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Logistics

From Wikipedia, the free encyclopedia
(Redirected fromLogistical)
"Logistics Management" redirects here. For the magazine, seeLogistics Management (magazine).
For other uses, seeLogistics (disambiguation).
Management of the flow of resources

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Awarehouse inSouth Jersey, a U.S.East Coast epicenter for logistics and warehouse construction outsidePhiladelphia, where trucks deliver slabs ofgranite[1]

Logistics is the part ofsupply chain management that deals with the efficient forward and reverse flow of goods, services, and related information from the point of origin to thepoint of consumption according to the needs of customers.[2][3] Logistics management is a component that holds thesupply chain together.[3] The resources managed in logistics may include tangible goods such as materials, equipment, and supplies, as well as food and other consumable items.

Inmilitary logistics, it is concerned with maintaining army supply lines with food, armaments, ammunition, and spare parts apart from the transportation of troops themselves. Meanwhile, civil logistics deals with acquiring, moving, and storing raw materials, semi-finished goods, and finished goods. For organisations that providegarbage collection, mail deliveries,public utilities, and after-sales services, logistical problems must be addressed.[2]

Logistics deals with the movements of materials or products from one facility to another; it does not include material flow within the production or assembly plants, such asproduction planning orsingle-machine scheduling.[2] Logistics occupies a significant amount of the operational cost of an organisation or country. Logistical costs of organizations in theUnited States incurred about 11% of the United States nationalgross domestic product (GDP) as of 1997. In theEuropean Union, logistics costs were 8.8% to 11.5% of GDP as of 1993.[2]

Dedicatedsimulation software can model, analyze, visualize, and optimize logistics' complexity. Minimizing resource use is a common motivation in all logistics fields. A professional working in logistics management is called a logistician.

Nomenclature

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A warehouse implementing a pallet rack storage system
Alogistics specialist inventories supplies in a storeroom aboard the aircraft carrierUSSGeorge H. W. Bush duringOperation Enduring Freedom in thePersian Gulf in October 2011.

The termlogistics is attested in English from 1846, and is from French:logistique, where it was either coined or popularized bySwiss military officer and writerAntoine-Henri Jomini, who defined it in hisSummary of the Art of War (Précis de l'Art de la Guerre). The term appears in the 1830 edition, then titledAnalytic Table (Tableau Analytique),[4] and Jomini explains that it is derived fromFrench:logis,lit.'lodgings' (cognate to Englishlodge), in the termsFrench:maréchal des logis,lit.'marshall of lodgings' andFrench:major-général des logis,lit.'major-general of lodging':

Autrefois les officiers de l’état-major se nommaient: maréchal des logis, major-général des logis; de là est venu le terme de logistique, qu’on emploie pour désigner ce qui se rapporte aux marches d’une armée.
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 byGeorges de Chambray [fr] in 1832, writing:[5]

Logistique: Ce mot me paraît être tout-à-fait nouveau, car je ne l'avais encore vu nulle part dans la littérature militaire. … il paraît le faire dériver du motlogis, étymologie singulière …
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 wordlodgings [logis], a peculiar etymology …

Chambray also notes that the termlogistique was present in theDictionnaire de l'Académie française as a synonym foralgebra.

The French word:logistique is ahomonym of the existing mathematical term, fromAncient Greek:λογῐστῐκός,romanizedlogistikós, a traditional division ofGreek mathematics; the mathematical term is presumably the origin of the termlogistic inlogistic growth and related terms. Some sources give this instead as the source oflogistics,[6] either ignorant of Jomini's statement that it was derived fromlogis, or dubious and instead believing it was in fact of Greek origin, or influenced by the existing term of Greek origin.

Definition

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Jomini originally defined logistics as:[4]

... l'art de bien ordonner les marches d'une armée, de bien combiner l'ordre des troupes dans les colonnes, les tems [temps] de leur départ, leur itinéraire, les moyens de communications nécessaires pour assurer leur arrivée à point nommé ...

... the art of well-ordering the functionings of an army, of well combining the order of troops in columns, the times of their departure, their itinerary, the means of communication necessary to assure their arrival at the right time ...

