Logistics Management
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Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics manages the flow of goods between the point of origin and the point of consumption to meet the requirements of customers or corporations. The resources managed in logistics may include tangible goods such as materials, equipment, and supplies, as well as food and other consumable items. In military science, logistics is concerned with maintaining army supply lines while disrupting those of the enemy, since an armed force without resources and transportation is defenseless. Military logistics was already practiced in the
ancient world Ancient history is a time period from the beginning of writing and recorded human history to as far as late antiquity. The span of recorded history is roughly 5,000 years, beginning with the Sumerian cuneiform script. Ancient history cov ...
and as the modern military has a significant need for logistics solutions, advanced implementations have been developed. In military logistics, logistics officers manage how and when to move resources to the places they are needed. Logistics management is the part of supply chain management and supply chain engineering 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 point of consumption to meet customers' requirements. The complexity of logistics can be modeled, analyzed, visualized, and optimized by dedicated
simulation software Simulation software is based on the process of modeling a real phenomenon with a set of mathematical formulas. It is, essentially, a program that allows the user to observe an operation through simulation without actually performing that operation ...
. The minimization of the use of resources is a common motivation in all logistics fields. A professional working in the field of logistics management is called a logistician.


Nomenclature

The term ' is attested in English from 1846, and is from french: link=no, logistique, where it was either coined or popularized by Swiss military officer and writer
Antoine-Henri Jomini Antoine-Henri Jomini (; 6 March 177922 March 1869) was a Swiss military officer who served as a general in French and later in Russian service, and one of the most celebrated writers on the Napoleonic art of war. Jomini's ideas are a staple at m ...
, who defined it in his ''Summary of the Art of War'' (). The term appears in the 1830 edition, then titled ''Analytic Table'' (''Tableau Analytique''), and Jomini explains that it is derived from french: , lit=lodgings (cognate to English ), in the terms french: maréchal des logis, lit=marshall of lodgings and french: major-général des logis, lit=major-general of lodging: Formerly the officers of the general staff were named: marshall of lodgings, major-general of lodgings; from there came the term of logistics 'logistique'' which we employ to designate those who are in charge of the functioning of an army. The term is credited to Jomini, and the term and its etymology criticized by Georges de Chambray in 1832, writing: ''Logistic'': This word appears to me to be completely new, as I have not yet seen it anywhere in military literature. … he appears to derive it from the word ''lodgings'' 'logis'' a peculiar etymology … Chambray also notes that the term french: label=none, logistique was present in the ' as a synonym for
algebra Algebra () is one of the broad areas of mathematics. Roughly speaking, algebra is the study of mathematical symbols and the rules for manipulating these symbols in formulas; it is a unifying thread of almost all of mathematics. Elementary ...
. The french: logistique, label=French word is a
homonym In linguistics, homonyms are words which are homographs (words that share the same spelling, regardless of pronunciation), or homophones ( equivocal words, that share the same pronunciation, regardless of spelling), or both. Using this definiti ...
of the existing mathematical term, from grc, λογῐστῐκός, logistikós, a traditional division of Greek mathematics; the mathematical term is presumably the origin of the term ''logistic'' in
logistic growth A logistic function or logistic curve is a common S-shaped curve (sigmoid curve) with equation f(x) = \frac, where For values of x in the domain of real numbers from -\infty to +\infty, the S-curve shown on the right is obtained, with the ...
and related terms. Some sources give this instead as the source of ''logistics'', either ignorant of Jomini's statement that it was derived from french: label= none , logis, or dubious and instead believing it was in fact of Greek origin, or influenced by the existing term of Greek origin.


Definition

Jomini originally defined logistics as: The ''
Oxford English Dictionary The ''Oxford English Dictionary'' (''OED'') is the first and foundational historical dictionary of the English language, published by Oxford University Press (OUP). It traces the historical development of the English language, providing a co ...
'' defines logistics as "the branch of military science relating to procuring, maintaining and transporting material, personnel and facilities". However, the ''
New Oxford American Dictionary The ''New Oxford American Dictionary'' (''NOAD'') is a single-volume dictionary of American English compiled by American editors at the Oxford University Press. ''NOAD'' is based upon the ''New Oxford Dictionary of English'' (''NODE''), published ...
'' defines logistics as "the detailed coordination of a complex operation involving many people, facilities, or supplies", and the Oxford Dictionary on-line defines it as "the detailed organization and implementation of a complex operation". As such, logistics is commonly seen as a branch of engineering that creates "people systems" rather than "machine systems". According to the Council of Supply Chain Management Professionals (previously the Council of Logistics Management), logistics is the process of planning, implementing and controlling procedures for the efficient and effective transportation and storage of goods including services and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements and includes inbound, outbound, internal and external movements.CSCMP glossary Academics and practitioners traditionally refer to the terms operations or
production Production may refer to: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (goods and services) * Production as a stati ...
management when referring to physical transformations taking place in a single business location (factory, restaurant or even bank clerking) and reserve the term logistics for activities related to distribution, that is, moving products on the territory. Managing a distribution center is seen, therefore, as pertaining to the realm of logistics since, while in theory, the products made by a factory are ready for consumption they still need to be moved along the distribution network according to some logic, and the distribution center aggregates and processes orders coming from different areas of the territory. That being said, from a modeling perspective, there are similarities between operations management and logistics, and companies sometimes use hybrid professionals, with for example a "Director of Operations" or a "Logistics Officer" working on similar problems. Furthermore, the term " supply chain management" originally referred to, among other issues, having an integrated vision of both production and logistics from point of origin to point of production. All these terms may suffer from
semantic change Semantic change (also semantic shift, semantic progression, semantic development, or semantic drift) is a form of language change regarding the evolution of word usage—usually to the point that the modern meaning is radically different from ...
as a side effect of advertising.


