Logistics in Context

LOGISTICS IN CONTEXT:
Availability from both Physical and Operational Perspectives
Prepared by Dr Pieter J A Nagel
Logistics in Context Availability from both Physical and Operational Perspectives

CONTENTS
1
BACKGROUND AND PURPOSE .................................................................................... 5

1.1
PURPOSE AND SCOPE.................................................................................................. 5
1.2
DEFINITIONAL COMPLEXITIES ....................................................................................... 5
1.3
APPROACH .................................................................................................................. 6
LOGISTICS: DEFINITION AND CONTEXT..................................................................... 7

2.1
BACKGROUND AND HISTORICAL CONTEXT .................................................................... 7
2.2
WHAT IS LOGISTICS? ................................................................................................... 7
LOGISTICS: THE UNDERLYING CONCEPT ................................................................. 9

3.1
3.1.1
Business Logistics - Physical Availability ............................................................ 9
3.1.2
Engineering Logistics Operational Availability ................................................ 10
3.2
LOGISTICS IN A SYSTEMS CONTEXT ............................................................................ 10
3.2.1
Systems Levels of Logistics .............................................................................. 11
3.2.2
Context .............................................................................................................. 12
THE LOGISTICS FRAMEWORK ................................................................................... 14

4.1
DOMAINS WITHIN LOGISTICS....................................................................................... 14
4.1.1
Engineering Logistics ........................................................................................ 15
4.1.2
Business Logistics ............................................................................................. 15
4.2
LOGISTICS STRATEGY ................................................................................................ 16
4.3
LOGISTICS INTEGRATION PROCESSES ........................................................................ 18
4.3.1
Supply Chain Management ............................................................................... 19
4.3.2
Integrated Logistics Support .............................................................................. 20
4.3.3
The Relationship between ILS and SCM .......................................................... 20
4.4
DYNAMIC VALUE NETWORKS ...................................................................................... 21
4.4.1
Characteristics of Dynamic Value Networks ..................................................... 23
4.4.2
Critical Success Factors .................................................................................... 23
4.5
LOGISTICS - FOCUS ON AVAILABILITY............................................................................ 9
FUNCTIONAL PROCESSES VS. LOGISTICS OPERATIONS ............................................... 24
4.5.1
Acquisition, Procurement and Purchasing ........................................................ 24
4.5.2
Distribution or Physical Supply .......................................................................... 26
4.5.3
Maintenance and Maintenance Engineering ..................................................... 27
4.5.4
Disposition/Disposal .......................................................................................... 29
LOGISTICS IN A SECTORAL CONTEXT ..................................................................... 30

5.1
MILITARY/DEFENCE LOGISTICS .................................................................................. 31
5.2
RETAIL LOGISTICS ..................................................................................................... 32
5.3
HUMANITARIAN LOGISTICS ......................................................................................... 33
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5.4
SERVICES LOGISTICS ................................................................................................. 33
5.5
CONSUMER GOODS LOGISTICS .................................................................................. 34
5.5.1
Fast Moving Consumer Goods .......................................................................... 34
5.5.2
Consumer Packaged Goods ............................................................................. 34
5.5.3
Frozen Goods.................................................................................................... 34
5.5.4
Electronics Supply Chain .................................................................................. 34
5.5.5
Apparel Supply Chain........................................................................................ 34
5.5.6
Food Products Supply Chain............................................................................. 35
5.6
AUTOMOTIVE LOGISTICS ............................................................................................ 35
5.7
EVENT LOGISTICS ...................................................................................................... 35
5.8
CHEMICAL LOGISTICS ................................................................................................ 35
5.9
COLD CHAIN LOGISTICS ............................................................................................. 36
5.10
LOGISTICS SERVICE PROVIDERS ............................................................................. 36
LOGISTICS IN A CROSS SECTORAL CONTEXT ....................................................... 37
SUMMARY ..................................................................................................................... 38
REFERENCES ............................................................................................................... 39
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FIGURES
No table of figures entries found.
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1 BACKGROUND AND PURPOSE

Whilst the concept of logistics has been around for centuries, its emergence as a profession
has been a more recent phenomenon and its definition considerably varied across different
industry sectors. Any attempt to define Logistics opens a wide range of interpretations. The
debate on definitional orientation of logistics is unlikely to be concluded in real time, and
certification of Professional Logisticians will remain a point of debate in its own right. Any
attempt towards the development of education programs in Logistics and certification of
Professional Logisticians requires agreement on what exactly underlies this profession. In
addition, and a clear requirement exists to define a Common Body of Knowledge (CBK) 1 in
Logistics that will describe what knowledge a Logistics Professional has, or needs to have,
to be certified as a Professional Logistician. The Business Dictionary
(businessdictionary.com) defines a Common Body of Knowledge as the Domain of essential
information, mastery over which is required for success in a field or profession.
A Common Body of Logistics Knowledge (CBLK) provides a compilation of concepts,
processes, information, knowledge, and expertise for Logistics Professionals, comprising
several subject domains or knowledge areas, and forms the base for formal definition of the
CBLK for the Profession. However, before a CBLK can be developed, agreement on what
constitutes Logistics and a context on which to base the CBLK is required.
1.1 Purpose and Scope

The purpose of this document is to establish a context for the logistics profession from which
to further develop a CBLK. This document provides a reference for the development of
education and certification programs and for anyone interested in the profession of logistics.
It is also intended to provide a common lexicon within the profession and practice.
The purpose is not to define logistics but to establish an understanding of what constitutes
logistics. This document therefore provides a description of what Logistics is about, (See
Para 2.2 below) rather than defining it. The purpose is to establish a context for logistics
which covers all of the different aspects of Logistics and from which further work including a
body of knowledge can be developed. In this context, a Common Body of Knowledge for the
Logistics Profession will then form the base for setting standards for certification of Logistics
Professionals, and the development of education and training offerings. Given the wide
range of disciplines in the professional arena of Logistics, a defined and agreed context for
logistics will provide the broad framework for further definition and description.
Knowledge about logistics can be organised in many ways, this document has been broken
into the following sections:
Section 1 provides a background and purpose of the document

