This document provides an overview of logistics and its evolution. It discusses the basic concepts of logistics, including how it involves the flow of materials, information, and money between suppliers and consumers. Logistics has evolved from focusing on individual workplaces and facilities to encompassing entire corporations and global supply chains. The document also distinguishes logistics from supply chain management, noting that logistics refers to activities that connect and activate objects within a supply chain. Integrated management approaches like collaboration, enterprise extension, and integrated service providers are discussed. Finally, the document contrasts traditional anticipatory business models based on forecasts with emerging response-based models enabled by information sharing.

1. An Overview of Logistics
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2. 1.1. Basic Concepts/Meanings of Logistics
Logistics is the flow of material,
information, and money between
consumers and suppliers.
Logistics is a process of
managing and coordinating the
flow of materials and
information within the company
and with its partners. 2

3. 1.2. The Evolution of Logistics
Logistics has evolved in scope and influence
in the private sector since the mid to late
1940s. In the 1950s and ‘60s, the military
was the only organization using the term
logistics. There was no true concept of
logistics in private industry at that time.
Instead, departmental divisions including
material handling, warehousing,
machining, accounting, marketing, and so
on, were the norm.
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4.  This evolution has passed through the following five phases
of logistics development—
1. workplace logistics,
2. facility logistics,
3. corporate logistics,
4. supply chain logistics, and
5. global logistics
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5. 1.Workplace Logistics/ Ergonomics
Workplace logistics is the flow of materials
within a single workstation.
The objective of workplace logistics is to
streamline the movements of an individual
working at a machine or along an assembly
line.
The principles and theory of workplace
logistics were developed by the founders of
industrial engineering workers in WWII and
post-WWII factory operations. 5

6. 2. Facility Logistics
Facility logistics is the flow of material between
workstations within the four walls of a facility
(that is, interwork station and intra-facility).
The facility could be a factory, terminal,
warehouse, or distribution center.
The roots of facility logistics was in the mass
production and assembly lines that
distinguished the 1950s and 1960s. In those
times and even into the late 1970s, many
organizations maintained material-handling
departments.
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7. 3. Corporate Logistics
 Corporate logistics is the flow of material and
information between the facilities and processes of a
corporation (inter workstation, inter-facility, and
intra-corporate).
 Corporate logistics is sometimes associated with the phrase
physical distribution that was popular in the 1970s.
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8. 4. Supply Chain Logistics
Supply chain logistics is the flow of material,
information, and money between
corporations (interwork station, inter
facility, inter corporate, and intra chain).
What do you think the difference
between SC and Logistics is?
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9.  It can be seen that to distinguish the two by
explaining the supply chain is the network of
facilities (warehouses, factories, terminals,
ports, stores, and homes), vehicles (trucks, trains,
planes, and ocean vessels), and logistics
information systems (LIS) connected by an
enterprise’s supplier’s suppliers and its customer’s
customers.
 Logistics is what happens in the supply chain.
Logistics activities (customer response, inventory
management, supply, transportation, and
warehousing) connect and activate the objects in
the supply chain 99

10. 5. Global Logistics
Global logistics is the flow of material,
information, and money between countries.
Global logistics connects our suppliers’
suppliers with our customers’ customers
internationally. Global logistics flows have
increased dramatically during the last
several years due to globalization in the
world economy, expanding use of trading
blocs, and global access to Web sites for
buying and selling merchandise.
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11. 1.3. Logistics versus SCM
Many logistics veterans believe we have progressed from
transportation physical distribution logistics
supply chain management.
By contrast, purchasing managers have evolved their thinking
from purchasing management procurement
supply chain management (SCM).
So what makes SCM different from logistics?
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12. ……………………………………………………………
 Manufacturing professionals hold a perception of SCM: as
the task of allocating and committing resources
for obtaining necessary supplies and capacity,
handling, and positioning products to meet
customer demands.
 In marketing—as well as the broader functionality that
includes business and consumer research, promotions, and
sales—SCM addresses the needs and market
potential of not only immediate
customers and consumers who buy
products and services, but also end users.
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13. 1.4. Generalized Supply Chain Model
 The generalized supply chain arrangement logically
and logistically links a firm and its
distributive and supplier network to
end customers
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14. 14