Logistics activities and fields

Inbound logistics is one of the primary processes of logistics concentrating on purchasing and arranging the inbound movement of materials, parts, or unfinished 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. Given the services performed by logisticians, the main fields of logistics can be broken down as follows: * Procurement logistics * Distribution logistics * After-sales logistics * Disposal logistics *
Reverse logistics Reverse logistics encompasses all operations related to the upstream movement of products and materials. It is "the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Remanufacturin ...
*
Green logistics 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 of products, information and services between the point of origin and the ...
* Global logistics * Domestics logistics * Concierge service *
Reliability, availability, and maintainability Reliability, availability and serviceability (RAS), also known as reliability, availability, and maintainability (RAM), is a computer hardware engineering term involving reliability engineering, high availability, and serviceability design. The ph ...
* Asset control logistics * Point-of-sale material logistics * Emergency logistics * Production logistics * Construction logistics * Capital project logistics * Digital logistics * Humanitarian logistics Procurement logistics consists of activities such as
market research Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness. Mar ...
, 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. Advance Logistics consists of the activities required to set up or establish a plan for logistics activities to occur. Global Logistics is technically the process of managing the "flow" of goods through what is called a supply chain, from its place of production to other parts of the world. This often requires an intermodal transport system, transport via ocean, air, rail, and truck. The effectiveness of global logistics is measured in the
Logistics Performance Index The Logistics Performance Index (LPI) is an interactive benchmarking tool created by the World Bank to help countries identify the challenges and opportunities they face in their performance on trade logistics and what they can do to improve thei ...
. 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 differ 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. Reverse logistics stands for all operations related to the reuse of products and materials. It is "the process of planning, implementing, and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. More precisely, reverse logistics is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. The opposite of reverse logistics is forward logistics." 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. This can be achieved through
intermodal freight transport Intermodal freight transport involves the transportation of freight in an intermodal container or vehicle, using multiple modes of transportation (e.g., rail, ship, aircraft, and truck), without any handling of the freight itself when changing ...
, path optimization, vehicle saturation and
city logistics Urban freight distribution is the system and process by which goods are collected, transported, and distributed within urban environments. The urban freight system can include seaports, airpo rts, manufacturing facilities, and warehouse/distribu ...
. RAM Logistics (see also
Logistic engineering Logistics engineering is a field of engineering dedicated to the scientific organization of the purchase, transport, storage, distribution, and warehousing of materials and finished goods. Logistics engineering is a complex science that conside ...
) combines both business logistics and military logistics since it is concerned with highly complicated technological systems for which
Reliability Reliability, reliable, or unreliable may refer to: Science, technology, and mathematics Computing * Data reliability (disambiguation), a property of some disk arrays in computer storage * High availability * Reliability (computer networking), a ...
,
Availability In reliability engineering, the term availability has the following meanings: * The degree to which a system, subsystem or equipment is in a specified operable and committable state at the start of a mission, when the mission is called for at ...
and
Maintainability In engineering, maintainability is the ease with which a product can be maintained to: * correct defects or their cause, * Repair or replace faulty or worn-out components without having to replace still working parts, * prevent unexpected working ...
are essential, ex: weapon systems and military supercomputers. Asset Control Logistics: companies in the retail channels, both organized retailers and suppliers, often deploy assets required for the display, preservation, promotion of their products. Some examples are refrigerators, stands, display monitors, seasonal equipment, poster stands & frames. Emergency logistics (or Humanitarian 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 rapidly in the event of an emergency.Cozzolino Alessandra, Humanitarian Logistics and Supply Chain Management, In Humanitarian Logistics, Springer Berlin Heidelberg 2012 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. Humanitarian logistics involves governments, the military,
aid agencies An aid agency, also known as development charity, is an organization dedicated to distributing aid. Many professional aid organisations exist, both within government, between governments as multilateral donors and as private voluntary organizatio ...
, donors, non-governmental organizations and emergency logistics services are typically sourced from a specialist provider. The term production logistics describes logistic processes within a value-adding system (ex: factory or a mine). 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 with production, testing, transportation, storage, and supply. Production logistics can operate in existing as well as new plants: since manufacturing in an existing plant is a constantly changing process, 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 Medicine is the science and practice of caring for a patient, managing the diagnosis, prognosis, prevention, treatment, palliation of their injury or disease, and promoting their health. Medicine encompasses a variety of health care practic ...
industries. Construction Logistics has been employed by civilizations for thousands of years. As the various human civilizations tried to build the best possible works of construction for living and protection. Now construction logistics has emerged as a vital part of construction. In the past few years, construction logistics has emerged as a different field of knowledge and study within the subject of supply chain management and logistics.


