Logistics Concepts and Structure New Logistics Paradigm

1
Logistics Concepts and Structure New Logistics
Paradigm

• Te-Cheng Yu
• Dept. of Logistics Management,
• National Kaohsiung Marine University

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Outline

• Introduction
• Military logistics
• Engineering logistics
• Business logistics
• Event logistics
• Process logistics
• Service logistics
• Emergency logistics
• Value-added role of logistics

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Introduction

• A consideration of the various practices that,
  taken together, define general logistics (cf.
  emergency logistics) suggests that logistics is a
  branch of management science that is practiced in
  seven areas military logistics, engineering
  logistics, business logistics, event logistics,
  process logistics, service logistics, and
  emergency logistics.

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Military logistics

• . The design of supportability into weapon
  systems and other capital assets, assessment of
  technical requirements for training and
  maintenance, and integration of all aspects of
  support for the operational capability of
  military forces and their equipment. Examples of
  military logistics capabilities include airlift,
  sealift, operational readiness, and
  sustainability. In addition to protocols, there
  are logistics plans, provisioning, war reserve
  spare kits, containerization, supply support,
  maintenance plans, materiel and service
  contracts, and industrial mobilization, et al.

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Engineering logistics

• The reliability, maintainability, and
  configuration planning, provisioning and
  continuing supply support, repair level analysis,
  technical manuals development, training, data and
  records management, life-cycle cost management,
  and computation of post-sale support
  requirements,. In this sense of the word,
  engineering logistics is largely a modeling and
  quantitative discipline. Examples of engineering
  logistics capabilities include design for
  supportability, integrated logistics support,
  tradeoffs, and life-cycle cost management.

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Business logistics

• The planning and management of supply sources,
  inventories, transportation, distribution
  networks, and related activities and supporting
  information to meet customer requirements.
• Business logistics evolved into a dichotomy of
  inbound logistics (materials management or
  physical supply) to support production, where the
  plant is the customer, and outbound logistics
  (physical distribution of product) to support
  external customers.
• Examples of business logistics capabilities
  include the continuous flow, world-class
  suppliers, shipment tracking, transportation,
  network, inventory management, and automated
  materials handing of manufacturing plant(inbound
  logistics)

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Event logistics

• The network of activities that brings together
  the resources required for an event to take place
  (International Olympic Committee, 1996). Event
  logistics is characterized by deployment of
  resources (forward logistics) and withdrawal of
  resources (reverse logistics) according to the
  events schedule, significant contingency-planning,
  and the powerful presence of the logistics
  function in the events management team (Russell,
  2000). Examples of event logistics include the
  detailed planning and support requirements
  necessary to execute a circus, a rock concert, a
  scout encampment, news coverage of the 0. J.
  Simpson murder trial (more than 500 reporters and
  their satellite-linked vans and other equipment),
  the Olympic Games, and a Presidential trip.

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Process logistics

• The acquisition, scheduling, and management of
  human and material resources to support a
  service. Process logistics typically involves the
  coordinated employment of facilities, capital
  assets, and service personnel to create the
  framework for a process to occur. Examples
  include bus transportation of school children,
  mail delivery, drug smuggling, Red Cross relief
  operations, and operation of a multidimensional
  orthodontics office (scheduling stations,
  personnel, and parallel and sequential workflow
  for efficient and effective service).

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Service logistics

• The acquisition, scheduling, and management of
  the facilities/assets. personnel, and materials
  to support and sustain a service operation or
  business.

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Emergency logistics

• The definition of emergency logistics remains
  ambiguous. One of the definition of emergency
  logistics is a process of planning, managing and
  controlling the efficient flows of relief,
  information, and services from points of origins
  to points of destinations to meet the urgent
  needs of affected people under emergency
  conditions.