TheOxford English Dictionary defines logistics as "the branch ofmilitary science relating to procuring, maintaining and transporting material, personnel and facilities". However, theNew 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".[7] 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),[8] logistics is the process of planning, implementing and controlling procedures for the efficient and effectivetransportation 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.[9]

Academics and practitioners traditionally refer to the termsoperations orproduction 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 betweenoperations 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.[10] All these terms may suffer fromsemantic change as a side effect of advertising.

Logistics activities

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Loading of athermal oxidizer in preparation for its transport to a manufacturing plant
Aforklift truck loads a pallet of humanitarian aid toPakistan on board aC-17 aircraft followingdevastating floods in the country in August 2010.
The Logistics Centre of theFinnish Red Cross inTampere, Finland

Logistical activities can be divided into three main areas: order processing, inventory management, and freight transportation. Traditionally, order processing was a time-consuming activity that could take up to 70% of the order-cycle time. However, with new technologies such as bar code scanning, computers, and network connection, customer orders can quickly reach the seller in no time, and 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 to and from the customers and cope with the randomness of customer demands. However, maintaining an inventory requires capital investment in finished goods and maintaining a warehouse. Storage and order picking occupy most of the warehouse maintenance cost. Freight transportation forms a vital part of logistics and allows access to broad markets as goods can be transported to hundreds or thousands of kilometers away. Freight transportation accounts for two-thirds of logistical costs and significantly impacts customer service. Transportation policies and warehouse management are closely intertwined.[2]

The rise of commercial transactions through the internet gives rise to the need for "e-logistics". Compared to traditional logistics, e-logistics handles parcels valued at less than a hundred US dollars to customers scattered at various destinations worldwide. In e-logistics, customers' demands come in waves when compared to traditional logistics, where the demand is consistent.[2]

Inbound logistics is one of the primary logistics processes 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. 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
  • Green logistics
  • Global logistics
  • Domestics logistics
  • Concierge service
  • Reliability, availability, and maintainability
  • Asset control logistics
  • Point-of-sale material logistics
  • Emergency logistics
  • Production logistics
  • Construction logistics
  • Capital project logistics
  • Digital logistics
  • Humanitarian logistics

Procurement logistics consists ofmarket 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 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 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 theLogistics 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. Distribution logistics is necessary because production time, place, and quantity differ with the time, place, and quantity of consumption.[11]

Disposal logistics has the main 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 those reusing products and materials operations. 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."[12] More precisely, reverse logistics moves goods from their typical final destination to capture value or proper disposal. The opposite of reverse logistics isforward 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 achieved throughintermodal freight transport, path optimization, vehicle saturation, andcity logistics.

RAM logistics (see alsoLogistic engineering) combines bothbusiness logistics andmilitary logistics since it concerns highly complicated technological systems for whichreliability,availability andmaintainability 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. Some examples are refrigerators, stands, display monitors, seasonal equipment, poster stands & frames.

Emergency logistics (orhumanitarian 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 rapidly in the event of an emergency.[13] 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.[13][14]

The termproduction logistics describes logistic processes within a value-adding system (ex, a factory or a mine). Production logistics aims to ensure that each machine and workstation receives the right product in the correct 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 allows for improving the production logistics system accordingly.[15] 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 theautomotive andmedical 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 supply chain management and logistics.

Seven R's

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The Seven R's is a popular concept used to enforce best practices in logistics management which consists of the following:[16]

  • 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
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Military logistics

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Main article:Military logistics
ThePunjab Regiment using mules for transporting cargo inBurma duringWorld War II. Animals have been used for logistical transport throughout history; theRoman army preferred mules over donkeys for cargo transport.[17]

In military science, maintaining one's supply lines while disrupting those of the enemy is a crucial—some would say the most crucial—element ofmilitary strategy, since an armed force without resources and transportation is defenseless. The historical leadersHannibal,Alexander the Great, and theDuke of Wellington are considered to have been logistical geniuses: Alexander's expedition benefited considerably from his meticulous attention to the provisioning of his army,[18] Hannibal is credited to have "taught logistics" to theRomans during thePunic Wars[19] and the success of the Anglo-Portuguese army in thePeninsula War was due to the effectiveness of Wellington's supply system, despite the numerical disadvantage.[20] The defeat of the British in theAmerican War of Independence and the defeat of theAxis in theAfrican theater ofWorld War II are attributed by some scholars to logistical failures.[21]

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.