Concept of Seven R's

..is a popular concept used to enforce best practices in Logistics Management which consists of following: * Right Product (including the right information about it) * (At) Right Quantity * Right Time * Right Condition * Right Place * (to) The Right Customer * (with the) Right (financial) Resources


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 historical leaders Hannibal,
Alexander the Great Alexander III of Macedon ( grc, Ἀλέξανδρος, Alexandros; 20/21 July 356 BC – 10/11 June 323 BC), commonly known as Alexander the Great, was a king of the ancient Greek kingdom of Macedon. He succeeded his father Philip II to ...
, and the
Duke of Wellington Arthur Wellesley, 1st Duke of Wellington, (1 May 1769 – 14 September 1852) was an Anglo-Irish people, Anglo-Irish soldier and Tories (British political party), Tory statesman who was one of the leading military and political figures of Uni ...
are considered to have been logistical geniuses: Alexander's expedition benefited considerably from his meticulous attention to the provisioning of his army, Hannibal is credited to have "taught logistics" to the
Romans Roman or Romans most often refers to: *Rome, the capital city of Italy * Ancient Rome, Roman civilization from 8th century BC to 5th century AD *Roman people, the people of ancient Rome *''Epistle to the Romans'', shortened to ''Romans'', a lette ...
during the Punic Wars and the success of the Anglo-Portuguese army in the
Peninsula War The Peninsular War (1807–1814) was the military conflict fought in the Iberian Peninsula by Spain, Portugal, and the United Kingdom against the invading and occupying forces of the First French Empire during the Napoleonic Wars. In Spain, ...
was due to the effectiveness of Wellington's supply system, despite the numerical disadvantage. The defeat of the British in the American War of Independence and the defeat of the
Axis An axis (plural ''axes'') is an imaginary line around which an object rotates or is symmetrical. Axis may also refer to: Mathematics * Axis of rotation: see rotation around a fixed axis * Axis (mathematics), a designator for a Cartesian-coordinat ...
in the African theater of
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposing ...
are attributed by some scholars to logistical failures. 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 Consumption may refer to: *Resource consumption *Tuberculosis, an infectious disease, historically * Consumption (ecology), receipt of energy by consuming other organisms * Consumption (economics), the purchasing of newly produced goods for curren ...
, and future demand. The
United States Armed Forces The United States Armed Forces are the military forces of the United States. The armed forces consists of six service branches: the Army, Marine Corps, Navy, Air Force, Space Force, and Coast Guard. The president of the United States is ...
' 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 The technical meaning of maintenance involves functional checks, servicing, repairing or replacing of necessary devices, equipment, machinery, building infrastructure, and supporting utilities in industrial, business, and residential installa ...
are needed over time, even when usage and quantity stay consistent. By recording and analyzing these trends over time and applying them to future scenarios, the
US Armed Forces The United States Armed Forces are the military forces of the United States. The armed forces consists of six service branches: the Army, Marine Corps, Navy, Air Force, Space Force, and Coast Guard. The president of the United States is the ...
can accurately supply troops with the items necessary at the precise moment they are needed. 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

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". Business logistics incorporates all
industry sector Industry classification or industry taxonomy is a type of economic taxonomy that classifies companies, organizations and traders into industrial groupings based on similar production processes, similar products, or similar behavior in financial ...
s and aims to manage the fruition of
project life cycle Project management is the process of leading the work of a team to achieve all project goals within the given constraints. This information is usually described in project documentation, created at the beginning of the development process. Th ...
s, supply chains, and resultant efficiencies. The term "business logistics" has evolved since the 1960s 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 professionals 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 Field inventory management commonly known as inventory management is the function of understanding the stock mix of a company and the different demands on that stock. The demands are influenced by both external and internal factors and are balan ...
,
purchasing Purchasing is the process a business or organization uses to acquire goods or services to accomplish its goals. Although there are several organizations that attempt to set standards in the purchasing process, processes can vary greatly betwee ...
, transportation,
warehousing A warehouse is a building for storing goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial parks on the outskirts of cities, tow ...
, consultation, and the organizing and planning of these activities. Logisticians combine 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 In mathematics, a sequence is an enumerated collection of objects in which repetitions are allowed and order matters. Like a set, it contains members (also called ''elements'', or ''terms''). The number of elements (possibly infinite) is calle ...
of resources to carry out some project (e.g., restructuring a warehouse).


