The Growing World of Logistics: The Growing World of Logistics Te-Cheng Yu Dept. of Logistics Management, National Kaohsiung Marine University A General Theory of Logistics Practices


Contents: Contents Introduction The term logistics Toward a fully integrated logistics Logistics Perspectives Definitions of logistics A new logistics paradigm A General Theory of Logistics Practices The future development of logistics


Introduction : Introduction Management evolution Reengineering the Corporation (Champy & Hammer, 1993 ) X-engineering the Corporations (Champy, 2003) Chinese “logistics” Back to the Chu-Han empire After Dept of Logistics Management in NKMU What is logistics? Strategic resources planning An effective vertical integration system which demands fully support to provide all of the usable resources, frames the best strategy and tactics for aiding the front-line team to achieve target, and wins every encountered battle with limited resources


The term logistics(1): The term logistics(1) In Greek & French Logistikos is noted the concept of logic and means skilled in calculation. Logistique is probably influenced by the French loger meaning to quarter (lodge) soldiers. Hence, the combination of logic, calculation, and quartering soldiers appears to have yielded the western “logistics”. In 18th Europe Military terminology Encamping and quartering troops Stocking of supply depots


The term logistics(2): The term logistics(2) In 19th America A formal sense in the American lexicon A branch of the art of war pertaining to the movement and supply of armies Until World War II The support of military forces and their equipment Beginning in the 1960s From military logistics to engineering logistics Logistics is largely a modeling and quantitative discipline From military logistics to business logistics Physical distribution of consumer goods in marketing Evolving into a dichotomy of inbound and outbound logistics


The term logistics(3): The term logistics(3) Beginning in the 1970s The term logistics crept into the lexicon of the common culture. Being used with regard to the supply support of activities from church picnics to the Olympics. Most recently SCM (Supply Chain Management) A linking of all firms up and down the supply chain in a collaborative and seamless network From ultimate material sources to ultimate customers


Toward a fully integrated logistics : Toward a fully integrated logistics SCM Supply Chain Management New management paradigm Value chain New logistics paradigm Process logistics New logistics management paradigm “X-engineering the Corporations” on marketing channel


Logistics Perspective: Logistics Perspective Inventory Customer Dictionary International Society of Logistics famous nebulous Biblical Utility Council of Logistics Management Component Functional Common culture


Logistics Definitions(1): Logistics Definitions(1) Inventory Management of materials in motion and at rest. Customer Getting the right product, to the right customer, in the right quantity, in the right condition, at the right place, at the right time, and with the right cost. (called the Seven Rs of Logistics.)


Logistics Definitions(2): Logistics Definitions(2) Dictionary The branch of military science having to do with procuring, maintaining, and transporting material, personnel, and facilities. International Society of Logistics The art and science of management, engineering, and technical activities concerned with requirement, design, and supplying and maintaining resources to support objectives, plans, and operations.


Logistics Definitions(3): Logistics Definitions(3) Famous Nebulous World War Ⅱ Chief of US Naval Operations Admiral Ernest H. King: “I don’t know what the hell this logistics is that (Army Chief of Staff General George C.) Marshall is always taking about, but I want some of it.” Biblical “I have heard of you…that light and under-standing and excellent wisdom are found in you…I have heard that you give interpretations and solve problems…you shall be clothed with purple and have a chain of gold about your neck.


Logistics Definitions(4): Logistics Definitions(4) Utility Providing time and place utility/value of materials and products in support of organization objectives. Council of Logistics Management That part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption in order to meet customers’ requirements.


Logistics Definitions(5): Logistics Definitions(5) Component Supply management for the plant (inbound logistics) and distribution management for the firm’s customers (outbound logistics) Material support of manufacturing and product support of marketing operations.


Logistics Definitions(6): Logistics Definitions(6) Functional Materials requirement determination, purchasing, transportation, inventory management, warehousing, materials handling, industrial packaging, facility location analysis, distribution, return goods handling, information management, customer service, and all other activities concerned with supporting the internal stores) with product customer (manufacturing) with materials and the external customer (retail stores) with product. Common culture Handling the details of an activity.


What is logistics?: What is logistics? 狹義的定義： Management of materials in motion and at rest. Getting the right product, to the right customer, in the right quantity, in the right condition, at the right place, at the right time, and with the right cost. (called the Seven Rs of Logistics.) …… 簡單的定義： 整合性物流系統 供應鏈系統 完整的定義： 「一套新古典經營模式，基於活用資源的哲學，精打細算，有效的垂直整合，從原物料供應、產品分配到最終顧客服務之間的跨流程，包括商流、物流、資訊流與金流整合，發展成為一個跨組織合作的供應鏈管理體系」。 廣義的定義： 「在營帳中謀畫戰略」，可以泛指「事先謀劃計策」


A new logistics paradigm: A new logistics paradigm Military logistics (軍事運籌) Engineering logistics (工程運籌) Business logistics (商業運籌) Events logistics (活動運籌) Process logistics (行程運籌)


Military logistics: Military logistics The design of supportability into weapon systems and other capital assets, assessment of technical requirements for training and maintenance, computation of post-war support requirements, and integration of all aspects of support for operational capability of military forces and their equipments.


