Logistics is the process to meet the needs of consumers of raw materials, in-process inventory, the final product and related information from the origin to the point of consumption in the effective flow and storage of planning, implementation and control. It forms the foundation of enterprise's value chain, is the key of enterprise competitive advantage. Many production enterprises to strengthen technology development and promote the comprehensive quality management at the same time, have to seek the cost advantage and value advantage eyes turned to production and logistics field.

1 modern logistics is the third profit source production and circulation enterprises
In twentieth Century 60-70, the enterprises of the developed countries are the focus of competition in pursuit of profit in the production field, make every attempt to reduce material consumption of resources to obtain "the first profit source" of enterprises, make every attempt to improve labor productivity gain "the second profit source of enterprises". However, this "two profit source "production field, it is restricted by the development level of science and technology, in the production of mechanization, constantly improve the degree of automation and production process is programmed, standardized situation under, enhanced technology convergence of the two "source of profit" no "spring" to dig.

Enter 80 age, in the face of fierce global market competition challenges, people began to seek profit focus from production areas to non production areas, surprised to find that create the value of logistics cost is high, the process of enterprise production and management of waste is still very prominent. Coupled with the micro electronics technology, information technology and system innovation and other factors, since 80, as "the third profit source of enterprises" logistics, has become a new focus of competition in the market, attention by the circles of theory and practice.

Logistics because it run through the whole process of production and circulation, so reasonable, efficient logistics can bring huge profits through hand improve coordination of enterprises throughout the production and circulation structure.
The original understanding of the third profit source based on the theory of the two conditions:

First, the logistics can be completely separated from the circulation process. Logistics as a standalone system, target and management itself, the general accounting and independent of the;

Second, logistics and other business activities as independent factors, it is not the total cost, but alone.

Factors profit, logistics can become "independent system profit center" type.
Logistics is the third profit source to two capacity based on:
First, the logistics in the enterprise strategy, which have the important influence to the enterprise marketing cost, logistics enterprise.

The important point of the industry cost. Therefore, a series of activities through logistics rationalization, modernization and reduce the cost, support marketing and purchasing activities. Therefore, logistics is not only to produce major cost, also refers to reduce the cost of concern, the logistics is "the treasure house to reduce costs" such as that it is this understanding image representation. Cost and profit are related, as the main logistics can provide a large number of direct and indirect profit for the enterprise, is the main activities of the formation of business profits.
Second, the role of logistics activity maximum, and not only in the enterprise, reduce the consumption of reducing cost or increasing.

Plus a profit, but more importantly to improve the business to customer service level, and improve the competitive ability of the enterprise. Through the logistics service guarantee, enterprises with their overall ability to reduce costs, increase profits.
Logistics is the third profit source, has become many enterprises especially the Multi-National Corporation's powerful weapon.

2 modern logistics is an important source of competitive advantage
In recent years, enterprise business philosophy from the "production oriented" to "customer orientation", quickly turned to "create value for customers". In the "create value for customers" era, value means that not only are tangible money, also means that perception can be invisible, interests, this is the new rules for the current enterprises to participate in market competition.

Management Master Michael Porter in the "competitive advantage" a book that, success can only be achieved through competitive cost advantage and value advantage. No value advantage a no cost advantage and enterprises can only belong to the future enterprise, is bound to decline. However, companies only do the lowest cost, it is just a cost leader, will have to launch with opponent single competition in price, the lower the price competition will intensify the customer to the product is only a commodity understanding. A value of competitive strategy based on the price competition strategy than simply much better, because the material value is important, and make the customers to get the overall value of product identity, are value for money, and money is more important, even if the price slightly higher, the customer will accept.

The model can provide a cost advantage, management advantage and to provide value is little, and the logistics management is one of the few in the management field. Efficient logistics management, reasonable, not only can reduce the operating costs of enterprises, but also can provide the high quality service for the customer; can enable enterprises to obtain the cost advantage, can make enterprises obtain the value advantage. Therefore, logistics management has been attached importance to the enterprise, be incorporated into the scope of enterprise strategic management, and even become the corner stone of enterprise development strategy.
An excellent logistics capacity of enterprises, can provide quality service to customers to gain competitive advantage; a logistics management of skilled business, average water if the stock availability, delivery timeliness and consistency of delivery in the same industry-leading level, can become an attractive supplier and business partners. Have the whole world in view of 500strong companies, they have the ability to world class logistics management, by providing quality service to customers to gain competitive advantage. Can say, logistics management has become a business one of the challenge. The development of logistics, strengthening logistics management not only can make the enterprise gain "the third profit source", but also an important source of competitive advantage. For example, China's Haier group put the logistics capability as the core competence of enterprise competitive advantage, promote the reorganization established professional engaged in logistics reform in this part, the procurement of raw materials, production support, material distribution from the strategy integration. The companies hope that by logistics reorganization, realize "to provide maximum value added service "management objectives to customers at the lowest total cost of logistics. In order to answer the grim challenge of joining the WTO, Chinese enterprises must be as a logistics management to reduce operating cost and the main means to improve customer service level, the logistics capability as the core competitiveness of enterprises.