Nodes of a distribution network

The nodes of a distribution network include: * Factories where products are manufactured or assembled * A
depot Depot ( or ) may refer to: Places * Depot, Poland, a village * Depot Island, Kemp Land, Antarctica * Depot Island, Victoria Land, Antarctica * Depot Island Formation, Greenland Brands and enterprises * Maxwell Street Depot, a restaurant in ...
or deposit, a standard type of warehouse for storing merchandise (high level of inventory) * Distribution centers for order processing and
order fulfillment Order fulfillment (in British English: order fulfilment) is in the most general sense the complete process from point of sales inquiry to delivery of a product to the customer. Sometimes, it describes the more narrow act of distribution or the ...
(lower level of inventory) and also for receiving returning items from clients. Typically, distribution centers are way stations for products to be disbursed further down the supply chain. They usually do not ship inventory directly to customers, whereas fulfillment centers do. * Transit points for
cross docking Cross-docking is a practice in logistics of unloading materials from a manufacturer or mode of transportation directly to the customer or another mode of transportation, with little or no storage in between. This may be done to change the type of ...
activities, which consist of reassembling cargo units based on deliveries scheduled (only moving merchandise) * Traditional “
mom-and-pop Small businesses are types of corporations, partnerships, or sole proprietorships which have fewer employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as "small" in terms of being able to ap ...
” retail stores, modern supermarkets,
hypermarkets A hypermarket (sometimes called a hyperstore, supercentre or superstore) is a big-box store combining a supermarket and a department store. The result is an expansive retail facility carrying a wide range of products under one roof, including ...
,
discount store A discount store or discounter offers a retail format in which products are sold at prices that are in principle lower than an actual or supposed "full retail price". Discounters rely on bulk purchasing and efficient distribution to keep down cost ...
s or also voluntary chains,
consumers' co-operative A consumers' co-operative is an enterprise owned by consumers and managed democratically and that aims at fulfilling the needs and aspirations of its members. Such co-operatives operate within the market system, independently of the state, as a f ...
, groups of consumer with
collective buying power Collective buying power is the ability of a group of consumers to leverage the group size in exchange for discounts. In the marketplace Many different companies have used this concept to build business plans. Warehouse clubs function in a simi ...
. Note that subsidiaries will be mostly owned by another company and
franchisers Franchising is based on a marketing concept which can be adopted by an organization as a strategy for business expansion. Where implemented, a franchisor licenses some or all of its know-how, procedures, intellectual property, use of its busine ...
, although using other company brands, actually own the point of sale. There may be some
intermediaries An intermediary (or go-between) is a third party that offers intermediation services between two parties, which involves conveying messages between principals in a dispute, preventing direct contact and potential escalation of the issue. In la ...
operating for representative matters between nodes such as sales agents or brokers.


Logistic families and metrics

A logistic family is a set of products that share a common characteristic: weight and volumetric characteristics, physical storing needs (temperature, radiation,...), handling needs, order frequency, package size, etc. The following metrics may be used by the company to organize its products in different families: * Physical metrics used to evaluate inventory systems include stocking capacity, selectivity, superficial use, volumetric use, transport capacity, transport capacity use. * Monetary metrics used include space holding costs (building, shelving, and services) and handling costs (people, handling machinery, energy, and maintenance). Other metrics may present themselves in both physical or monetary form, such as the standard Inventory turnover.


Handling and order processing

Unit loads are combinations of individual items which are moved by handling systems, usually employing a pallet of normed dimensions. Handling systems include: trans-pallet handlers, counterweight handler, retractable mast handler, bilateral handlers, trilateral handlers, AGV and other handlers. Storage systems include: pile stocking, cell racks (either static or movable), cantilever racks and gravity racks.Lambert D., Stock J., Ellram L., Fundamentals of Logistics, McGraw-Hill 1998 Order processing is a sequential process involving: processing withdrawal list, picking (selective removal of items from loading units), sorting (assembling items based on the destination), package formation (weighting, labeling, and packing), order consolidation (gathering packages into loading units for transportation, control and
bill of lading A bill of lading () (sometimes abbreviated as B/L or BOL) is a document issued by a carrier (or their agent) to acknowledge receipt of cargo for shipment. Although the term historically related only to carriage by sea, a bill of lading may toda ...
).D.F. Bozutti, M.A. Bueno-Da-Costa, R. Ruggeri, Logística: Visão Global e Picking, EdUFSCar 2010 Picking can be both manual or automated. Manual picking can be both man to goods, i.e. operator using a cart or conveyor belt, or goods to man, i.e. the operator benefiting from the presence of a mini-load ASRS, vertical or
horizontal carousel An automated storage and retrieval system (ASRS or AS/RS) consists of a variety of computer-controlled systems for automatically placing and retrieving loads from defined storage locations. Automated storage and retrieval systems (AS/RS) are ty ...
or from an Automatic Vertical Storage System (AVSS). Automatic picking is done either with dispensers or depalletizing robots. Sorting can be done manually through carts or conveyor belts, or automatically through sorters.


