Logistics is the
management of the flow of
resources between the point of origin and the point of consumption
in order to meet some requirements, for example, of customers or
corporations. The resources managed in logistics can include physical
items, such as food, materials, equipment, liquids, and staff, as well
as abstract items, such as time, information, particles, and energy. The
logistics of physical items usually involves the integration of
information flow,
material handling,
production,
packaging,
inventory,
transportation,
warehousing, and often
security. The complexity of logistics can be modeled, analyzed,
visualized, and optimized by dedicated simulation software. The
minimization of the use of resources is a common motivation.
Origins and
definition
The term logistics comes from the late 19th century: from
French logistique, from loger 'to lodge'.[1]
Logistics is considered to have originated in the military's need to
supply itself with arms, ammunition, and rations as it moved from a base
to a forward position. In the ancient
Greek,
Roman, and
Byzantine Empires, military officers with the title Logistikas
were responsible for financial and supply distribution matters.[citation
needed]
The
Oxford English Dictionary defines logistics as "the branch of
military science relating to procuring, maintaining and transporting
material, personnel and facilities." However, the
New Oxford American Dictionary defines logistics as "the
detailed coordination of a complex operation involving many people,
facilities, or supplies", and the Oxford Dictionary online defines it as
"the detailed organization and implementation of a complex operation".[2]
Another dictionary definition is "the time-related positioning of
resources." As such, logistics is commonly seen as a branch of
engineering that creates "people systems" rather than "machine
systems".
According to the Council of Logistics Management, logistics includes
the integrated planning, control, realization, and monitoring of all
internal and network-wide material, part, and product flow, including
the necessary information flow, in industrial and trading companies
along the complete value-added chain (and product life cycle) for the
purpose of conforming to customer requirements.
Logistics is the process of planning, implementing, and controlling
the effective and efficient flow of goods and services from the point of
origin to the point of consumption
Logistics
viewpoints
In bounding logistics is one of the primary processes of logistics,
concentrating on purchasing and arranging the inbound movement of
materials, parts, and/or finished inventory from suppliers to
manufacturing or assembly plants, warehouses, or retail stores.
Outbound logistics is the process related to the storage and movement
of the final product and the related information flows from the end of
the production line to the end user.
Logistics fields
Given the services performed by logisticians, the main fields of
logistics can be broken down as follows:
- Procurement logistics
- Production logistics
- Distribution logistics
- After sales logistics
- Disposal logistics
- Reverse logistics
- Green logistics
- Global logistics
- Domestics logistics
Procurement logistics consists of activities such as
market research, requirements planning, make-or-buy decisions,
supplier management, ordering, and order controlling. The targets in
procurement logistics might be contradictory: maximizing efficiency by
concentrating on core competences, outsourcing while maintaining the
autonomy of the company, or minimizing procurement costs while
maximizing security within the supply process.
Production logistics connects procurement to distribution
logistics. Its main function is to use available production capacities
to produce the products needed in distribution logistics. Production
logistics activities are related to organizational concepts, layout
planning, production planning, and control.
Distribution logistics has, as main tasks, the delivery of the
finished products to the customer. It consists of order processing,
warehousing, and transportation. Distribution logistics is necessary
because the time, place, and quantity of production differs with the
time, place, and quantity of consumption.
Disposal logistics has as its main function to reduce
logistics cost(s) and enhance service(s) related to the disposal of
waste produced during the operation of a business.
Reverse logistics denotes all those operations related to the
reuse of products and materials. The reverse logistics process includes
the management and the sale of surpluses, as well as products being
returned to vendors from buyers.
Green Logistics describes all attempts to measure and minimize
the ecological impact of logistics activities. This includes all
activities of the forward and reverse flows.
Military logistics
In military science, maintaining one's supply lines while disrupting
those of the enemy is a crucial—some would say the most crucial—element
of
military strategy, since an armed force without resources and
transportation is defenseless. The defeat of the British in the
American War of Independence and the defeat of the Axis in the
African theatre of
World War II are attributed to logistical failures.[citation
needed] The historical leaders
Hannibal Barca,
Alexander the Great, and the
Duke of Wellington are considered to have been logistical geniuses.
Militaries have a significant need for logistics solutions and so
have developed advanced implementations.
Integrated Logistics Support (ILS) is a discipline used in military
industries to ensure an easily supportable system with a robust customer
service (logistic) concept at the lowest cost and in line with (often
high) reliability, availability, maintainability, and other
requirements, as defined for the project.
In
military logistics,
logistics officers
manage how and when to move resources to the places they are needed.
