online sales (there are no online sales without efficient logistics).

This would have been an idyllic logistic essay if, as rule of the thumb, the items were not completely the alternative in Serbia. Namely, logistics has lost a battle in terms of changing/improving curricula in higher education in Serbia. Paradoxically, that happened throughout the corona business period, at the most important faculty in our country. Even though it was pointed out that it was difficult to get a school of the economic/ managerial profile in the so-called Shanghai List of the top 300 universities that does not have a logistics and/or supply chain-related major (at any degree of study), that during the coronavirus pandemic the significance of logistics was growing everywhere, that employers have a real need for the logistics know-how, which students love studying it, everything was in vain. Serbian arrogance, jealousy, envy and ignorance prevailed, which motivated everyone to reject the special module 'Logistics Management' at Master's studies, while additionally, the topic of logistics was marginalized in undergraduate marketing and retail management studies, the biggest paradox of all of them (the owner of Amazon, Jeff Bezos, could possibly roll his eyes if he heard this). But there is nothing over until it's over! Experience implies that logisticians are a tough crowd.

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