Transportation

Cargo, i.e. merchandise being transported, can be moved through a variety of transportation means and is organized in different shipment categories. Unit loads are usually assembled into higher standardized units such as: ISO containers, swap bodies or
semi-trailers A semi-trailer is a trailer without a front axle. In the United States, the term is also used to refer to the combination of a truck and a semi-trailer; a tractor-trailer. A large proportion of a semi-trailer's weight is supported by a tracto ...
. Especially for very long distances, product transportation will likely benefit from using different transportation means:
multimodal transport Multimodal transport (also known as combined transport) is the transportation of goods under a single contract, but performed with at least two different modes of transport; the carrier is liable (in a legal sense) for the entire carriage, even th ...
,
intermodal transport Intermodal transport (or intermodal transportation) involves the use of more than one mode of transport for a journey. It may refer to: * Intermodal passenger transport * Intermodal freight transport See also * Intermodal transportation center ...
(no handling) and
combined transport Combined transport is a form of Intermodal freight transport, intermodal transport, which is the movement of goods in one and the same loading unit or road vehicle, using successively two or more modes of transport without handling the goods thems ...
(minimal road transport). When moving cargo, typical constraints are maximum weight and
volume Volume is a measure of occupied three-dimensional space. It is often quantified numerically using SI derived units (such as the cubic metre and litre) or by various imperial or US customary units (such as the gallon, quart, cubic inch). Th ...
. Operators involved in transportation include: all train, road vehicles, boats, airplanes companies, couriers, freight forwarders and multi-modal transport operators. Merchandise being transported internationally is usually subject to the
Incoterms The Incoterms or International Commercial Terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) relating to international commercial law. Incoterms define the responsiblities of exporters a ...
standards issued by the
International Chamber of Commerce The International Chamber of Commerce (ICC; French: ''Chambre de commerce internationale'') is the largest, most representative business organization in the world. Its over 45 million members in over 100 countries have interests spanning every sec ...
.