Inmilitary 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. TheUnited States Armed Forces' categoricalsupply 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 morerepair parts 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, theUS Armed Forces can accurately supply troops with the items necessary at the precise moment they are needed.[22] 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

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Business logistics
Distribution methods
Management systems
Industry classification
Aforklift operator stacking warehouse of goods on pallets inAllentown, Pennsylvania, in April 2004

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".[23] Business logistics incorporates allindustry sectors and aims to manage the fruition ofproject life cycles,supply chains, and resultant efficiencies.

The termbusiness logistics has evolved since the 1960s[24] 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, a key factor insupply-chain management. The main functions of a qualified logistician includeinventory management,purchasing, transportation,warehousing, consultation, and the organizing andplanning 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 asequence of resources to carry out someproject, such as restructuring a warehouse.

Nodes of a distribution network

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A distribution network would require several intermediaries to bring consumer or industrial goods from manufacturers to a user. Intermediaries would markup the costs of the products during distribution, but benefit users by providing lower transportation costs than the manufacturers. The number of intermediaries required for the distribution network depends upon the types of goods being distributed. For example, consumer goods such as cosmetics and handicrafts may not require any intermediaries as they can be sold door-to-door or can be obtained from local flea markets. For industrial goods such as raw materials and equipment, intermediaries are not needed because manufacturers can sell a large number of goods to a user. Generally, there are three types of intermediaries, namely: agent/broker, wholesaler, and retailer.[2]

The nodes of a distribution network include:

  • Factories where products are manufactured or assembled
  • Adepot or deposit, a standard type of warehouse for storing merchandise (high level of inventory)
  • Distribution centers fororder processing andorder fulfillment (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.[citation needed]
  • Transit points forcross-docking activities, which consist of reassembling cargo units based on deliveries scheduled (only moving merchandise)
  • Traditional "mom-and-pop" retail stores, modern supermarkets,hypermarkets,discount stores or also voluntary chains,consumers' co-operatives, groups of consumers withcollective buying power. Note thatsubsidiaries will be mostly owned by another company andfranchisers, although using other company brands, actually own the point of sale.

Logistic families and metrics

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A logistic family is a set of products that share a common characteristic: weight and volumetric characteristics, physical storing needs (temperature, radiation, etc.), handling needs, order frequency, package size, etc. The following metrics may be used by the company to organize its products in different families:[25]

  • 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, such as building, shelving, and services, and handling costs, such as people, handling machinery, energy, and maintenance.

Other metrics may present themselves in both physical or monetary form, such as the standardinventory turnover.

Handling and order processing

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Unit loads, which serve a protective function, for transportation of luggage at the airport

Unit loads are combinations of individual items which are moved by handling systems, usually employing apallet of normed dimensions.[26]

Handling systems include: trans-pallet handlers, counterweight handler, retractable mast handler, bilateral handlers, trilateral handlers,AGV and other handlers.

Storage systems include: pile stocking, cellracks (either static or movable), cantilever racks and gravity racks.[27]

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 andbill of lading).[28]

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-loadASRS, vertical orhorizontal carousel or from an Automatic Vertical Storage System (AVSS). Automatic picking is done either withdispensers or depalletizing robots.

Sorting can be done manually through carts or conveyor belts, or automatically throughsorters.

Transportation

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Main article:Cargo

Consolidating small shipments into large shipments can help to save transportation costs. There are three methods to do this: facility consolidation, multi-stop consolidation, and temporal consolidation. Facility consolidation uses theeconomics of scale by transporting small shipments over short distances and large shipments over long distances. Multi-stop consolidation makes multiple stops to consolidate small shipments in the case ofless-than-truckload shipping. Temporal consolidation adjusts the shipping schedules forwards or backward so as to make a single large shipment rather than several small shipments over time.[2]

Cargo can be consolidated into pallets or containers. There are five basic modes of transport, namely, ship, rail, truck, air, and pipeline operated by differentcarrier. These shipping methods can be combined in various ways such asintermodal transport (no handling),multimodal transport, andcombined transport (minimal road transport). A shipper chooses a carrier by taking into account the total cost of shipment and transit time. Air is the most expensive type of transport, followed by truck, rail, pipeline, and ship.[2]

Cargo can be organized in differentshipment categories.Unit loads are usually assembled into higher standardized units such as:ISO containers,swap bodies orsemi-trailers. Especially for very long distances, product transportation will likely benefit from using different transportation means: When moving cargo, typical constraints are maximum weight andvolume.