Section 2 discusses the definition and context for logistics
Section 3 provides a logistics concept
Section 4 provides a framework as a basic structure for understanding logistics and
describes the elements of the framework in detail.
Section 4 addresses logistics in a sectoral context
1.2 Definitional Complexities

There are numerous concepts and ideas that surround the profession of logistics, and there
has generally been a lack of alignment in approaches to describing and defining logistics. In
particular, the definitions and relationships of supply chain management, logistics, logistics
management, distribution, transport, and supply have often been interpreted in different
manners depending on the context surrounding their use.
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The basis for this document is that logistics is the overarching concept and the basis of a
profession. 2 A profession involves the application of specialised knowledge of a subject field
and can be seen as the basis of an occupation. Logistics should therefore be viewed as an
occupation involving multi-disciplinary aspects, processes, and functions. Supply chain
management on the other hand is an integrating function with primary responsibility for
linking major business functions and processes across companies. 3 Distribution, transport,
supply, warehousing, procurement, and the like are all disciplines that underpin the
profession of logistics. They are integrated through either logistics or supply chain
management. This will be discussed further in this document.
1.3 Approach
As logistics represents a wide and diverse range of activities supporting the availability of
goods, products, and services to the market (See "Logistics: Definition and Context" below),
it is appropriate to discuss the definition of Logistics in this document, partly as background
to the various domains of knowledge, but also in an attempt to provide a complete overview
of the various aspects associated with Logistics.
The approach adopted in this document is therefore to describe the knowledge within the
logistics profession based on a framework for logistics. The framework provides a basic
structure and context for understanding logistics and breaks down logistics into broad
contextual areas and a series of subsets and supporting subsets. This document also
addresses logistics from a systems and industry sectoral context.
The approach adopted in defining the framework and various domains, is one of consultation
with industry; review of logistics theory texts and documents; review of existing attempts
towards defining the Common Body of Logistics Knowledge; and reviewing by a panel of
logistics professionals (Panel listed below).
The logistics context set out in this document is an overview and is in no way a complete
body of knowledge. The authors give recognition to several attempts in this regard and this
submission is a contribution to the debate, rather than a conclusive alternative to existing
efforts toward defining a concept for logistics.
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2 LOGISTICS: DEFINITION AND CONTEXT

2.1 Background and Historical Context
Research into the original meaning of the word "Logistics reveals that the word appears to
have been derived from both the Greek word Logistikos and the French word Logistique. 4 .
Logistikos is rooted in the concept of logic and is translated as the ability to calculate. 5 In
its Latin version, Logisticus, means of calculation 6 . This led to the word "Logic" in its
English use, and underlies the origins of what today is known as a Mathematician.
Logistique, the French word, is understood to have been influenced by the French loger
meaning to quarter (or lodge) soldiers. The marchal des logis was the administrative
officer responsible for encamping and quartering troops. With an increasing variety of
weapons and ammunition, warfare became more advanced. As a result the marchal des
logis duties were expanded to include the stocking of supply depots. 7 Hence, the
combination of logic, calculation, and quartering soldiers appears to have yielded the word.
Logistics as a human activity is centuries old, 8 however its use was restricted predominantly
to within the military context. While the business process of physical distribution had been
studied during the early part of the 19th century, it was the combination of World War II
military logistics experience and the concept of marketing in the 1950 that led to the
development of logistics management. Logistics as a business concept therefore only really
evolved only in the 1950s. This was mainly due to the increasing complexity of supplying
business with materials and distributing products to an increasingly globalised customer
base and the realisation that linking resource time and space utility to total cost analysis
meant that logistics management could significantly contribute to a firms competitive
advantage. 9 It required experts in the field, called Logisticians. From the business context,
the term Business Logistics emerged.
Along similar lines, the concept of logistics in support of industrial or durable products, which
have long usable lives, usually referred to as integrated logistics support, developed in the
military but has also developed as a concept beyond the military by the Society of Logistics
Engineers. 10 With the increasing sophistication and complexity of engineering systems and
equipment, the late 60s, early 70s, saw an increased development of Logistics as an
engineering concept. The area of Engineering Logistics has evolved to become a significant
dimension of the Logistics Profession and today forms an integral part of systems design,
development, deployment, and decommissioning.
To a certain extent, the two dimensions of the Logistics profession have, evolved as
separate areas of study. Only relatively recently these were recognised as fundamental to a
fully integrated approach to Logistics.
Particularly in the Australian context, the focus on Logistics seems to have been on the
physical availability of products i.e. Materials Management, Physical Distribution, Business
Logistics and Supply Chain Management. The area of Engineering Logistics, which focuses
on operational availability, has tended to be neglected.
2.2 What is Logistics?