Configuration and management

Similarly to production systems, logistic systems need to be properly configured and managed. Actually a number of methodologies have been directly borrowed from operations management such as using
Economic Order Quantity Economic Order Quantity (EOQ), also known as Economic Buying Quantity (EPQ), is the order quantity that minimizes the total holding costs and ordering costs in inventory management. It is one of the oldest classical production scheduling models. ...
models for managing inventory in the nodes of the network.
Distribution resource planning {{Business logistics Distribution resource planning (DRP) is a method used in business administration for planning orders within a supply chain. DRP enables the user to set certain inventory control parameters (like a safety stock) and calculate ...
(DRP) is similar to MRP, except that it doesn't concern activities inside the nodes of the network but planning distribution when moving goods through the links of the network. Traditionally in logistics configuration may be at the level of the warehouse (
node In general, a node is a localized swelling (a "knot") or a point of intersection (a vertex). Node may refer to: In mathematics * Vertex (graph theory), a vertex in a mathematical graph *Vertex (geometry), a point where two or more curves, lines ...
) or at level of the distribution system ( network). Regarding a single warehouse, besides the issue of designing and building the warehouse, configuration means solving a number of interrelated technical-economic problems: dimensioning
rack Rack or racks may refer to: Storage and installation * Amp rack, short for amplifier rack, a piece of furniture in which amplifiers are mounted * Bicycle rack, a frame for storing bicycles when not in use * Bustle rack, a type of storage bi ...
cells, choosing a
palletizing A pallet (also called a skid) is a flat transport structure, which supports goods in a stable fashion while being lifted by a forklift, a pallet jack, a front loader, a jacking device, or an erect crane. A pallet is the structural foundat ...
method (manual or through
robots "\n\n\n\n\nThe robots exclusion standard, also known as the robots exclusion protocol or simply robots.txt, is a standard used by websites to indicate to visiting web crawlers and other web robots which portions of the site they are allowed to visi ...
), rack dimensioning and design, number of racks, number and typology of retrieval systems (e.g. stacker cranes). Some important constraints have to be satisfied: fork and load beams resistance to
bending In applied mechanics, bending (also known as flexure) characterizes the behavior of a slender structural element subjected to an external load applied perpendicularly to a longitudinal axis of the element. The structural element is assumed to ...
and proper placement of sprinklers. Although picking is more of a tactical planning decision than a configuration problem, it is important to take it into account when deciding the layout of the racks inside the warehouse and buying tools such as handlers and motorized carts since once those decisions are taken they will work as constraints when managing the warehouse, the same reasoning for sorting when designing the conveyor system or installing automatic dispensers. Configuration at the level of the distribution system concerns primarily the problem of
location In geography, location or place are used to denote a region (point, line, or area) on Earth's surface or elsewhere. The term ''location'' generally implies a higher degree of certainty than ''place'', the latter often indicating an entity with an ...
of the nodes in geographic space and distribution of capacity among the nodes. The first may be referred to as
facility location Facility location is a name given to several different problems in computer science and in game theory Game theory is the study of mathematical models of strategic interactions among rational agents. Myerson, Roger B. (1991). ''Game Theory: A ...
(with the special case of
site selection The award-winning ''Site Selection'' magazine, published by Conway Data, Inc., is the official publication of thIndustrial Asset Management Council(IAMC). The magazine delivers expansion planning information to over 44,000 readers including corpora ...
) while the latter to as capacity allocation. The problem of outsourcing typically arises at this level: the nodes of a supply chain are very rarely owned by a single enterprise. Distribution networks can be characterized by numbers of levels, namely the number of intermediary nodes between supplier and consumer: *
Direct store delivery Direct may refer to: Mathematics * Directed set, in order theory * Direct limit of (pre), sheaves * Direct sum of modules, a construction in abstract algebra which combines several vector spaces Computing * Direct access (disambiguation), a ...
, i.e. zero levels * One level network: central warehouse * Two level network: central and peripheral warehouses This distinction is more useful for modeling purposes, but it relates also to a tactical decision regarding safety stocks: considering a two-level network, if safety inventory is kept only in peripheral warehouses then it is called a dependent system (from suppliers), if safety inventory is distributed among central and peripheral warehouses it is called an independent system (from suppliers). Transportation from producer to the second level is called primary transportation, from the second level to a consumer is called secondary transportation. Although configuring a distribution network from zero is possible, logisticians usually have to deal with restructuring existing networks due to presence of an array of factors: changing demand, product or process innovation, opportunities for outsourcing, change of government policy toward
trade barriers Trade barriers are government-induced restrictions on international trade. According to the theory of comparative advantage, trade barriers are detrimental to the world economy and decrease overall economic efficiency. Most trade barriers work ...
, innovation in transportation means (both
vehicles A vehicle (from la, vehiculum) is a machine that transports people or cargo. Vehicles include wagons, bicycles, motor vehicles (motorcycles, cars, trucks, buses, mobility scooters for disabled people), railed vehicles (trains, trams), ...
or thoroughfares), the introduction of regulations (notably those regarding pollution) and availability of ICT supporting systems (e.g. ERP or
e-commerce E-commerce (electronic commerce) is the activity of electronically buying or selling of products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain managem ...
). Once a logistic system is configured, management, meaning tactical decisions, takes place, once again, at the level of the warehouse and of the distribution network. Decisions have to be made under a set of constraints: internal, such as using the available infrastructure, or external, such as complying with the given product
shelf life Shelf life is the length of time that a commodity may be stored without becoming unfit for use, consumption, or sale. In other words, it might refer to whether a commodity should no longer be on a pantry shelf (unfit for use), or no longer on a ...
s and expiration dates. At the warehouse level, the logistician must decide how to distribute merchandise over the racks. Three basic situations are traditionally considered: shared storage, dedicated storage (rack space reserved for specific merchandise) and class-based storage (class meaning merchandise organized in different areas according to their access index). Picking efficiency varies greatly depending on the situation. For a man to goods situation, a distinction is carried out between high-level picking (vertical component significant) and low-level picking (vertical component insignificant). A number of tactical decisions regarding picking must be made: * Routing path: standard alternatives include transversal routing, return routing, midpoint routing, and largest gap return routing * Replenishment method: standard alternatives include equal space supply for each product class and equal time supply for each product class. * Picking logic: order picking vs batch picking At the level of the distribution network, tactical decisions involve mainly
inventory control Inventory control or stock control can be broadly defined as "the activity of checking a shop's stock". It is the process of ensuring that the right amount of supply is available within a business. However, a more focused definition takes into acco ...
and delivery path optimization. Note that the logistician may be required to manage the reverse flow along with the forward flow.


Warehouse management system and control

Although there is some overlap in functionality, warehouse management systems (WMS) can differ significantly from
warehouse control system A warehouse control system (WCS) is a software application that directs the real-time activities within warehouses and distribution centers (DC). As the “traffic cop” for the warehouse/distribution center, the WCS is responsible for keeping ...
s (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 Synergy is an interaction or cooperation giving rise to a whole that is greater than the simple sum of its parts. The term ''synergy'' comes from the Attic Greek word συνεργία ' from ', , meaning "working together". History In Christia ...
, WMS and WCS can resolve these issues and maximize efficiency for companies that rely on the effective operation of their warehouse or distribution center.


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. Outsourcing does not have to be complete externalization to an LSP, but can also be partial: * A single contract for supplying a specific service on occasion * Creation of a spin-off * Creation of a joint venture Third-party logistics (3PL) involves using external organizations to execute logistics activities that have traditionally been performed within an organization itself. 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. External 3PL providers have evolved from merely providing logistics capabilities to becoming real orchestrators of supply chains that create and sustain a competitive advantage, thus bringing about new levels of logistics outsourcing. The concept of a fourth-party logistics (4PL) provider was first defined by Andersen Consulting (now Accenture) as an integrator that assembles the resources, planning 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.


