Logistics

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Logistics is the management of the flow of resources between the point of origin and the point of destination 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 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 and time are common motives.

Logistics Specialist inventories supplies in a storeroom aboard the aircraft carrier USS George H.W. Bush

Contents

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|date=March 2011}

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.

Main logistics targets

Logistics is one of the main functions within a company. The main targets of logistics can be divided into performance-related and cost-related targets. A few examples are high due date reliability, short delivery times, low inventory level, and high utilization of capacity. When decisions are made, there is a trade-off between targets.

Logistics viewpoints

Inbound 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 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.

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, Freighnk Nieman, 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|own by many names, including:

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.

See also

References

  1. ^ http://oxforddictionaries.com/definition/english/logistics
  2. ^ http://oxforddictionaries.com/definition/logistics?q=logistics accessed 2012-02-21 19:05:32
  3. ^ Joint Logistics Analysis Tool
  4. ^ 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.
  5. ^ 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. http://www.sdcexec.com/web/online/FulfillmentLogistics-Trends/Guest-Column--Knowing-When-a-WMS-or-WCS-Is-Right-for-Your-Company/15$10982. Retrieved 15 September 2009.
  6. ^ 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
  7. ^ Baziotopoulos (2008). An Investigation of Logistics Outsourcing Practices In the Greek Manufacturing Sector. PhD thesis- "".

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