Supply chain management in military logistics often deals with a
number of variables in predicting cost, deterioration,
consumption, and future demand. The
United States Armed Forces' categorical
supply classification was developed in such a way that categories of
supply with similar consumption variables are grouped together for
planning purposes. For instance, peacetime consumption of ammunition and
fuel will be considerably lower than wartime consumption of these items,
whereas other classes of supply such as subsistence and clothing have a
relatively consistent consumption rate regardless of war or peace.
Some classes of supply have a linear demand relationship: as more
troops are added, more supply items are needed; or as more equipment is
used, more fuel and ammunition are consumed. Other classes of supply
must consider a third variable besides usage and quantity: time. As
equipment ages, more and more
repair parts are needed over time, even when usage and quantity
stays consistent. By recording and analyzing these trends over time and
applying them to future scenarios, the US Armed Forces can accurately
supply troops with the items necessary at the precise moment they are
needed.[3]
History has shown that good logistical planning creates a lean and
efficient fighting force. The lack thereof can lead to a clunky, slow,
and ill-equipped force with too much or too little supply.
Business logistics
A forklift stacking a logistics provider's warehouse of
goods on pallets.
One definition of business logistics speaks of "having the right item
in the right quantity at the right time at the right place for the right
price in the right condition to the right customer".[4]
As the science of process[citation
needed], business logistics incorporates all
industry sectors. Logistics work aims to manage the fruition of
project life cycles,
supply chains, and resultant efficiencies.
Logistics as a
business concept evolved in the 1950s[citation
needed] due to the increasing complexity of
supplying businesses with materials and shipping out products in an
increasingly globalized supply chain, leading to a call for experts
called "supply chain logisticians".
In business, logistics may have either an internal focus (inbound
logistics) or an external focus (outbound logistics), covering the flow
and storage of materials from point of origin to point of consumption
(see
supply-chain management). The main functions of a qualified
logistician include
inventory management,
purchasing,
transportation,
warehousing, consultation, and the organizing and
planning of these activities. Logisticians combine a professional
knowledge of each of these functions to coordinate resources in an
organization.
There are two fundamentally different forms of logistics: one
optimizes a steady flow of material through a network of
transport links and storage nodes, while the other coordinates a
sequence of resources to carry out some
project.
Production
logistics
The term production logistics describes logistic processes
within an
industry. Production logistics aims to ensure that each machine and
workstation receives the right product in the right quantity and quality
at the right time. The concern is not the transportation itself, but to
streamline and control the flow through value-adding processes and to
eliminate non–value-adding processes. Production logistics can operate
in existing as well as new plants. Manufacturing in an existing plant is
a constantly changing process.[citation
needed] Machines are exchanged and new ones added,
which gives the opportunity to improve the production logistics system
accordingly. Production logistics provides the means to achieve customer
response and capital efficiency.
Production logistics becomes more important with decreasing batch
sizes. In many industries (e.g.,
mobile phones), the short-term goal is a batch size of one, allowing
even a single customer's demand to be fulfilled efficiently.
Track and tracing, which is an essential part of production
logistics due to product safety and reliability issues, is also gaining
importance, especially in the
automotive and
medical industries.
Logistics
management
Logistics is that part of the
supply chain that plans, implements, and controls the efficient,
effective forward and reverse flow and storage of goods, services, and
related information between the point of origin and the point of
consumption in order to meet customer and legal requirements.[citation
needed] A professional working in the field of
logistics management is called a logistician.
- Materials management
- Channel management
- Distribution (or physical distribution)
- Supply-chain management
The
Chartered Institute of Logistics and Transport (CILT), established
in the
United Kingdom in 1919, received a
Royal Charter in 1926. The Chartered Institute is one of the
professional bodies or institutions for the logistics and transport
sectors that offers
professional qualifications or degrees in logistics management.
Warehouse management systems and warehouse control systems
Although there is some overlap in functionality, warehouse management
systems (WMS) can differ significantly from warehouse control systems
(WCS). Simply put, a WMS plans a weekly activity forecast based on such
factors as statistics and trends, whereas a WCS acts like a floor
supervisor, working in real time to get the job done by the most
effective means. For instance, a WMS can tell the system that it is
going to need five of
stock-keeping unit (SKU) A and five of SKU B hours in advance, but
by the time it acts, other considerations may have come into play or
there could be a logjam on a conveyor. A WCS can prevent that problem by
working in real time and adapting to the situation by making a
last-minute decision based on current activity and operational status.