The Oxford English dictionary defines Logistics as The branch of military science having to
do with procuring, maintaining, and transporting material, personnel, and facilities. It should
be safe to say that Logistics has moved far beyond a branch of Military science.
Another dictionary definition is "The time related positioning of resources." As such, logistics
is commonly seen as a branch of engineering, which creates "people systems" rather than
"machine systems". Logistics has indeed also moved far beyond engineering. 11
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The definition used in many texts associated with business logistics uses a definition from
the then Council of Logistics Management (now the Council of Supply Chain Management
Professionals):
Logistics is the process of planning, implementing, and controlling the efficient. Cost
effective flow and storage of raw materials, in process inventory, finished goods and related
information from the point of origin to the point of consumption for the purpose of conforming
to customer requirements. 12
Whilst this provides a sound definition for logistics, it gives the impression that logistics is
only concerned with the movement of physical goods and that the logistician is only
concerned with the flow of goods and services to and from his or her firm. It also excludes
the maintenance activity included in the military or engineer concept of logistics.
The Council of Supply Chain Management Professionals does not provide a definition for
logistics but rather define Logistics management as:
That part of the supply chain management that plans, implements, and controls the efficient
forward and reverse flow and storage and goods of, services and related information
between the point of origin and the point of consumption in order to meet customer
requirements. 13
While this definition expands the concept from merely physical goods, it does not address
the concept of providing support to products with long lead times and focuses on logistics
management as a sub-set of supply chain management without addressing what logistics
itself is about.
Another definition of logistics by the Society of Logistics Engineers is:
the area of support management used throughout the life of the product or system to
efficiently utilise resources assuring the adequate consideration of logistics elements during
all phases of the life cycle so that timely influence on the system assures an effective
approach to resource expenditures. 14
Any definition of logistics will invariably fail to give a complete picture of what logistics is,
and what is required to be effective. 15 In order to understand what constitutes the
overarching concept of logistics it is worth considering what the outcome or mission of
logistics is. Logistics is primarily concerned with the availability of goods, products and
services to the market; integrating all concepts and processes towards achieving availability
at agreed service levels. The market concept in this context could imply a market in the
commercial sense, an event, operations environments, or even a battlefield. Within these
processes, resources are applied to achieve that availability and therefore it would be
appropriate to states that:
Logistics is the integrated, time related, positioning of resources to ensure the availability of
goods, services, information, and products to the market.
Logistics is the integrated, time related, positioning of resources to ensure

the availability of goods, services, information, and products to the market.
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3 LOGISTICS: THE UNDERLYING CONCEPT

Logistics cannot be defined as just a function, task, process or even a system but; as
suggested by the US Society of Logisticians, logistics can be described as a broad field of
endeavour of many interdisciplinary activities. These activities constitute the art and science
of logistics. Furthermore, the managerial, engineering, and technical activities involved do
not constitute the art and science of logistics by themselves but only when they are applied
together to a composite of particular functions. 16
In order to try to describe and understand what constitutes logistics, there is a need to break
it down into a set of sub elements. To do this, while ensuring that the overall concept of
logistics is maintained, a contextual framework has been developed which provides a basic
structure for understanding. This contextual framework is based on the definition provided in
section 2.2, which highlights that the logistics outcome is all about achieving availability.
However, it takes into account that the focus of this availability has two complementary but
different outcomes operational availability or physical availability and that, depending on
the outcome required the manner in which logistics activities are integrated and managed
will be different. It also takes into account the fact that that there is a different focus for
logistics at differing levels within an organisation or logistics system and this can be viewed
within three broad levels within a systems construct - the conceptual or strategic level, the
functional level and the transactional level.
3.1 Logistics - Focus on Availability

As outlined above, logistics is predominantly about availability. The supply of goods and
products to customers through inbound and outbound transport, storage, distribution
capability, including warehousing of raw materials, semi-finished/work-in-process goods and
finished goods and their associated systems are all elements aimed at achieving availability
of products, services, and equipment. Managing all these activities efficiently and effectively
for an organisation is the essence of logistics. However, products may not remain in the right
condition, or retain their original functionality over time. Therefore, products may have
physical availability but not retain their operational availability. As systems become more
complex, they demand availably of support, maintenance, and related activities. In this
context, operational availability becomes the focus. Availability can also refer to people and
the transport of people is a component of logistics.
Logistics therefore encompasses a range of activities or functional areas that from a total
systems availability point of view can be broken into two major domains associated with
providing physical or operational availability. Physical availability is the subject of Business
Logistics whereas Operational availably is the subject of Logistics Engineering.
3.1.1 Business Logistics - Physical Availability

Business logistics is concerned with the goods, products, and/or services being physically
available the right goods or services to the right place, at the right time, and in the desired
condition and with accurate documentation. 17 In its simplest interpretation, Business
Logistics optimises a steady flow of material through a network of transport links and storage
nodes. There is another aspect of physical availability, which is the co-ordination of a
sequence of resources to carry out some project.
Various performance measures are used to examine the efficiency of an organisation's
business logistics; however, these are typically transaction-based measures such as end
customer fill rate and cartons per hour. More strategic measures of effectiveness are less
common, such as Total Cost of Ownership (TCO) and the measurement of delivery
capability, designated as DIFOTA Delivery in Full, On Time, with Accuracy.
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Logistics is too often considered as a cost-centre service activity rather than a value adding
strategic activity based on availability, improved external relations, and customer
satisfaction. The end customer can include another process or work centre inside a
manufacturing facility, a warehouse where items are stocked, or the final customer who will
use the product. 18
Another popular derivative of the logistic term, which has appeared since the early 1980s, is
the supply chain. Each item and service entering and leaving an organisation has its supply
chain; therefore, an effective chaining of the supply and distribution sides of an organisation
is required. It is based on the premise that the supply and distribution activities, if integrated
with the internal conversion activities of the organisation, can result in improved profitability.
The measurement requirement focussed on each internal activity is being replaced ideas of
total cost throughout the whole chain, resulting in better profitability for the chain members
and lower costs for the products.
Decisions concerning the placement and amount of inventory at each responsible stage of
supply chains are the main activity. These decisions affect the working of integrated logistics
functions including acquisition of materials, transport, distribution, warehousing, and the
organising and planning of these activities.
3.1.2 Engineering Logistics Operational Availability