Horizontal alliances between logistics service providers

Horizontal
business alliance A business alliance is an agreement between businesses, usually motivated by cost reduction and improved service for the customer. Alliances are often bounded by a single agreement with equitable risk and opportunity share for all parties involved ...
s often occur between logistics service providers, i.e., the cooperation between two or more logistics companies that are potentially competing. In a horizontal alliance, these partners can benefit twofold. On one hand, they can "access tangible resources which are directly exploitable". In this example extending common transportation networks, their warehouse infrastructure and the ability to provide more complex service packages can be achieved by combining resources. On the other hand, partners can "access intangible resources, which are not directly exploitable". This typically includes know-how and information and, in turn, innovation.


Logistics automation

Logistics automation Logistics automation is the application of computer software 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 ...
is the application of computer software or
automated Automation describes a wide range of technologies that reduce human intervention in processes, namely by predetermining decision criteria, subprocess relationships, and related actions, as well as embodying those predeterminations in machines ...
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 engineering systems and
enterprise resource planning Enterprise resource planning (ERP) is the integrated management of main business processes, often in real time and mediated by software and technology. ERP is usually referred to as a category of business management software—typically a sui ...
systems. Industrial machinery can typically identify products through either
barcode A barcode or bar code is a method of representing data in a visual, machine-readable form. Initially, barcodes represented data by varying the widths, spacings and sizes of parallel lines. These barcodes, now commonly referred to as linear or o ...
or RFID technologies. Information in traditional bar codes is stored as a sequence of black and white bars varying in width, which when read by laser is translated into a digital sequence, which according to fixed rules can be converted into a decimal number or other data. Sometimes information in a bar code can be transmitted through radio frequency, more typically radio transmission is used in RFID tags. An RFID tag is a card containing a memory chip and an antenna that transmits signals to a reader. RFID may be found on merchandise, animals, vehicles, and people as well.


Logistics: profession and organizations

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 A freight forwarder, or forwarding agent, is a person or company who, for a fee organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer or final point of distribution.
, 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 is 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. A university with a primary focus on logistics is Kühne Logistics University in Hamburg, Germany. It is non-profit and supported by Kühne-Foundation of the logistics entrepreneur
Klaus Michael Kühne Klaus is a German, Dutch and Scandinavian given name and surname. It originated as a short form of Nikolaus, a German form of the Greek given name Nicholas. Notable persons whose family name is Klaus *Billy Klaus (1928–2006), American base ...
. The Chartered Institute of Logistics and Transport (CILT), established in the United Kingdom in 1919, received a
Royal Charter A royal charter is a formal grant issued by a monarch under royal prerogative as letters patent. Historically, they have been used to promulgate public laws, the most famous example being the English Magna Carta (great charter) of 1215, but s ...
in 1926. The Chartered Institute is one of the professional bodies or institutions for the logistics and transport sectors that offer
professional qualification Professional certification, trade certification, or professional designation, often called simply ''certification'' or ''qualification'', is a designation earned by a person to assure qualification to perform a job or task. Not all certifications ...
s or degrees in logistics management. CILT programs can be studied at centers around the UK, some of which also offer distance learning options. The institute also have overseas branches namely The Chartered Institute of Logistics & Transport Australia (CILTA) in Australia and Chartered Institute of Logistics and Transport in Hong Kong (CILTHK) in Hong Kong. In the UK, Logistics Management programs are conducted by many universities and professional bodies such as CILT. These programs are generally offered at the postgraduate level. The
Global Institute of Logistics Global means of or referring to a globe and may also refer to: Entertainment * ''Global'' (Paul van Dyk album), 2003 * ''Global'' (Bunji Garlin album), 2007 * ''Global'' (Humanoid album), 1989 * ''Global'' (Todd Rundgren album), 2015 * Bruno ...
established in New York in 2003 is a
Think tank A think tank, or policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture. Most think tanks are non-governmenta ...
for the profession and is primarily concerned with intercontinental maritime logistics. It is particularly concerned with
container A container is any receptacle or enclosure for holding a product used in storage, packaging, and transportation, including shipping. Things kept inside of a container are protected on several sides by being inside of its structure. The term ...
logistics and the role of the seaport authority in the maritime logistics chain. The International Association of Public Health Logisticians (IAPHL) is a professional network that promotes the professional development of supply chain managers and others working in the field of public health logistics and commodity security, with particular focus on developing countries. The association supports logisticians worldwide by providing a community of practice, where members can network, exchange ideas, and improve their professional skills.