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Emergency logistics (contd)

• The timeliness of relief supply and distribution
  is hardly controllable in the emergency context.
  This is true particularly in the crucial rescue
  period which refers to the critical 3-day period
  right after the occurrence of a disaster. This
  can be further explicated in two different
  facets
• (1) inbound logistics to relief distribution
  centers.
• (2) outbound logistics from relief
  distribution centers to affected areas.

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Emergency logistics (contd)

• Resource management for emergency logistics
  remains challenging. The operational environments
  of emergency logistics are intricately uncertain
  as the corresponding resources are attributed
  from both public and private sectors.
• Accurate, real-time relief demand information is
  required but almost inaccessible. Relief demander
  and the corresponding information provider can be
  different types of relief needed may vary with
  time and location.

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Emergency logistics (contd)
The proposed emergency logistics system
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Value-added role of logistics

• Four principal types of economic utility add
  value to a product or service. Included are form,
  time, place, and possession. Generally, most of
  the prodessionals credit manufacturing activities
  with providing form utility, logistics activities
  with time and place utility, and marketing
  activities with possession utility.

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Value-added role of logistics (contd)

• Form Utility.
• Form utility refers to the value added to goods
  through a manufacturing, production, or assembly
  process. For example, form utility results when
  raw materials are combined in some predetermined
  manner to make a finished product. This is the
  case, for example, when a bottling firm adds
  together syrup, water, and carbonation to make a
  soft drink. This simple process of adding the raw
  materials together to produce the soft drink
  presents a change in production form that adds
  value to the product.
• In todays economic environment, certain
  logistics activities can also provide form
  utility. For example, breaking bulk and product
  mixing, which typically take place at
  distribution centers, change a products form by
  changing its shipment size and packaging
  characteristics. Thus, unpacking a pallet of
  breakfast cereal into individual consumer-size
  boxes adds form utility to the product. However,
  the two principal ways in which logistics adds
  value are in place and time utility.

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Value-added role of logistics (contd)

• Place Utility.
• Logistics provides place utility by moving goods
  from production surplus points to points where
  demand exists. Logistics extends the physical
  boundaries of the market area, thus adding
  economic value to the goods. This addition to the
  economic value of goods or services is known as
  place utility. Logistics creates place utility
  primarily through transportation. For example,
  moving farm produce by rail or truck from farm
  areas to markets where consumers need this
  produce creates place utility. The same is also
  true when steel is moved to a plant where the
  steel is used to make another product. The market
  boundary extension added by place utility
  increases competition, which usually leads to
  lower prices and increased product availability.

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Value-added role of logistics (contd)

• Time Utility.
• Not only must goods and services be available
  where consumers need them, but they must also be
  at that point when customers demand them. This is
  called time utility, or the economic value added
  to a good or service by having it at a demand
  point at a specific time. Logistics creates time
  utility through proper inventory maintenance and
  the strategic location of goods and services. For
  example, logistics creates time utility by having
  heavily advertised products and sale merchandise
  available in retail stores at precisely the time
  promised in the advertising copy.
• To some extent, transportation may create time
  utility by moving something more quickly to a
  point of demand. For example, substituting air
  transportation for warehousing adds time utility.
  Time utility is much more important today because
  of the emphasis upon reducing lead time and
  minimizing inventory levels through
  logistics-related strategies such as JIT
  inventory control.

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Value-added role of logistics (contd)

• Possession Utility.
• Possession utility is primarily created through
  the basic marketing activities related to the
  promotion of products or services. We may define
  promotion as the effort, through direct and
  indirect contact with the customer, to increase
  the desire to possess a good or to benefit from a
  service. The role of logistics in the economy
  depends upon the existence of possession utility,
  for time or place utility make sense only if
  demand for the product or service exists. It is
  also true that marketing depends upon logistics,
  since possession utility cannot be acted upon
  unless time and place utility are provided. Order
  fulfillment is the critical and often final step
  for meeting customer requirements.

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Value-added role of logistics (contd)
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Next.

• A General Theory of Logistics Practices