Logistics

"Logistics Management" redirects here. For the magazine, seeLogistics Management (magazine).

For other uses, seeLogistics (disambiguation).

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

AwarehouseinSouth Jersey,a U.S.East Coast epicenterfor logistics and warehouse construction outsidePhiladelphia,where trucks deliver slabs ofgranite

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 provide garbage collection, mail deliveries, public utilities, and after-sales services, logistical problems must be addressed.

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 planningorsingle-machine scheduling.Logistics occupies a significant amount of the operational cost of an organisation or country. Logistical costs of organizations in theUnited Statesincurred 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.

Dedicatedsimulation softwarecan 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

A warehouse implementing a pallet rack storage system

Alogistics specialistinventories supplies in a storeroom aboard the aircraft carrierUSSGeorge H. W. BushduringOperation Enduring Freedomin thePersian Gulfin October 2011.

The termlogisticsis attested in English from 1846, and is from French:logistique,where it was either coined or popularized bySwiss militaryofficer 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),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 Chambrayin 1832, writing:

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 termlogistiquewas present in theDictionnaire de l'Académie françaiseas a synonym foralgebra.

The French word:logistiqueis ahomonymof the existing mathematical term, fromAncient Greek:λογῐστῐκός,romanized:logistikós,a traditional division ofGreek mathematics;the mathematical term is presumably the origin of the termlogisticinlogistic growthand related terms. Some sources give this instead as the source oflogistics,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

Jomini originally defined logistics as:

... 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 a named point...

TheOxford English Dictionarydefines logistics as "the branch ofmilitary sciencerelating to procuring, maintaining and transporting material, personnel and facilities ". However, theNew Oxford American Dictionarydefines 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".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),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 termsoperationsorproductionmanagement 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 managementand 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.All these terms may suffer fromsemantic changeas a side effect of advertising.

Logistics activities

Loading of athermal oxidizerin preparation for its transport to a manufacturing plant

Aforklifttruck loads a pallet of humanitarian aid toPakistanon board aC-17aircraft followingdevastating floodsin the country in August 2010.

The Logistics Centre of theFinnish Red CrossinTampere,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.

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.

Inbound logisticsis 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 logisticsis 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 logisticsconsists 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 logisticsconsists of the activities required to set up or establish a plan for logistics activities to occur.

Global logisticsis 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 logisticshas, 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.

Disposal logisticshas 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 logisticsdenotes 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."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 logisticsdescribes 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 logisticsandmilitary logisticssince it concerns highly complicated technological systems for whichreliability,availabilityandmaintainabilityare essential, e.g.,weapon systemand 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.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.

The termproduction logisticsdescribes 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.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 theautomotiveandmedicalindustries.

Construction logisticshas 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

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

• 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

Military logistics

Main article:Military logistics

ThePunjab Regimentusing mules for transporting cargo inBurmaduringWorld War II.Animals have been used for logistical transport throughout history; theRoman armypreferred mules over donkeys for cargo transport.

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 Wellingtonare considered to have been logistical geniuses: Alexander's expedition benefited considerably from his meticulous attention to the provisioning of his army,Hannibal is credited to have "taught logistics" to theRomansduring thePunic Warsand the success of the Anglo-Portuguese army in thePeninsula Warwas due to the effectiveness of Wellington's supply system, despite the numerical disadvantage.The defeat of the British in theAmerican War of Independenceand the defeat of theAxisin theAfrican theaterofWorld War IIare attributed by some scholars to logistical failures.

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 Officersmanage how and when to move resources to the places they are needed.

Supply chain managementin military logistics often deals with a number of variables in predicting cost, deterioration,consumption,and future demand. TheUnited States Armed Forces' categoricalsupply classificationwas 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 partsare 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 Forcescan accurately supply troops with the items necessary at the precise moment they are needed.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

Aforkliftoperator 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".Business logistics incorporates allindustry sectorsand aims to manage the fruition ofproject life cycles,supply chains,and resultant efficiencies.

The termbusiness logisticshas evolved since the 1960sdue 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 andplanningof 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 asequenceof resources to carry out someproject,such as restructuring a warehouse.

Nodes of a distribution network

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.

The nodes of a distribution network include:

• Factories where products are manufactured or assembled
• Adepotor deposit, a standard type of warehouse for storing merchandise (high level of inventory)
• Distribution centersfororder processingandorder 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.
• Transit points forcross-dockingactivities, which consist of reassembling cargo units based on deliveries scheduled (only moving merchandise)
• Traditional "mom-and-pop"retail stores, modern supermarkets,hypermarkets,discount storesor also voluntary chains,consumers' co-operatives,groups of consumers withcollective buying power.Note thatsubsidiarieswill be mostly owned by another company andfranchisers,although using other company brands, actually own the point of sale.

Logistic families and metrics

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:

• 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

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

Unit loadsare combinations of individual items which are moved by handling systems, usually employing apalletof normed dimensions.

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

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

Order processingis 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).

Pickingcan 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 carouselor from an Automatic Vertical Storage System (AVSS). Automatic picking is done either withdispensersor depalletizing robots.