Logistics Engineering is concerned with the availability of product systems, equipment, and
maintenance and support capability. This is concerned with the overall cost effective
operation throughout the entire lifecycle, including decommissioning (Phase out) at the end
of the lifecycle. Environmental considerations regarding product phase out and
decommissioning are involved 19 .
"Engineering Logistics" incorporates an important aspect of system engineering, which
includes reliability engineering. It is the science and process whereby reliability,
maintainability, and availability are designed into products or systems. These designs are
very specifically developed as derivative of a Logistics Support Strategy. A logistics engineer
understands that total system reliability can be no greater than the least reliable subsystem
or component, therefore must consider the reliability of all sub-components or sub systems,
and modify system design accordingly. 20
Logistics Engineers work with mathematical models that consider elements such as Mean
Time between Failures (MTBF), Mean Time to Failure (MTTF), Mean Time to Repair
(MTTR), Failure Mode, Effects, and Criticality Analysis (FMECA), statistical distributions, and
queuing theory as examples. Logistics Engineering is a science that considers tradeoffs in
component/system design, repair capability, training, spare parts inventory, demand history,
storage and distribution points, transportation methods, etc., to ensure the "thing" is where
it's needed, when it's needed and operating the way it's needed; all at an acceptable cost. 21
3.2 Logistics in a Systems Context

Within the above definitional context and views on availability of goods, products and/or
services in the market, logistics can be implemented on three levels in an organisation as
shown at Figure 1. In essence, enterprises can use their Logistics and Supply Chain
Operations, Systems and Financials to achieve three things:
Strategically, to achieve a Competitive Advantage within a particular Market Sector.

Functionally, to provide the highest possible level of customer service.
Operationally, to achieve the minimum cost, within the set Customer Service Levels
Page 10
Logistics Philospohy1
3.2.1
Systems Levels of Logistics
Applying on the principles of systems theory, Logistics can be defined on three levels:
3.2.1.1 Strategic Logistics
Logistics forms a critical component of the overall corporate strategy of any organisation. Its
particular contribution to the overall strategy should result in the Competitive Availability of
the organisations' goods, products, information, and services.
The Logistics strategy typically includes elements such as:
Strategic network optimization, including the number, location and size of

warehouses, distribution centres and facilities
Strategic relationships with suppliers, distributors and customers
Creating communication channels for critical information and operational
improvements such as cross-docking, direct shipping and logistics services
Product design co-ordination, so that new and existing products can be integrated
into the supply chain, load management
Information Technology infrastructure, to support supply chain operations
Where to make and what to make or buy decisions
Aligning overall organisational strategy with supply strategy 22
3.2.1.2 The Functional Level - Logistics Processes and Integration

Logistics at the functional level is predominantly concerned with the integration of functions
and establishing processes to enable the Logistics Strategy. From a physical availability
point of view, enabling the Logistics Strategy has particular implications for Supply Chains or
Supply Networks associated with the strategic availability of an organisation's goods,
products, and/or services in its particular markets. The Supply Chain design is a direct
derivative of the Logistics Strategy. Supply Chain Management is therefore done against a
particular Supply Chain design.
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From an operational availability point of view, the integration of various elements towards
enabling a support strategy is referred to as Integrated Logistics Support (ILS). Without
debating the conceptual analogy between SCM and ILS, is suffices to say that ILS has
particular implications for supply lines for the strategic availability of support and
maintenance of an organisations systems and equipment. In the context here, ILS will
enable the Logistics Support Strategy of systems and equipment. 23
Supply Chain Management (the management of internal and external relationships) and
Integrated Logistics Support therefore become the primary enablers of the Logistics
Strategy.
3.2.1.3 The Transitional Level - Logistics Operations
Logistics Operations, commonly referred to as Logistics, are the physical elements that are
engaged to execute the Supply Chain or the integrated logistics support plan. These
physical Logistics Operations include Procurement, Transport, Warehousing, Port
Operations, Customs, maintenance, etc. It is important to note that efficient logistics
operations are obtained when these operations are engaged against the design parameters
of the supply chain or the logistics support plan.
3.2.2 Context
This systems/organisational view of Logistics are set out in the table below:
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TABLE: Logistics in a Systems Context

The Strategic Level
Logistics (Support) Strategy: Competitive Availability
Physical Availability
Operational Availability
Strategically competing in the market

with a competitive level of physical
availability of products , goods and/or
services
Strategically competing in the market

with a competitive level of operational
availability of the systems, equipment
and operations
The Functional Level

Enabling the Logistics Strategy through integrated Processes
Supply Chain Management
Integrated Logistics Support
Supply Chain management is the

integrated management of the
operations of supply chains with the
purpose to satisfy customer
requirements, (that is Availability) as
efficiently and effectively as possible
Integrated Logistics Support (ILS) is the

integrated design process that will enable
the competitive availability set out in the
Logistics Support Strategy.
The Transactional (Operational) Level

Executing the Logistics process through cost efficient Logistics Operations
Subject: Inventory, Products, Goods,

Equipment, Services
Subject: Parts, Components,

Maintenance Operations, training,
Logistics Movement Operations?