Operators involved in transportation include: all train, road vehicles, boats, airplanes companies,couriers,freight forwarders andmulti-modal transport operators.

Merchandise being transported internationally is usually subject to theIncoterms standards issued by theInternational Chamber of Commerce.

Configuration and management

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ALIFO rack system for storage of motorcycles
In this particular airline logistic network,Denver serves as a networkhub for theMidwestern U.S.

In the logistics business, a logistical system is designed at a minimum cost based on the expected customer service level. As the service improves, the number of sales also increased. As service is further improved, more sales are captured from competing providers. Further increase in customer service levels after these only increases sales marginally.[2]

Similarly to production systems, logistic systems need to be properly configured and managed. Actually a number of methodologies have been directly borrowed fromoperations management such as usingEconomic Order Quantity models for managing inventory in the nodes of the network.[29]Distribution resource planning (DRP) is similar toMRP, except that it does not 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) 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: dimensioningrack cells, choosing apalletizing method (manual or throughrobots), 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 tobending and proper placement ofsprinklers. Althoughpicking 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 forsorting when designing the conveyor system or installing automaticdispensers.

Configuration at the level of the distribution system concerns primarily the problem oflocation of the nodes in geographic space and distribution ofcapacity among the nodes. The first may be referred to asfacility location (with the special case ofsite selection) while the latter to as capacity allocation. The problem of outsourcing typically arises at this level: the nodes of asupply chain are very rarely owned by a single enterprise. Distribution networks can be characterized by numbers of levels, namely the number of intermediary nodes betweensupplier and consumer:

  • Direct store delivery, 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 regardingsafety 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).[25] 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 towardtrade barriers, innovation in transportation means (bothvehicles orthoroughfares), the introduction ofregulations (notably those regarding pollution) and availability of ICT supporting systems, such asERP ore-commerce.

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 ofconstraints: internal, such as using the available infrastructure, or external, such as complying with the given productshelf lifes andexpiration 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.[28] 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 mainlyinventory control anddelivery path optimization. Note that the logistician may be required to manage thereverse flow along with the forward flow.

Warehouse management system and control

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Warehouse management systems (WMS) can differ significantly fromwarehouse control systems (WCS), although there is some overlap in functionality. A WMS plans a weekly activity forecast based on such factors as statistics andtrends, whereas a WCS acts like a floor supervisor, working in real-time to get the job done by the most effective means. For example, a WMS can tell the system that it is going to need five ofstock-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. Workingsynergistically, WMS and WCS can resolve these issues and maximizeefficiency for companies that rely on the effective operation of their warehouse or distribution center.[30]

Logistics outsourcing

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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.[31]

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 aspin-off
  • Creation of ajoint venture

Third-party logistics (3PL) involves using external organizations to execute logistics activities that have traditionally been performed within an organization itself.[32] 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 ownwarehousing 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.[33]

The concept of a fourth-party logistics (4PL) provider was first defined by Andersen Consulting (nowAccenture) 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

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Horizontalbusiness alliances often occur between logistics service providers, i.e., the cooperation between two or more logistics companies that are potentially competing.[34] 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.[34]

Logistics automation

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Main article:Logistics automation
Anautomated storage and retrieval system used by both theU.S. military atMarch Air Reserve Base inRiverside County, California, in December 1995

Logistics automation is the application of computer software orautomated machinery to improve the efficiency of logistics operations. This typically refers to operations within a warehouse or distribution center with broader tasks undertaken bysupply chain engineering systems andenterprise resource planning systems.

Industrial machinery can typically identify products through eitherbarcode orRFID 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

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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, orfreight 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[as of?] 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 isKühne Logistics University in Hamburg, Germany. It is non-profit and supported by Kühne-Foundation of the logistics entrepreneurKlaus Michael Kühne.

TheChartered Institute of Logistics and Transport (CILT), established in the United Kingdom in 1919, received aRoyal Charter in 1926. The Chartered Institute is one of theprofessional bodies or institutions for the logistics and transport sectors that offerprofessional qualifications or degrees in logistics management. CILT programs can be studied at centers around the UK, some of which also offer distance learning options.[35] The institute also have overseas branches namely The Chartered Institute of Logistics & Transport Australia (CILTA)[36] in Australia and Chartered Institute of Logistics and Transport in Hong Kong (CILTHK)[37] 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[38] established in New York in 2003 is athink tank for the profession and is primarily concerned with intercontinental maritime logistics. It is particularly concerned withcontainer logistics and the role of theseaport authority in the maritime logistics chain.

