Concept of Logistics Management: A Holistic Approach to Business Performance Management

Abstract

Rapid and extensive changes in all business environment segments, especially those changes that have occurred in the last 20 yearswith IT development, require shifts in the management paradigms or changing approach to business performance management. Traditional models focused on optimizing business performance by optimizing its subsystems do not yield fruitful results in dynamic environments. Logistics optimization of business dynamics in line with evolving business environment imposes itself as means to create adequate models for continuous business performance management. Dynamic optimization of business performance is the set of processes managed by implementing effective logistics management strategies, involving information, material and financial flows in incoming and outgoing communications with the environment, aimed at integrating and dynamizing all business subsystems in line with market demand. Business flexibility and adaptability are the fundamental control variables of the concept of logistics management and are the prerequisite for continuous business performance management in today's turbulent environment. Logistics management models seek to integrate success potentials, or the control variables-indicators of efficiency and effectiveness inbusiness performance, enabling managers to create simulation-based anticipatory management strategies aimed at dynamic optimization of business performance faced with discontinuous change in the business environment.