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

Transportation

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 scaleby 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.

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.

Cargo can be organized in differentshipment categories.Unit loadsare usually assembled into higher standardized units such as:ISO containers,swap bodiesorsemi-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 forwardersandmulti-modal transport operators.

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

Configuration and management

ALIFOrack system for storage of motorcycles

In this particular airline logistic network,Denverserves as a networkhubfor 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.

Similarly to production systems, logistic systems need to be properly configured and managed. Actually a number of methodologies have been directly borrowed fromoperations managementsuch as usingEconomic Order Quantitymodels for managing inventory in the nodes of the network.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: dimensioningrackcells, choosing apalletizingmethod (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 tobendingand proper placement ofsprinklers.Althoughpickingis 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 forsortingwhen designing the conveyor system or installing automaticdispensers.

Configuration at the level of the distribution system concerns primarily the problem oflocationof the nodes in geographic space and distribution ofcapacityamong 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 chainare very rarely owned by a single enterprise. Distribution networks can be characterized by numbers of levels, namely the number of intermediary nodes betweensupplierand 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).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 (bothvehiclesorthoroughfares), the introduction ofregulations(notably those regarding pollution) and availability of ICT supporting systems, such asERPore-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 lifesandexpiration 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).

Pickingefficiency varies greatly depending on the situation.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 controlanddeliverypath optimization. Note that the logistician may be required to manage thereverse flowalong with the forward flow.

Warehouse management system and control

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 maximizeefficiencyfor companies that rely on the effective operation of their warehouse or distribution center.

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.

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.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 facilitiesdecides 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.

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

Horizontalbusiness alliancesoften occur between logistics service providers, i.e., the cooperation between two or more logistics companies that are potentially competing.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.

Logistics automation

Main article:Logistics automation

Anautomated storage and retrieval systemused by both theU.S. militaryatMarch Air Reserve BaseinRiverside County, California,in December 1995

Logistics automationis the application of computer software orautomatedmachinery to improve the efficiency of logistics operations. This typically refers to operations within a warehouse or distribution center with broader tasks undertaken bysupply chain engineeringsystems andenterprise resource planningsystems.

Industrial machinery can typically identify products through eitherbarcodeorRFIDtechnologies. 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

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 trendin 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 Universityin 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 Charterin 1926. The Chartered Institute is one of theprofessional bodiesor institutions for the logistics and transport sectors that offerprofessional qualificationsor degrees in logistics management. CILT programs can be studied at centers around the UK, some of which also offer distance learning options.The institute also have overseas branches namely The Chartered Institute of Logistics & Transport Australia (CILTA)in Australia and Chartered Institute of Logistics and Transport in Hong Kong (CILTHK)in Hong Kong. In the UK,Logistics Managementprograms are conducted by many universities and professional bodies such as CILT. These programs are generally offered at the postgraduate level.

The Global Institute of Logisticsestablished in New York in 2003 is athink tankfor the profession and is primarily concerned with intercontinental maritime logistics. It is particularly concerned withcontainerlogistics and the role of theseaport authorityin the maritime logistics chain.

The International Association of Public Health Logisticians (IAPHL)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

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

• Logistics Museum (Saint Petersburg,Russia)
• Museum of Logistics (Tokyo, Japan)
• Beijing Wuzi UniversityLogistics Museum (Beijing, China)

Military logistics

• Royal Logistic Corps Museum(Hampshire,England, United Kingdom)
• The Canadian Forces Logistics Museum (Montreal,Quebec, Canada)
• Logistics Museum (Hanoi,Vietnam)

See also

• Automated identification and data capture– Methods of automatically identifying objects by computer systemPages displaying short descriptions of redirect targets
• Document automation– Design of systems for electronic documents
• Field inventory management– Function of understanding stock mix of a company and the different demands on that stock
• Freight claim– Legal demand by a shipper or consignee against a carrier in respect of damage or loss to a shipment
• Freight forwarder– Handles logistics for freight
• Incoterms– Standardized contract terms regarding transportation and delivery
• Containerization– Intermodal freight transport system
• Integrated Service Provider– Type of logistics services firm
• Inventory management software– Software for tracking stock levels and flow
• Performance-based logistics– Defense acquisition strategy for cost-effective weapon system support
• Physical inventory
• Sales territory– Geographic area or customer group managed by a sales representative
• Storage management system– Data storage techniquePages displaying short descriptions of redirect targets
• Blockchain– Distributed data store for digital transactions
• Dutch flower bucket
• Self-driving truck– Type of autonomous vehicle
• Automated storage and retrieval system– Robotic warehouse for physical objects
• Automated guided vehicle– Type of portable robot

Further reading

• 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.ISBN978-3-662-48513-2
• Preclík Vratislav: Průmyslová logistika (Industrial logistics), 359 p.,ISBN80-01-03449-6,First issue Nakladatelství ČVUT v Praze, 2006, pp. 7–50, 63–73, 75–85, 123–347, Prague 2006.