The International Association of Public Health Logisticians (IAPHL)[39] 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

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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

Military logistics

See also

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References

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  1. ^Jon Hurdle (13 May 2021)."Report details surge in warehouse construction…". NJ Spotlight News. Retrieved3 January 2023.In South Jersey, the area has become the "epicenter" of warehouse construction in the greater Philadelphia region..'Activity in the Southern New Jersey industrial market continues to amaze,' the report said.
  2. ^abcdefghijGhiani, Gianpaolo; Laporte, Gilbert; Musmanno, Roberto (2004).Introduction to Logistics Systems Planning and Control. John Wiley & Sons. p. 1, 5, 10–15.ISBN 9780470849170. Retrieved8 January 2023.
  3. ^abKozlenkova, Irina V.; Hult, G. Tomas M.; Lund, Donald J.; Mena, Jeannette A.; Kekec, Pinar (December 2015)."The Role of Marketing Channels in Supply Chain Management".Journal of Retailing.91 (4):586–609.doi:10.1016/j.jretai.2015.03.003.Logistics refers to "that part of supply chain management 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 customers' requirements"
  4. ^abBaron de Jomini (1830).Tableau Analytique des principales combinaisons De La Guerre, Et De Leurs Rapports Avec La Politique Des États: Pour Servir D'Introduction Au Traité Des Grandes Opérations Militaires. p. 74.
  5. ^Chambray[in French] (1832)."Observation sur Le Tableau Analytique des principales combinaisons De La Guerre, Et De Leurs Rapports Avec La Politique Des États: Pour Servir D'Introduction Au Traité Des Grandes Opérations Militaires par le général Jomini".Le Spectateur militaire: Recueil de science, d'art et d'histoire militaires (in French).13: 19.
  6. ^Tepic, J.; Tanackov, I.; Stojić, Gordan (2011)."Ancient logistics – historical timeline and etymology"(PDF).Technical Gazette.18 (3).S2CID 42097070. Archived fromthe original(PDF) on 9 March 2019.
  7. ^Oxford Dictionaries. Retrieved 21 February 2012.
  8. ^Material Handling & Logistics Newshttp://mhlnews.com/global-supply-chain/council-logistics-management-become-council-supply-chain-management-professional
  9. ^"CSCMP glossary"(PDF). Archived fromthe original(PDF) on 22 May 2016. Retrieved10 September 2013.
  10. ^V. Misra, M.I. Kahn, U.K. Singh, Supply Chain Management Systems: Architecture, Design and Vision, North American Business Press 2010http://www.na-businesspress.com/jsis/misraweb.pdf
  11. ^Hofmann, Sebastian."Distribution logistics - definition, basics, examples". Retrieved3 March 2022.
  12. ^Agrawal, Saurabh; Singh, Rajesh K.; Murtaza, Qasim (1 April 2015)."A literature review and perspectives in reverse logistics".Resources, Conservation and Recycling.97:76–92.Bibcode:2015RCR....97...76A.doi:10.1016/j.resconrec.2015.02.009.ISSN 0921-3449.
  13. ^abCozzolino Alessandra, Humanitarian Logistics and Supply Chain Management, In Humanitarian Logistics, Springer Berlin Heidelberg 2012
  14. ^L. Torre, I.S. Dolinskaya, K.R. Smilowitz, Disaster relief routing: Integrating research and practice Socio-Economic Planning Sciences vol46, March 2012
  15. ^Nyhuis P., Wiendahi Hans-Peter, Fundamentals of Production Logistics, Springer Berlin Heidelberg 2009
  16. ^What is Logistics Management? Meaning, Importance, Basic Functions & Strategies onYouTube
  17. ^J.P. Roth, The logistics of Roman army at war (264 B.C. -A.D. 235)https://www.academia.edu/2450333/Logistics_of_the_Roman_Army_at_War
  18. ^Donald W. Engels, Alexander the Great and the Logistics of the Macedonian Army, University of California 1980