Engineering logistics: Engineering logistics The design of supportability into engineering systems and other capital assets, assessment of technical requirements for training and maintenance, computation of post-sale support requirements, and integration of all aspects of support for operational capability of engineering projects and related equipments.


Business logistics: Business logistics The managing of supply sources, inventories, transportation, distribution networks, and related activities and supporting information to meet customer requirements. Types and Examples Inbound logistics Wal-Mart: A firm like Proctor and Gamble will specify logistics standards for efficient and responsive support of its production operations…….a network of world-class suppliers, transportation partners and continuous flow capability. Outbound logistics Wal-Mart: Proctor and Gamble’s customer is in the driver’s seat, imposing service standards on Proctor and Gamble’s logistics system as 95% order fill rate, 5-day order cycle and damage-free delivery……


Events logistics: Events logistics The network of activities that brings together the resources required for an event to take place. Types Forward logistics: Deployment of resources Reverse logistics: Withdrawal of resources Examples The Olympic Games A presidential trip


Process logistics: Process logistics The acquisition, scheduling, and management of human and material resources to support a service. Involve the coordinated employment of facilities, capital assets, and service personnel to create the framework for a process to occur. Examples Bus transportation of school children Mail delivery Drug smuggling


Supply Chain Management: Supply Chain Management SCM is the collaborative integration of all logistics processes by all players in the chain, from original suppliers through end users. Customer-driven system involving the sharing of information, risks, and assets among partners to achieve an integrated, seamless, responsive distribution system Pull system (cf. Push system) Strategic alliance Shared data System optimization Fully integrated logistics system Business logistics as a component of SCM SCM is differentiated from logistics in that it involves all partners up and down the supply chain. Channel management Integrated business logistics Group management


A General Theory of Logistics: A General Theory of Logistics The dictionary gives only one definition of logistics Future dictionaries should modernize their perspective in practice and offer multiple definitions of the term Five types of logistics are considered in the real world. Characteristics Customer service Developing capabilities and managing activities Logic and calculation


A General definition based on Logistics Practices: A General definition based on Logistics Practices Logistics is the science of developing and managing the capabilities and protocols that are responsive to customer-driven service requirements Science: Logic, math, statistics, models, computers, IT….. Developing: Formulating objectives, designing, team effort, partnering Managing: Planning, organizing, negotiating, programming, controlling Capabilities: Physical assets, programs, human capital, competence… Protocols: Operational plans, methods, logic network, outsourcing, contingency plans…. Responsive: Anticipate needs, meet needs… Customer-driven: Pinnacle of direction and control.. Service requirements: Meeting objectives, quality, excellence.


何謂運籌?根據運籌實務歸納…: 何謂運籌?根據運籌實務歸納… 運籌是一門科學 運籌是一門發展能耐與管理經營模式的科學 運籌是一門發展後勤競爭能耐與提供有效經營模式, 提供產品或服務以回應顧客導向的服務需求的科學 後勤競爭能耐(capabilities): 有形資產、行動方案、人力資本、競爭優勢… 有效經營模式(protocols ):營運計畫、方法、邏輯網絡、外包、應變計畫…. 運籌是一套新古典經營模式，基於活用資源的哲學，精打細算，有效的垂直整合從供應、分配到顧客之間的商流、物流、資訊流與金流，發展成為一個跨組織合作的供應鏈管理體系


Example Elements of Military logistics Practices: Example Elements of Military logistics Practices Capabilities: Airlift, Sealift, Operational readiness, Sustainability Protocols: Logistics plans, Provisioning, War reserve spare kits, Containerization, Supply support, Maintenance plans, Material and service contracts, Industrial mobilization Service: Fuel, Rations, Spare parts, Maintenance, Ordnance, Mail, Medical supply, (personnel) Customer:


Example Elements of Engineering logistics Practices: Example Elements of Engineering logistics Practices Capabilities: Design for supportability, Integrated logistics support, Tradeoffs, Life-cycle cost management. Protocols: Reliability engineering, Maintainability engineering, Modeling, Configuration management, Repair-level analysis, Data management, Life-cycle costing, Training engineering, Logistics support analysis. Service: Operational readiness, Sustainability, Product support. Customer:


Example Elements of Business logistics Practices: Example Elements of Business logistics Practices Inbound logistics Outbound logistics Capabilities: Protocols: Service: (Customer):


Inbound business logistics: Inbound business logistics Capabilities: Continuous flow, World-class suppliers, Shipment tracking, Transportation network, Inventory Management, Automated materials handling Protocols: Demand forecasting, MRP or JIT, Strategic Purchasing, Global positioning satellite system, Dedicated contract carriage, Warehouse management system, Automated storage and retrieval systems, Bar codes or RFID Service: In stock, Minimal inventory, reliable deliveries, warehouse accuracy, responsive to requirements Customer: Manufacturing plant (Production)