Distribution and Physical supply?
Logistics Support Operations
Procurement, Transportation,
Warehousing, Support Operations (i.e.
Customs, Stevedoring, etc.)
Procurement, Maintenance Operations,

Parts and Components, Transportation,
Technical Manuals/Users Guides,
training, packaging, handling, storage
Maintenance?
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4 THE LOGISTICS FRAMEWORK

Within the above context, a framework for logistics, shown diagrammatically at Figure ? This
framework is based on the overall outcome of logistics being competitive availability which
will be predominantly focussed on either operational availability and thus have a greater
emphasis on engineering logistics, or on physical availability with an emphasis on business
logistics.
This availability (both physical and operational) is enabled through the logistics integrating
processes of supply chain management and integrated logistics support. These processes
are executed through logistics operations. The supporting disciplines of financial
management, customer and supplier relationship management, performance management,
information management, inventory management, systems engineering, contract
management etc provide management within an organisational context.
The different aspects of this framework are discussed in more detail in the following subsections.
Engineering
Logistics
Business
Logistics
AVAILABILITY
Operational
availability
Physical
availability
Logistics
Operational
availability
isenabled
through
Physical
availability
isenabled
through
Strategy
FunctionalLevel
Integrated
Logistics
Support
ILSis
executed
through
LogisticsProcesses
SupplyChain
Management
TransactionalLevel
SCMisis
executed
through
LogisticsOperations
Logisticssupport
operations
maintenance
Supplyand
Distribution
ManagementAspects Planning,Performancemanagement,inventory
management,systemsengineering,supplychainnetworkdesign,
informationmanagement
Figure 2 The Logistics Framework
4.1 Domains within Logistics

Engineering Logistics and Business Logistics are not exclusive domains but rather differ in
terms of their timeframes, objectives, and measures of success. Each will impact on the
other dependant on the product, service, or business area.
The objectives of Engineering Logistics are focussed on designing availability into logistics
systems whereas business logistics makes a number of assumptions regarding availability of
enabling inputs (such as assuming a fridge or truck will be operationally available etc) and
focuses on the physical availability of inputs and outputs (i.e. raw material, components and
products). The objectives, timeframes, and measures of success in general terms are as
follows:
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4.1.1 Engineering Logistics
Objectives design availability into products, equipment and services through

Timeframe product/equipment/service life cycle
Measure of success operational availability at appropriate cost relevant to
corporate strategy
4.1.2 Business Logistics
Objectives enabling execution for availability

Timeframe product/equipment/service life cycle
Measure of success physical availability at appropriate cost relevant to corporate
strategy
In essence, Engineering Logistics designs the sustainability and support of a product for its
life span and establishes a number of parameters or substantiates assumptions, whereas
business logistics operates within the system designed or established, and is executed
based on assumptions on the operational availability of a number of elements of the supply
chain. Figure? shows aspects of the life cycle of a car and the relative focus of business and
engineering logistics across the life cycle. Figure 2 does the same for a tub of butter.
LIFECYCLEOFACAR
Design
Designcar
Designsupport:
Spareparts
Fuel
Techmanuals
Maintenance
Distribution
Packaging
manufacture
Manufacturecar
Manufacture
spareparts
SCdeliversparts,
componentsetc
Preparetech
manuals
Useofcar
SCdeliverscarto
dealers
SCdeliversfuelto
petrolstation
SCdeliverspartsto
repairers/maintainers
Maintenance
conducted
Technicalinformation
updated
Cartransported
between
retailers/users
Disposal
Cartransported
todisposal
agency
Cardisposed
SomeParts
distributed on
sold,scrapetc
Figure 3 The life cycle of a car
Page 15
LIFECYCLEOFATUBOFBUTTER
Design
Manufacture
Designbutter
types
Designsupport:
Distribution
Packaging
Storage
mediums(e.g
fridges)
Design
Designbutter
types
Designsupport:
Distribution
Packaging
Storage
mediums(e.g
fridges)
Manufacture
butter
Packagebutter
Inputsdelivered
tomanufacturer
Manufacture
Manufacture
butter
Packagebutter
Inputsdelivered
tomanufacturer
Business
Logistics
Distribute
Butterdeliveredfrom
manufacturertoDCsand
retailers
Fridgesandtransport
maintained
Distribute
Butterdeliveredfrom
manufacturertoDCsand
retailers
Fridgesandtransport
maintained
Consume
Reverselogistics
ofcontainers
Consume
Reverselogistics
ofcontainers
Engineering
Logistics
Figure 4 The life cycle of butter
4.2 Logistics Strategy

The logistics strategy of an organisation must create and sustain a competitive advantage
regarding the organisations products, equipment, goods, services, and information. The
logistics strategy must support the organisation to be strategically competitive and must
therefore support the corporate strategy. The logistics strategy will therefore identify the key
Page 16

elements and focus for logistics and may vary for different product types. The key elements
may include:
Supply/procurement strategy
Inventory strategy suppliers, storage
Location strategy
Transport strategy
Customer relationships and service level strategy
Maintenance strategy
If physical availability is the predominant focus, there will be more emphasis on business
logistics aspects such as distribution strategies i.e. inventory, transport and location of
product in relation to the customer ; whereas a high operational availability outcome will
require a focus on the engineering logistics such as the maintenance strategy and the
reliability of the products/equipment and components. Where physical and operational
availability are equally important, the strategy will need to ensure an effective balance.
The logistics effort will therefore be focussed according to the logistics strategy. As systems,
complexity of the particular product increases, the focus, and effort is more likely to be on
operational availability and thus engineering logistics activities. However, business logistics
aspects and management of the supply chain will still be important in particular for the
physical availability of repair parts etc. Figure x provides a graphic representation of this
concept.
Figure ? Logistics Effort across the logistics domains