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'' * Logistics Museum (
Saint Petersburg Saint Petersburg ( rus, links=no, Санкт-Петербург, a=Ru-Sankt Peterburg Leningrad Petrograd Piter.ogg, r=Sankt-Peterburg, p=ˈsankt pʲɪtʲɪrˈburk), formerly known as Petrograd (1914–1924) and later Leningrad (1924–1991), i ...
, Russia) * Museum of Logistics (Tokyo, Japan) * Beijing Wuzi University Logistics Museum (Beijing, China) ''Military logistics'' *
Royal Logistic Corps Museum The Royal Logistic Corps Museum is based at Worthy Down near Winchester. It tells story of logistic support to the British Army from Agincourt to the modern day. The museum holds the collection of the Royal Logistic Corps RLC and the collecti ...
( Surrey, England, United Kingdom) * The Canadian Forces Logistics Museum (
Montreal Montreal ( ; officially Montréal, ) is the second-most populous city in Canada and most populous city in the Canadian province of Quebec. Founded in 1642 as '' Ville-Marie'', or "City of Mary", it is named after Mount Royal, the triple ...
, Quebec, Canada) * Logistics Museum (
Hanoi Hanoi or Ha Noi ( or ; vi, Hà Nội ) is the capital and second-largest city of Vietnam. It covers an area of . It consists of 12 urban districts, one district-leveled town and 17 rural districts. Located within the Red River Delta, Hanoi is ...
, Vietnam)


See also

*
Automated identification and data capture Automatic identification and data capture (AIDC) refers to the methods of automatically identifying objects, collecting data about them, and entering them directly into computer systems, without human involvement. Technologies typically considered ...
*
Document automation Document automation (also known as document assembly or document management) is the design of systems and workflows that assist in the creation of electronic documents. These include logic-based systems that use segments of pre-existing text and/or ...
in supply chain management and logistics * Field inventory management * Freight claim *
Freight forwarder A freight forwarder, or forwarding agent, is a person or company who, for a fee organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer or final point of distribution.
*
Incoterms The Incoterms or International Commercial Terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) relating to international commercial law. Incoterms define the responsiblities of exporters a ...
*
Containerization Containerization is a system of intermodal freight transport using intermodal containers (also called shipping containers and ISO containers). Containerization is also referred as "Container Stuffing" or "Container Loading", which is the p ...
* Integrated Service Provider *
Inventory management software Inventory management software is a software system for tracking inventory levels, orders, sales and deliveries. It can also be used in the manufacturing industry to create a work order, bill of materials and other production-related documents. Com ...
* Performance-based logistics * Physical inventory *
Sales territory A sales territory is the customer group or geographical area for which an individual salesperson or a sales team holds responsibility. Territories can be defined on the basis of geography, sales potential, history, or a combination of factors. Comp ...
*
Storage management system Hierarchical storage management (HSM), also known as Tiered storage, is a data storage and Data management technique that automatically moves data between high-cost and low-cost storage media. HSM systems exist because high-speed storage devices, s ...
* Blockchain *
Dutch flower bucket Dutch commonly refers to: * Something of, from, or related to the Netherlands * Dutch people () * Dutch language () Dutch may also refer to: Places * Dutch, West Virginia, a community in the United States * Pennsylvania Dutch Country People E ...
* Self-driving truck * Automated storage and retrieval system * Automated guided vehicle


References


Further reading

* Engels, Donald W. (1980). ''Alexander the Great and the Logistics of the Macedonian Army'', University of California Press (194 pages)
online
* Hess, Earl J. ''Civil War Logistics: A Study of Military Transportation'' (2017
online review
* Huston, James A. (1966). ''The Sinews of War: Army Logistics, 1775–1953'',
United States Army The United States Army (USA) is the land warfare, land military branch, service branch of the United States Armed Forces. It is one of the eight Uniformed services of the United States, U.S. uniformed services, and is designated as the Army o ...
(789 pages)
online
* Handfield, R.B., Straube, F., Pfohl, H.C. & Wieland, A., ''Trends and Strategies in Logistics and Supply Chain Management: Embracing Global Logistics Complexity to Drive Market Advantage'', BVL 2013 * Ronald H. Ballou, Samir K. Srivastava, ''Business Logistics: Supply Chain Management'', Pearson Education, 2007 * Donald Bowersox, David Closs, M. Bixby Cooper, ''Supply Chain Logistics Management'', McGraw-Hill 2012 * M. Christopher: ''Logistics & Supply Chain Management: creating value-adding networks'', Prentice Hall 2010
online
* J. V. Jones: ''Integrated Logistics Support Handbook'', McGraw-Hill Logistics Series 2006 * B. S. Blanchard: ''Logistics Engineering and Management'', Pearson Prentice Hall 2004 * R.G. Poluha: ''The Quintessence of Supply Chain Management: What You Really Need to Know to Manage Your Processes in Procurement, Manufacturing, Warehousing, and Logistics (Quintessence Series)''. First Edition. Springer Heidelberg New York Dordrecht London 2016. * Preclík Vratislav: Průmyslová logistika (Industrial logistics), 359 p., , First issue Nakladatelství ČVUT v Praze, 2006, pp. 7 – 50, 63 – 73, 75 – 85, 123 – 347, Prague 2006 {{Authority control Business terms Systems engineering