Outbound business logistics: Outbound business logistics Capabilities: Customer-driven, Computer systems, Regional distribution centers, Value-added services, Shipment tracking, Carrier management, Information accuracy Protocols: POS technology replenishment system, E-commerce, MIS, Merchandise labeling/assorting WWW site, Private fleet, Advance packaging, Vendor-managed inventory Service: S.D. (Sales Driver) 95%order fill rate, 5-day order cycle, 99%picking accuracy, damage-free delivery, liberal return policy, 96% on-time delivery, customer satisfaction Customer: Retail sore


Example Elements of Event logistics Practices: Example Elements of Event logistics Practices Capabilities: Pre-event planning and staging, Support, Cleanup (Asset withdrawal) Protocols: Logistician authority, Strategic plan, Tactical plan, Procurement system, Transportation network, Requirement algorithms, Command post, Receiving and storage, Facilities plans, Service contracts, Contingency plans, Packing and crating, Reverse logistics. Service: Equipment in place, Supply in place, Facility operational, Inventory management and issues, Asset control and protection, Flexible response, Participant support services, Media support services, Redeployment after event. Customer:


Example Elements of Process logistics Practices: Example Elements of Process logistics Practices Capabilities: Bus transportation. Protocols: Asset procurement Vehicle maintenance, Route design, Time schedules, Fuel contracts, Safety plans. Service: Transportation to school. Customer: School children


The future development of logistics : The future development of logistics Logistics is the philosophy in using resources, including human resources, tools, and materials Logistics is the strategic planning for developing sustained competitive advantage Logistics is an integrated supply and distribution system with developing capabilities and managing protocols. Logistics is a sort of new classical business model for meeting the customers’ needs with careful calculation


Summary : Summary The new paradigm, a science, as a system Logistics is logic, wisdom, calculations, models, networks, inventories, transportation, distribution, customer service, time-and-place utility, storage, flow, details, optimization, and collaborating. A set of support activities, being responsive to customer requirements for materials, goods, and services A science of developing capabilities and managing the protocols that are responsive to customer-driven service requirements.


Rediscover Logistics Management in NKMU: Rediscover Logistics Management in NKMU Focus on Business Logistics(商業運籌) Elements of Business logistics(1) Inbound logistics vs. Outbound logistics Supply logistics vs. Distribution logistics Elements of Business logistics(2) Supply logistics (供應運籌) Production logistics (生產運籌) Distribution logistics (流通運籌)


Supply logistics (definition): Supply logistics (definition) The managing of supply sources, inventories, transportation, distribution networks, and related activities, and supporting of information to meet the requirements of internal stores or end users To integrate all processes and related activities by all players in the supply chain, from original suppliers through end users To specify operation standards for efficient and responsive support of its production . To develop a network of world-class suppliers, transportation partners and continuous flow capability.


Production logistics (definition): Production logistics (definition) The science of managing, engineering, and technical activities concerned with production capacity, schedule, and delivery to support manufacturing objectives, plans, and operations. The science of supplying and maintaining resources to support manufacturing objectives, plans, and operations


Distribution logistics (definition): Distribution logistics (definition) The science of developing the Integrated support capabilities that are responsive to customer-driven service requirements and managing protocols that help interpret marketing place and solve problems. The science of imposing service standards on its distribution system , such as 95% order fill rate, 5-day order cycle, and damage-free delivery……


Toward a Framework of LM: Toward a Framework of LM


Critical Concepts of LM: Critical Concepts of LM Science: Logic, math, statistics, models, computers, IT….. Developing: Formulating objectives, designing, team effort, partnering Managing: Planning, organizing, leading, controlling


Supply logistics: Supply logistics Capabilities: Continuous flow, World-class suppliers, Shipment tracking, Transportation network, Inventory Management, Automated materials handling Protocols Demand forecasting, MRP or JIT, Strategic Purchasing, Global positioning satellite system, Dedicated contract carriage, Warehouse management system, Automated storage and retrieval systems, Bar codes or RFID


Production logistics: Production logistics Capabilities: Design for supportability , Shop floor control, Capacity management, Scheduling, Tradeoffs, WIP control, requirement planning, production planning, manufacturing inventory, material handling , Order tracking Protocols Reliability engineering, Modeling, Configuration management, Repair-level analysis, Data management, Life-cycle costing, Training engineering MPS, MRP, JIT, TQM, ERP, CTM, TPM


Distribution logistics: Distribution logistics Capabilities: Customer-driven, Computer systems, Regional distribution centers, Value-added services, Shipment tracking, Carrier management, Information accuracy Protocols POS technology replenishment system, E-commerce, MIS, Merchandise labeling/assorting WWW site, Private fleet, Advance packaging, Vendor-managed inventory


The End: The End 運籌帷幄 決勝全球 Dept. of Logistics Management