The Necessity of Added Value as Prerequisite of International Trade (4)

The following describe value adding activities that can occur inside a supply chain:

1. Production and assembly. Logistics services can enable the geographical separation of assembly and manufacturing Production can occur in one location, assembly at another. In many industries, assembly occurs close to markets, so that consolidation advantages can be achieved.
2. Repackaging. This function is operational more than transportational. Items may be separated into individual packages or combined into single packages at a facility along the supply chain. This may be done for a variety of reasons: in some markets, items will be sold individually, whereas in other markets the same item will be packaged independently but sold in bundles.
3. Refurbishing. Again, operational: product defects are often the result of failure of single components, hence the majority of components will be salvageable and reusable. Refurbishing allows the faulty component to be replaced, so that working components are not wasted and the refurbished product can be reinjected into the supply chain.
4. Returns. Reverse logistics describes the process of retrieving used or defective product, disposing of them in an environmentally friendly manner, and, if possible, recovering reusable parts for use in new products.
5. Pre-retailing. This activity and value by converting delivered products to retail condition. This might involve removal of transit packaging, labelling, groupie with other products, sorting, and placing product inside display cartons or cases.
6. E-fulfilment. This is the Internet sales version of order fulfilment. Online platforms showcase products and provide payment services to customers. Purchase data passes instantaneously to the warehouse or distribution centre where product is stored. Purchase data includes stock item codes and the address to which the items should be dispatched. In some systems, such as Amazon’s, the time between online payment processing and order fulfilment can be seconds. Dispatch will occur several times a day, the frequency varying according to the number of packages prepared for dispatch (package carriers typically collect only when the number of packages waiting reaches a predetermined economical minimum).