Logistics is the part of supply chain management that deals with the efficient forward and reverse flow of goods, services, and related information from the point of origin to the point of consumption according to the needs of customers, and a logistician is a professional working in the field of logistics management. Logistics management is a component that holds the supply chain together. The resources managed in logistics include physical goods such as materials, equipment, and foodstuffs, and also intangible items such as time and information.
Military logistics is concerned with maintaining army supply lines with food, armaments, ammunition, and spare parts, apart from the transportation of troops themselves. Civil logistics deals with acquiring, moving, and storing raw materials, semi-finished goods, and finished goods. For organisations that provide garbage collection, mail deliveries, public utilities, and after-sales services, logistical problems must be addressed.
Logistics deals with the movement of materials or products from one facility to another; it does not include material flow within production or assembly plants, such as production planning or single-machine scheduling.
Logistics accounts for a significant amount of the operational costs of an organisation or country. Dedicated simulation software can model, analyse, visualise, and optimize logistic complexities. Minimizing resource use is a common motivation in all logistics fields.
Nomenclature
The term is attested in English from 1846. It is from the French logistique, which was either coined or popularized by a Swiss military officer and writer, Antoine-Henri Jomini, 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 (cognate to English ), in the terms and :
The term and its etymology were criticized in 1832 by :
Chambray also notes that the term was present in the Dictionnaire de l'Académie française as a synonym for algebra. The is a homonym of the existing mathematical term, from , a traditional division of Greek mathematics; the mathematical term is presumably the origin of the term logistic in logistic growth and related terms. Some sources give this instead as the source of logistics, either ignorant of Jomini's statement that it was derived from , 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 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 on-line defines it as "the detailed organization and implementation of a complex operation".. Retrieved 21 February 2012. 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),Material Handling & Logistics News http://mhlnews.com/global-supply-chain/council-logistics-management-become-council-supply-chain-management-professional 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.
Academics and practitioners traditionally refer to the terms operations or production 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 the point of origin to the point of production.V. Misra, M.I. Kahn, U.K. Singh, Supply Chain Management Systems: Architecture, Design and Vision, North American Business Press 2010 http://www.na-businesspress.com/jsis/misraweb.pdf
Logistics activities
Logistical activities can be divided into three main areas: order processing, inventory management, and freight transportation. Modern freight transportation relies heavily on fleet management to improve efficiency and safety. Traditionally, order processing was a time-consuming activity, but with new technologies such as bar code scanning and computers, the availability of stocks can be checked in real time. The purpose of having an inventory is to reduce the overall logistical cost while improving service to customers. Having a stockpile of finished goods beforehand can reduce the frequency of transportation and cope with the randomness of customer demands. However, maintaining an inventory requires capital investment and maintaining a warehouse. Freight transportation is a central part of logistics and allows access to broad markets. Transportation policies and warehouse management are closely intertwined.
The rise of e-commerce has led to the development of "e-logistics". Compared to traditional logistics, e-logistics handles parcels valued at less than a hundred US dollars and delivers them to customers scattered across various destinations worldwide. In e-logistics, customer demand tends to come in waves, unlike in traditional logistics, where demand is more consistent.
Inbound logistics is one of the primary logistics processes, focusing on the procurement and coordination of 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 finished products. 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, which consists of market research, requirements planning, make-or-buy decisions, supplier management, ordering, and order control. The targets in procurement logistics might be contradictory: maximizing efficiency by concentrating on core competencies, outsourcing while maintaining the company's autonomy, or minimizing procurement costs while maximizing security within the supply process. Advance logistics involves the activities required to set up or establish a supply base in advance of other resources arriving. The term is used, for example, in military logistics for the assembly of resources ahead of troop arrival or the delivery of infrastructure components.See the articles on the USS O'Brien (DD-725) and USS Victoria (AO-46) during World War II Global logistics is technically the process of managing the "flow" of goods through a supply chain from its place of production to other parts of the world. This often requires an intermodal transport system via ocean, air, rail, and truck. The effectiveness of global logistics is measured in the Logistics Performance Index. Distribution logistics has, as its main task, the delivery of the finished products to the customer. It consists of order processing, warehousing, and transportation. Modern distribution often includes the use of a vehicle tracking system to monitor shipments by collecting real-time vehicle location data. Distribution logistics is necessary because production time, place, and quantity differ with the time, place, and quantity of consumption. Disposal logistics has the function of reducing logistics cost(s) and enhancing service(s) related to the disposal of waste produced during a business's operation. Reverse logistics denotes all 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. 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 to recapture 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, including all activities of the forward and reverse flows. This can be supported by fleet digitalization initiatives aimed at optimizing routes and reducing fuel consumption. RAM logistics (see also Logistic engineering) combines both business logistics and military logistics since it concerns highly complicated technological systems for which reliability, availability and maintainability are essential, e.g., weapon system and military supercomputers. Asset control logistics: companies in the retail channels, both organized retailers and suppliers, often deploy assets required for the display, preservation, and promotion of their products. This can involve using a tracking system to monitor the location and status of these assets. Humanitarian logistics or emergency logistics: these terms are used by the logistics, supply chain, and manufacturing industries to denote specific time-critical modes of transport used to move goods 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, donors, non-governmental organizations, and emergency logistics services are typically sourced from a specialist provider.L. Torre, I.S. Dolinskaya, K.R. Smilowitz, Disaster relief routing: Integrating research and practice Socio-Economic Planning Sciences vol46, March 2012