Working
synergistically, WMS and WCS can resolve these issues and maximize
efficiency for companies that rely on the effective operation of
their warehouse or distribution center.[5]
Logistics
automation
Logistics automation is the application of
computer software and/or
automated machinery to improve the efficiency of logistics
operations. Typically this refers to operations within a warehouse or
distribution center, with broader tasks undertaken by
supply chain management systems and
enterprise resource planning systems.
Logistics
outsourcing
Logistics outsourcing involves a relationship between a company and
an LSP (logistic service provider), which, compared with basic logistics
services, has more customized offerings, encompasses a broad number of
service activities, is characterized by a long-term orientation, and
thus has a strategic nature.[6]
Third-party
logistics
Third-party logistics (3PL) involves using external organizations to
execute logistics activities that have traditionally been performed
within an organization itself.[7]
According to this definition, third-party logistics includes any form of
outsourcing of logistics activities previously performed in house. For
example, if a company with its own warehousing facilities decides to
employ external transportation, this would be an example of third-party
logistics. Logistics is an emerging business area in many countries.
Fourth-party
logistics
The concept of a fourth-party logistics (4PL) provider was first
defined by Andersen Consulting (now Accenture) as an integrator that
assembles the resources, capabilities, and technology of its own
organization and other organizations to design, build, and run
comprehensive supply chain solutions. Whereas a third-party logistics
(3PL) service provider targets a single function, a 4PL targets
management of the entire process. Some have described a 4PL as a general
contractor that manages other 3PLs, truckers, forwarders, custom house
agents, and others, essentially taking responsibility of a complete
process for the customer.
Emergency
logistics
Emergency logistics is a term used by the logistics, supply chain,
and manufacturing industries to denote specific time-critical modes of
transport used to move goods or objects rapidly in the event of an
emergency.[citation
needed] The reason for enlisting emergency
logistics services could be a production delay or anticipated production
delay, or an urgent need for specialized equipment to prevent events
such as aircraft being grounded (also known as "aircraft on
ground"—AOG), ships being delayed, or telecommunications failure.
Emergency logistics services are typically sourced from a specialist
provider.[citation
needed]
As a profession
A logistician is a
professional logistics practitioner. Professional logisticians are
often certified by professional associations. One can either work in a
pure logistics company, such as a
shipping line,
airport,
or
freight forwarder, or within the logistics department of a company.
However, as mentioned above, logistics is a broad field, encompassing
procurement, production, distribution, and disposal activities. Hence,
career perspectives are broad as well. A new trend in the industry are
the 4PL, or fourth-party logistics, firms, consulting companies offering
logistics services.
Some
universities and academic
institutions train students as logisticians, offering
undergraduate and
postgraduate programs.
Logistics museums
There are many museums in the world which cover various aspects of
practical logistics. These include museums of transportation, customs,
packing, and industry-based logistics. However, only the following
museums are fully dedicated to logistics:
General logistics:
- Museum of Logistics (Tokyo, Japan)
- Logistics Museum (Saint Petersburg, Russia)
Military logistics:
- The Royal Logistics Corps Museum (Surrey, Great Britain)
- The Canadian Forces Logistics Museum (Montreal, Canada)
See also
References
-
^
http://oxforddictionaries.com/definition/english/logistics
-
^
http://oxforddictionaries.com/definition/logistics?q=logistics
accessed 2012-02-21 19:05:32
-
^
Joint Logistics Analysis Tool
-
^
Susan Mallik (2010). Hossein Bidgoil, ed. The Handbook of
Technology Management: Supply Chain Management, Marketing and
Advertising, and Global Management, vol 2 (1 ed.). Hoboken,
New Jersey: John Wiley @ Sons, Inc. p. 104.
ISBN 978-0-470-24948-2.
-
^
John T. Phelan, Jr. P.E.
"Guest Column: Knowing When a WMS or WCS Is Right for Your
Company".
Supply & Demand Chain Executive. Enom, Inc.
Retrieved 15 September 2009.
-
^
Wallenburg, C., Cahill, D., Michael
Knemeyer, A., and Goldsby, T. (2011): Commitment and Trust as
Drivers of Loyalty in Logistics Outsourcing Relationships:
Cultural Differences Between the United States and Germany.
Journal of Business Logistics, Vol. 32, No. 1, pp.
83-98,
DOI 10.1111/j.2158-1592.2011.01008.x
-
^
Baziotopoulos (2008). An
Investigation of Logistics Outsourcing Practices In the Greek
Manufacturing Sector. PhD thesis- "".
http://www.unitylss.com.pk
http://www.unityex.com
Further reading
- Huston, James A. The Sinews of War: Army Logistics, 1775-1953
(1966), U.S. Army; 755pp
online