  19. ^Ayrault Dodge Theodore, Hannibal: A History of the Art of War Among the Carthaginians and Romans Down to the Battle of Pydna, 168 BC. Da Capo Press. 1995
  20. ^Troy T. Kirby, The Duke of Wellington and the Supply System During the Peninsula War, CreateSpace Independent Publishing Platform 2014
  21. ^Roger Morriss, "Colonization, Conquest, and the Supply of Food and Transport: The Reorganization of Logistics Management, 1780–1795,"War in History, (July 2007), 14#3 pp 310–324,
  22. ^Cloutier, Peter J.; Frank, Brian K. (July–August 2009)."The Joint Logistics Analysis Tool".Army Logistician.41 (4).
  23. ^Mallik, Susan (2010). "Customer Service in Supply Chain Management". In 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. p. 104.ISBN 978-0-470-24948-2.
  24. ^McGinnis M. A., Military Logistics: Insights for Business Logistics, International Journal of Physical Distribution & Logistics Management Vol 22, 1992
  25. ^abRuggeri, R.; Perego, A. (2001).Esercitazioni e temi d'esame di Logistica Industriale (in Italian). CUSL.ISBN 8881320150.
  26. ^ISO 6780:2003 – Flat pallets for intercontinental materials handling – Principal dimensions and tolerances.
  27. ^Lambert D., Stock J., Ellram L., Fundamentals of Logistics, McGraw-Hill 1998
  28. ^abD.F. Bozutti, M.A. Bueno-Da-Costa, R. Ruggeri, Logística: Visão Global e Picking, EdUFSCar 2010
  29. ^Waters D., Logistics: An Introduction to Supply Chain Management, Palgrave Macmillan 2003
  30. ^John T. Phelan, Jr. P.E.Supply & Demand Chain Executive. Enom, Inc.
  31. ^Wallenburg, Carl Marcus; Cahill, David L.; Michael Knemeyer, A.; Goldsby, Thomas J. (2011). "Commitment and Trust as Drivers of Loyalty in Logistics Outsourcing Relationships: Cultural Differences Between the United States and Germany".Journal of Business Logistics.32:83–98.doi:10.1111/j.2158-1592.2011.01008.x.
  32. ^Baziotopoulos (2008).An Investigation of Logistics Outsourcing Practices in the Greek Manufacturing Sector (PhD thesis).
  33. ^Zacharia, Zach G.; Sanders, Nada R.; Nix, Nancy W. (1 April 2011)."The Emerging Role of the Third-Party Logistics Provider (3PL) as an Orchestrator".Journal of Business Logistics.32 (1):40–54.doi:10.1111/j.2158-1592.2011.01004.x.
  34. ^abRaue, Jan Simon; Wieland, Andreas (2015)."The interplay of different types of governance in horizontal cooperations".The International Journal of Logistics Management.26 (2):401–423.doi:10.1108/IJLM-08-2012-0083.hdl:10398/4de0953a-3920-409a-b63a-60342c976528.S2CID 166497725.
  35. ^"Chartered Institute of Logistics and Transport (CILT) – Professional Logistics Programs".EduMaritime. Archived fromthe original on 3 August 2020. Retrieved20 June 2019.
  36. ^"Chartered Institute of Logistics & Transport Australia (CILTA) – Certification & Training".EduMaritime.
  37. ^"Chartered Institute of Logistics and Transport in Hong Kong (CILTHK) – PQE Programs".EduMaritime.
  38. ^"GIL HOME".Global Institute of Logistics. Retrieved20 June 2019.
  39. ^"International Association of Public Health Logisiticians".IAPHL. Retrieved20 June 2019.
  40. ^"Logistics Museum".logistics-museum.ru. Archived fromthe original on 20 June 2019. Retrieved20 June 2019.
  41. ^"Museum of Logistics | 物流博物館".www.lmuse.or.jp. Retrieved20 June 2019.
  42. ^"Canadian Forces Logistics Museum".Montreal Museums. Archived fromthe original on 20 June 2019. Retrieved20 June 2019.

Further reading

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  • 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 (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.ISBN 978-3-662-48513-2
  • Preclík Vratislav: Průmyslová logistika (Industrial logistics), 359 p.,ISBN 80-01-03449-6, First issue Nakladatelství ČVUT v Praze, 2006, pp. 7–50, 63–73, 75–85, 123–347, Prague 2006.
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