15. Next Class Discussion Points
Integrated Management
 Collaboration
 Enterprise Extension
 Integrated Service Providers
Responsiveness
 Anticipatory-Based Business Model
 Response-Based Business Model
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16. 1.5 Integrated Management
 Over the past few decades, it has become
increasingly apparent that functions, individually
performed best in class, do not necessarily
combine or aggregate to achieve lowest total
cost or highly effective processes.
 Integrated process management seeks to identify
and achieve lowest total cost by capturing
trade-offs that exist between functions.
 The focus of integrated management is lowest
total process cost, not achievement of the
lowest cost for each function included in the
process.
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17. Attributes of Integrated Management
 Collaboration
 Enterprise extension, and
 Integrated service providers.
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18. 1. Collaboration
 Supply chain integration really begins with the
goal of satisfying consumer demand. This
fundamental belief impacts everything we do in
the supply chain. We seek to raise the level of
service quality throughout the chain to more
effectively respond to consumer demand. And to
do this, we need to optimize information and
product flows through interdependent linked
business processes-from the sourcing of raw
materials all the way to the sale of the finished
products. As such, collaboration refers to
coordinated effort of the chain Participants to let
customer responses be efficient.
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19. 2. Enterprise Extension
 The central thrust of enterprise extension
expands managerial influence and control
beyond the ownership boundaries of a single
enterprise to facilitate joint planning and operations
with customers and suppliers.
 The fundamental belief is that collaborative behavior
between firms that integrate processes will maximize
customer impact, reduce overall risk, and greatly
improve efficiency.
 Enterprise extension builds on two basic paradigms:
A. Information sharing and
B. Process specialization. 19

20. Information Sharing is the
widespread belief that achieving a high
degree of cooperative behavior requires
that supply chain participants
voluntarily share operating information
and jointly plan strategies.
20

21. Process Specialization is commitment
to focusing collaborative arrangements on
planning joint operations toward a goal of
eliminating nonproductive or non-
value-adding work by firms in a supply
chain.
The basic idea is to design the overall supply
chain processes in a manner that identifies a
specific firm's responsibility and accountability
to perform each element of essential work in a
manner that maximizes overall results. 21

22. 3. Integrated Service Providers
Contemporary business are grounded in
functional specialization in which firms
developed the practice of outsourcing
work to businesses that are specialists in
the performance of specific functions.
The two traditional logistics service
providers are
Transportation and
 Warehousing specialist
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23. Transportation Specialists
 For-hire transportation industry consists of thousands of
carriers who specialize in product movement between
geographic locations.
 Over the years, a comprehensive carrier network has emerged
providing shippers a broad assortment of services, utilizing
all available forms or modes of transportation and related
technology
 Value is generated by a carrier's capability to provide shared
transportation services for multiple shippers. These carriers
provide these services by investing capital in transportation
equipment and operations or to engage the services of
specialized carriers. Naturally, a large number of firms
develop transportation solutions that combine benefits of
these alternatives.
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24. Warehousing specialist
Traditionally called public warehouses,
these firms provide product storage
supplemented with other specialized
services. Two significant benefits are gained
when shippers use public warehouses. First
is elimination of capital investment in
warehouse buildings. The second is the
ability to consolidate small shipments for
combined delivery with products of other
firms who use the same public warehouse.
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25. 1.6. Responsiveness
In business responsiveness refers to suppliers ability to reach
customers with their requirements at the required time
which has the ability to determine customers satisfaction
level.
The emerging information technology connectivity created the
potential for developing response based business models. To
elaborate the far-reaching implications of this major
development, it is useful to contrast traditional anticipatory
based business model to the emerging time-based business
model(Response based business model).
Anticipation is the feeling of looking forward
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26. A. Anticipatory-Based Business Model
This has been used since the industrial revolution as dominant
business model encouraging anticipation of customer
requirements and providing these expected deliveries at
expected time.
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Forecast
Buy
components
and materials
Manufacture
Warehouse Sell Deliver
L1
L2
L3 L4

27. ……….cont
Here it can be seen that the firms production is
based on forecast of how much demand will come
from the customers, the demanded materials will
be manufactured after having purchased the
inputs, the manufactured items are then stored
until to be sold for the customers/delivered.
In terms of logistics, whenever there is demand of
customers forecasted simultaneously the means of
moving these materials to the customers will be
forecasted. Therefore, the movement of such
materials is also forecasted in this model as it can
be seen from L1, L2, L3, L4
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28. B. Response-Based Business Model
Remember all the logistics in ABBM are
forecasted as per the forecast of the customers
demand and this could result in deviations from
the actual demand. This deviation can be
reduced through Response-Based Business
Model.
RBBM differs from that of ABBM based on supply
chain arrangements in timing. The RBBM seeks
to reduce or eliminate forecast reliance by joint
planning and rapid exchange of information
between supply chain participants.
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29. ………cont
Managers are increasingly sharing information to
improve both the speed and accuracy of supply
chain logistics and how logistics happens is not
by forecast rather through the information in
between the origins and the destinations of the
materials flow.
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Order Receipt
and/or Sell
Manufacture
Buy components
and materials
Deliver
L1
L
2