For example, for a major weapon system such as a fighter jet, the strategy will try to design
in extremely high reliability in order to minimise breakdowns with a very high focus on
preventative and routine maintenance. The maintenance strategy will balance availability of
repair parts and components with location and levels of maintenance support. This should
allow demand to be predictive and therefore routine. Physical supply chain decisions are
Page 17

therefore likely to be based on having replacement components available within specified
service levels with a cyclic distribution pipeline.
For a grocery product such as breakfast cereal, demand is likely to fluctuate and physical
availability of the product on the shelf to meet this demand will drive the logistics strategy.
The focus will be very much on physical availability at the retail outlet and consequently
there must be a very quick and responsive supply chain. Strategy decisions will therefore be
focussed on location and levels of inventory and availability of transport and very little, if any
focus on engineering aspects other than maintenance of transport fleets and logistics
equipment.
A product such as a computer will fall somewhere in between these two examples. Physical
availability will be important but so will operational availability of the product and therefore
supply chain and maintenance decisions, particularly provision of technical support will need
to link closely to the organisation and product strategy. The balance of the focus is likely to
change in relation to the product placement and relate to the cost of the product. For
example, a certain portion of market will be willing to pay a premium for a high level of
availability through long battery life and quick and reliable technical support, whereas at the
lower end of the market availability on the shelf and cost will drive their buying decisions.
Whilst physical and operation availability are the two key aspects of the logistics strategy
and there may be a much greater focus on one or the other to achieve competitive
availability within the specific market sector, resource availability will be the third aspect that
must be considered within the overall logistics strategy. Resource availability will be a
supporting element to achieving physical and operational availability.
Competitive
Availability
Resource availability of
people, transport capacity,
infrastructure, and
information
4.3 Logistics Integration Processes

Logistics integration processes incorporate the various Logistics operations against
designed process integration requirements, the latter based on a Logistics Strategy as
discussed above. In the Business Logistics context, reference is made to competitive
advantage and finds its integration predominantly through the Supply Chain. In the
engineering context, reference is made to strategic support and finds its integration
predominantly through Integrated Logistics Support. Each of these processes Supply Chain
Management (SCM) and Integrated Logistics Support (ILS), rely on a number of
elements, which enable integration. Commonly, these are referred to as integration
enablers. 24
Page 18
4.3.1 Supply Chain Management

Consultant Keith Oliver, of strategy consulting firm Booz Allen Hamilton in 1982, developed
the term Supply Chain Management.
A Supply Chain spans all movement and storage of raw materials, work-in-process inventory
and finished goods from point-of-origin to point-of-consumption. A Supply Chain exists for
each item within and associated with a product, therefore a product can have multiple supply
chains. To enable the availability of a product, a network of logistics service providers (LSP)
can provide multiple services to each supply chain. In total, this is the Supply Chain Network
for an organisation. 25
Supply Chain Management (SCM) is the process of planning, implementing, and controlling
the operations of supply chains with the purpose to satisfy customer requirements, (that is
Availability) as efficiently and effectively as possible. As supply chains involve the
participation of multiple independent organisations, the management of supply chains is
mainly concerned with the management of internal and external relationships. 26
The definition put forward by the .Council for Supply Chain Professionals is that Supply
Chain Management encompasses the planning and management of all activities involved in
sourcing, procurement, conversion, and logistics management activities. Importantly, it also
includes co-ordination and collaboration with channel parties, which can be suppliers,
intermediaries, logistics service providers, and customers. In essence, Supply Chain
Management integrates supply and demand management within and across companies. 27
Supply Chain Event Management (SCEM) is a consideration of all possible occurring events
and factors that can cause a disruption in a supply chain. With SCEM, possible scenarios
can be created and solutions can be planned. 28
The supply chain then represents a dynamic network of physical value add components that
will enable physical availability and therefore Supply Chain Management integrates supply
and demand within and across the components of the Supply Chain. Supply Chain
Management must address the following challenges:
Distribution Network Configuration - The number and location of suppliers; the

number and location of production facilities distribution centres and warehouses
(owned and contracted), plus the number and location of customer receiving
locations
Distribution Strategy - Centralised versus decentralized, direct shipment, Cross
docking, pull or push strategies, use of logistics service providers (LSP)
Information - Integrate systems and processes through the supply chain to share
data and information, including demand signals, forecasts, inventory and transport
Inventory Management - Quantity and location of inventory including raw component
and packaging materials, work-in-process and finished goods
The Supply Chain integration enablers, also referred to as the elements of Supply
Chain Management, include the following:
Daily production and distribution planning, including all nodes in the supply chain
Production scheduling for each manufacturing facility in the supply chains
Demand planning and forecasting, co-ordinating the demand forecast of all
customers and sharing the forecast with all suppliers.
Sourcing planning, including current inventory and forecast demand, in collaboration
with suppliers
Inbound operations, including transport from suppliers and receiving inventory
Production operations, including the consumption of materials and flow of finished
goods.
Outbound operations, including all fulfilment activities and transport to customers
Page 19
Return of goods (reverse logistics)

Order promising, accounting for all constraints in the supply chain, including
suppliers, manufacturing facilities, distribution centres and other customers
Performance tracking of all activities
4.3.2 Integrated Logistics Support

Integrated logistics support (ILS) is the management of the technical logistic disciplines that
plan and develop Logistics Support Requirements to ensure System product Quality in terms
of Reliability, Availability, Maintainability, and Testability. It is the disciplined and unified
management of all activities necessary to produce a supportable system design and a
reasonable support capability to achieve a pre-determined set of measurable objectives
within an acceptable cost of ownership. 29
ILS was originally developed by the military as the planning and execution of supporting the
combat systems that were developed or acquired. More recently, ILS is being used by nondefence organisations to plan how products they develop will be supported over their life
cycle. 30 The integrated logistics support process ensures the successful support of a product
throughout its life. From design engineering to manufacturing and materials, packaging and
marketing, and distribution and disposition, ILS integrates every phase of the product
support process. 31
ILS is in essence the integrating process that designs supportability and sustainability of
products throughout their life, including designing the supply chain management aspects of
that support. The ILS process sets the assumptions from which supply chain management
decisions are based.
The Logistics Support integration enablers, also referred to as the elements of Integrated
Logistics Support, include the following: 32
Maintenance and Support Planning

