Logistics Concepts and Structure   New Logistics Paradigm

Logistics Concepts and Structure New Logistics Paradigm PowerPoint PPT Presentation


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2. Outline. IntroductionMilitary logistics Engineering logistics Business logistics Event logistics Process logistics Service logistics Emergency logisticsValue-added role of logistics . 3. Introduction. A consideration of the various practices that, taken together, define general logistics (cf. emergency logistics) suggests that logistics is a branch of management science that is practiced in seven areas: military logistics, engineering logistics, business logistics, event logistics, pr32900

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1. 1 Logistics Concepts and Structure New Logistics Paradigm Te-Cheng Yu Dept. of Logistics Management, National Kaohsiung Marine University

2. 2 Outline Introduction Military logistics Engineering logistics Business logistics Event logistics Process logistics Service logistics Emergency logistics Value-added role of logistics

3. 3 Introduction A consideration of the various practices that, taken together, define general logistics (cf. emergency logistics) suggests that logistics is a branch of management science that is practiced in seven areas: military logistics, engineering logistics, business logistics, event logistics, process logistics, service logistics, and emergency logistics.

4. 4 Military logistics . The design of supportability into weapon systems and other capital assets, assessment of technical requirements for training and maintenance, and integration of all aspects of support for the operational capability of military forces and their equipment. Examples of military logistics capabilities include airlift, sealift, operational readiness, and sustainability. In addition to protocols, there are logistics plans, provisioning, war reserve spare kits, containerization, supply support, maintenance plans, materiel and service contracts, and industrial mobilization, et al.

5. 5 Engineering logistics The reliability, maintainability, and configuration planning, provisioning and continuing supply support, repair level analysis, technical manuals development, training, data and records management, life-cycle cost management, and computation of post-sale support requirements,. In this sense of the word, engineering logistics is largely a modeling and quantitative discipline. Examples of engineering logistics capabilities include design for supportability, integrated logistics support, tradeoffs, and life-cycle cost management.

6. 6 Business logistics The planning and management of supply sources, inventories, transportation, distribution networks, and related activities and supporting information to meet customer requirements. Business logistics evolved into a dichotomy of inbound logistics (materials management or physical supply) to support production, where the plant is the customer, and outbound logistics (physical distribution of product) to support external customers. Examples of business logistics capabilities include the continuous flow, world-class suppliers, shipment tracking, transportation, network, inventory management, and automated materials handing of manufacturing plant(inbound logistics)

7. 7 Event logistics The network of activities that brings together the resources required for an event to take place (International Olympic Committee, 1996). Event logistics is characterized by deployment of resources (forward logistics) and withdrawal of resources (reverse logistics) according to the events schedule, significant contingency-planning, and the powerful presence of the logistics function in the events management team (Russell, 2000). Examples of event logistics include the detailed planning and support requirements necessary to execute a circus, a rock concert, a scout encampment, news coverage of the 0. J. Simpson murder trial (more than 500 reporters and their satellite-linked vans and other equipment), the Olympic Games, and a Presidential trip.

8. 8 Process logistics The acquisition, scheduling, and management of human and material resources to support a service. Process logistics typically involves the coordinated employment of facilities, capital assets, and service personnel to create the framework for a process to occur. Examples include bus transportation of school children, mail delivery, drug smuggling, Red Cross relief operations, and operation of a multidimensional orthodontics office (scheduling stations, personnel, and parallel and sequential workflow for efficient and effective service).

9. 9 Service logistics The acquisition, scheduling, and management of the facilities/assets. personnel, and materials to support and sustain a service operation or business.

10. 10 Emergency logistics The definition of emergency logistics remains ambiguous. One of the definition of emergency logistics is “a process of planning, managing and controlling the efficient flows of relief, information, and services from points of origins to points of destinations to meet the urgent needs of affected people under emergency conditions.”

11. 11 Emergency logistics (cont’d) The timeliness of relief supply and distribution is hardly controllable in the emergency context. This is true particularly in the crucial rescue period which refers to the critical 3-day period right after the occurrence of a disaster. This can be further explicated in two different facets: (1) inbound logistics to relief distribution centers. (2) outbound logistics from relief distribution centers to affected areas.

12. 12 Emergency logistics (cont’d) Resource management for emergency logistics remains challenging. The operational environments of emergency logistics are intricately uncertain as the corresponding resources are attributed from both public and private sectors. Accurate, real-time relief demand information is required but almost inaccessible. Relief demander and the corresponding information provider can be different types of relief needed may vary with time and location.

13. 13 Emergency logistics (cont’d)

14. 14 Value-added role of logistics Four principal types of economic utility add value to a product or service. Included are form, time, place, and possession. Generally, most of the prodessionals credit manufacturing activities with providing form utility, logistics activities with time and place utility, and marketing activities with possession utility.

15. 15 Value-added role of logistics (cont’d) Form Utility. Form utility refers to the value added to goods through a manufacturing, production, or assembly process. For example, form utility results when raw materials are combined in some predetermined manner to make a finished product. This is the case, for example, when a bottling firm adds together syrup, water, and carbonation to make a soft drink. This simple process of adding the raw materials together to produce the soft drink presents a change in production form that adds value to the product. In today’s economic environment, certain logistics activities can also provide form utility. For example, breaking bulk and product mixing, which typically take place at distribution centers, change a product’s form by changing its shipment size and packaging characteristics. Thus, unpacking a pallet of breakfast cereal into individual consumer-size boxes adds form utility to the product. However, the two principal ways in which logistics adds value are in place and time utility.

16. 16 Value-added role of logistics (cont’d) Place Utility. Logistics provides place utility by moving goods from production surplus points to points where demand exists. Logistics extends the physical boundaries of the market area, thus adding economic value to the goods. This addition to the economic value of goods or services is known as place utility. Logistics creates place utility primarily through transportation. For example, moving farm produce by rail or truck from farm areas to markets where consumers need this produce creates place utility. The same is also true when steel is moved to a plant where the steel is used to make another product. The market boundary extension added by place utility increases competition, which usually leads to lower prices and increased product availability.

17. 17 Value-added role of logistics (cont’d) Time Utility. Not only must goods and services be available where consumers need them, but they must also be at that point when customers demand them. This is called time utility, or the economic value added to a good or service by having it at a demand point at a specific time. Logistics creates time utility through proper inventory maintenance and the strategic location of goods and services. For example, logistics creates time utility by having heavily advertised products and sale merchandise available in retail stores at precisely the time promised in the advertising copy. To some extent, transportation may create time utility by moving something more quickly to a point of demand. For example, substituting air transportation for warehousing adds time utility. Time utility is much more important today because of the emphasis upon reducing lead time and minimizing inventory levels through logistics-related strategies such as JIT inventory control.

18. 18 Value-added role of logistics (cont’d) Possession Utility. Possession utility is primarily created through the basic marketing activities related to the promotion of products or services. We may define promotion as the effort, through direct and indirect contact with the customer, to increase the desire to possess a good or to benefit from a service. The role of logistics in the economy depends upon the existence of possession utility, for time or place utility make sense only if demand for the product or service exists. It is also true that marketing depends upon logistics, since possession utility cannot be acted upon unless time and place utility are provided. Order fulfillment is the critical and often final step for meeting customer requirements.

19. 19 Value-added role of logistics (cont’d)

20. 20 Next…. A General Theory of Logistics Practices

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