Supply Support
Maintenance and Support Personnel
Training and Training Support
Test, Measurement, Handling and Support Equipment
Packaging, Handing, Storage Warehousing and Transportation
Maintenance Facilities
4.3.3 The Relationship between ILS and SCM

As described in section 3.3, business logistics and engineering logistics are inter-related but
differ in the manner in which they impact on competitive availability in regards to their
objectives, timelines, and measures of success. As such, the integration processes
described above are not mutually exclusive and will each impact on the other. ILS will
provide design parameters within which SCM will need to operate and ILS will need to be
adjusted as supply chain networks alter. Figures ? and? Show indicative examples of where
ILS and SCM inter-relate
Page 20
Insert car example ??
SupplyChain Butter
Assumesavailabilityoffridge/refrigeratedtrucks/packaging
manufacture
transport
transport
retailer
DC
MainILSelements:
Packaging
Coldstorage e.g
fridgeavailabilityat
physicalnodes
Refrigerated
transport
Fridges
FridgeSC
Fridge
manufacture
Transport/
customer
pickup
Customer
Refrigerated
trucks
PartsSC
PartsSC
FridgeParts
Rawmaterials/
componentSC
Rawmaterials/
componentSC
4.4 Dynamic Value Networks

In order to achieve the desired logistics outcome, organisations work with a logistics system
made up of sub systems and networks. Logistics systems consist of personnel;
organisations; equipment; facilities and infrastructure; training and education; and processes
and procedures. These elements interact or are integrated to support the outcomes of a
specific business or businesses in accordance with the logistics strategy. A logistics system
will be tailored in size, structure, procedures, and relationships to meet the specific
organisation strategy and context. 33
This is done within a supply chain and integrated logistics support construct. Logistics
processes are successfully brought together in a dynamic manner to create and deliver
value to meet the competitive availability identified in the corporate and logistics strategies.
The logistics system can therefore be viewed as a dynamic network of business
relationships, multi-organisational processes and management activities and disciplines that
collectively create and deliver value (information, goods, products, and services). The
underpinning concept is that of integration and collaboration as follows:
Integrate multi-organisational processes including customer relationship

management, supply chain management, supplier relationship management,
services procurement and management.
Dynamic interaction between disciplines
Integrate management processes including supply chain management and ILS
Collaborative risk management
Optimise balance between delivery performance, supply chain structure,
maintenance and technical support arrangements, market access
Diagram ? depicts a dynamic value network as it relates to the car example.
Page 21
leather
springs
material
seats
Designed
formarket
Manufacture
ValueAdd
Seatbelts
ValueAdd
ValueAdd
rubber
CAR
console
alloy
lights
tyres
Operate
ValueAdd
Instrument
panel
wheels
Designed
forsupport
Metalclips
ValueAdd
parts
ValueAdd
fuel
ValueAdd
PhaseOut
/Disposal
Servicing/
repair
refinery
Tech
manuals
training
DynamicValueChain:
Networked
Nonstatic
Eachnodeisdesignedto
addvalue(form,place,
functionortime)
Technology and information integration are critical to achieving an optimised dynamic value
network and there needs to be a focus on culture, leadership, and infrastructure. The
networks will be vulnerable and be impacted on by external and internal factors as shown in
Figure ?
External
INTERNAL & EXTERNAL

VULNERABILITY DRIVERS
Demand
Environmental
Supply
Internal
Vulnerability
Control
Process
Contingency
/ Mitigation
Capability
KNOWHOWTOMAKETHINGSHAPPEN!
www.vu.edu.au/ilscm
Page 22
4.4.1 Characteristics of Dynamic Value Networks

The characteristics of DVN are that they are networked, dynamic and focussed on value
added activities as detailed below.
4.4.1.1 Logistics as a Network
Whilst there are many sub-elements and changing inter-relationships, there are three
fundamental sub networks within any logistics system.
A physical network which includes all the logistics nodes (warehouses, terminals,
maintenance or service centres), the physical links (transport infrastructure and
assets), procedures and the physical resources (people, equipment, assets) that
operate the system.
An information or virtual network The information network includes the passage of
information via communications links to the various people/organisations within the
network.
A control network, which includes all the planning, decision-making, and
management arrangements (including contracts, supplier customer agreements etc)
to achieve the outputs and outcomes.
4.4.1.2 Dynamic Networks

Because market behaviours, economic factors, competitive forces and globalisation are
dynamic; logistics networks must be non-static in nature and must interact in a dynamic
manner. Elements may only come together periodically or on a one-off occasion to achieve
an outcome, and are constantly changing. Logistics nodes are established for only as long
as they are required and relationships, information flows, and physical routing will be in a
constant state of change. If organisations are not postured to deal with this dynamism then
they will risk their ability to successfully create and maintain their competitive advantage.
4.4.1.3 Value Add
The key to achieving availability is to postpone value-adding activities as far as is practicable
and to eliminate any activity that does not add value. Each node within a network i.e. a
physical, information, or control node, must be designed to add value. From a physical
perspective the value add could be form, place, function or time. Form or function is
delivered through the manufacturing process, place by transport and time through
warehousing.
From an information perspective, value is added through information systems and
communication links to provide the right information at the right place and time to enable
decisions and actions. For example,
Value from a control perspective is about ensuring decision-making is done at the right time
and place by the most appropriate person/people to ensure availability. Control may come
from a hierarchical command and control structure of ownership or through having the ability
to direct actions and marshal resources.
4.4.2 Critical Success Factors

Factors critical to success will therefore be:
4.4.2.1 Visibility
Successful integration and logistics optimisation requires visibility of information. Visibility of
the entire network is required including all the subjects and operational elements of the
logistics systems will enable a predictive and responsive as well as the and the ability to
Page 23

know what, when and where things are an ability to view performance attributes with
predictive information available.
4.4.2.2 Velocity
Velocity of throughput with shorter time to market and shorter lead times will ensure velocity
of response to customer demand.
4.4.2.3 Capacity
Capacity of the network to meet demand and to expand or contract to meet changing
demand patterns
4.4.2.4 Control
Management and control of modern logistics systems are based on many distributed
hierarchically organised levels. Decision makers throughout the system and at the varying
levels have different interests and goals. They perceive things in different ways and many
decisions are based on subjective perceptions or subjectively evaluated parameters. Control
must therefore be vested at appropriate points within the network to enable decision-making
that enables cross-organisational outcomes whilst providing for individual organisations to
individually optimise their outcomes.
4.4.2.5 Agility
The ability to sense and respond to changing demand pattern in a timely manner will be
enabled by effective visibility, velocity, capacity and control and ensure the competitive
availability can be achieved to meet customer requirements.
4.4.2.6 Security
As supply chains and support networks become more globalised, distributed, complex and in
many cases longer, they become more vulnerable to interdiction, sabotage, and theft.
Security and survivability must therefore be built into supply and support networks.
4.5 Functional Processes vs. Logistics Operations

As described in section 3.5, supply chain management and integrated logistics support are
the processes, which integrate logistics operations and activities to achieve the logistics
strategy. To do this effectively, they must operate as dynamic value networks. These
activities are conducted within both logistics domains in various manners and to various
degrees to achieve operational and physical availability. In order to understand the link
between the integration processes and the physical activities associated with logistics
operations, logistics is often broken down or managed within functional groupings as follows:
Acquisition and Procurement

Distribution or Physical Supply
Maintenance and Maintenance Engineering
Disposition/Disposal
The logistics operations that occur at the functional level are subsets of these processes and
are described below within the context of the functional processes.
4.5.1 Acquisition, Procurement and Purchasing

The terms acquisition, procurement and purchasing, are often used interchangeably. All
terms relate to the process of procuring materials, supplies, and services. Procurement can
be described as the acquisition of goods and/or services at the best possible total cost of
ownership, in the right quantity and quality, at the right time, in the right place and from the
Page 24

right source for the direct benefit or use of corporations or individuals, generally via a
contract. Acquisition is a much wider concept than procurement, covering the whole life
34
cycle of acquired systems. Whereas acquisition and procurement is the function or process
associated with acquiring purchased inputs to support the overall business need, purchasing
35
relates specifically to the buying of the inputs and is therefore a subset of procurement.
The US Defence Acquisition University (DAU) defines procurement as the act of buying
goods and services for the government. It defines acquisition as the conceptualization,
initiation, design, development, test, contracting, production, deployment, Logistics Support
(LS), modification, and disposal of weapons and other systems, supplies, or services
(including construction) to satisfy DoD needs, intended for use in or in support of military
36
missions. The Australian Defence Force describes acquisition as the procurement or
purchase of weapons, equipment, facilities, ordnance, and commodities such as clothing,
fuel, and repair parts. Acquisition can be as complex as the capital acquisition of major
weapon systems, or as simple as the procurement of off the shelf goods and standard
37
services.
Acquiring complex systems require a level of detail in the procurement process that go
beyond the standard commercial procurement processes. It has a much higher reliance on
ILS and includes the full acquisition of Support Logistics.
The area of procurement and acquisition can therefore be broken down into three main
categories:
4.5.1.1 Strategic Procurement
Strategic procurement involves the acquisition of items that are linked to the corporate level
decision-making and that impact on an organisations strategy. This level procurement will
require a high-level business case and be guided by corporate policy decisions. This entails
the full acquisition concept and has a large focus on engineering logistics.
4.5.1.2 Complex Procurement
Complex procurement involves purchases where there is more than minimal risk involved,
the value of the item is relatively high, and value for money decisions include whole of life
costing and supplier support considerations. There is likely to be more complex payment
mechanisms, more complex procurement processes (e.g. a staged procurement process,
non-standard terms and conditions, detailed evaluation process and may require specialist
advice (e.g. legal, technical, contractual or financial). Complex procurement may be a major
component of supply chain management or ILS plans.
4.5.1.3 Simple Procurement
Simple procurement usually involves off the shelf items where the level of risk is minimal,
standard terms and conditions are used, the value is relatively low and the goods and
services do not require any development. It can also include repeat purchasing.
There are a number of activities that are included in the procurement process regardless of
the complexity of the procurement decision. Even simple procurement will involve identifying
trade offs on things such as cost and quality, or buying fewer or more items. The timing can
be critical. Each supplier may have different attributes, capabilities, and values. The total
cost of acquisition should be considered alongside the total lifetime cost, not just the
purchase price. The physical handling of any products should be considered, with links to
methods of transport, logistics, and warehousing. There are numerous different procurement
and purchasing methods and relationships between buyers and sellers. These range from
one-off purchases through to systems contracts and partnering arrangements. However,
regardless of the type or method, procurement has the following major subsets 38 :
Page 25
Needs identification and analysis this involves determining the specification in

terms of required quantity and quality and may involve detailed business case
development for more complex purchases.
Supplier Selection This will involve market and industry analysis and could involve
a staged process of going to the market seeking Request for Interest to narrow down
the filed and/or request for proposal/quotes. The process will include supplier
evaluation.
Contracting this will include developing contracts, preparing and conducting
negotiations with the supplier/s and awarding the contract. There is also ongoing
contract management, which is covered, in Section ?
Ordering this is the process of placing an order or orders on chosen
supplier/contractor. This process may include detailed arrangements and could
Evaluation This involves evaluation of the purchase and the supplier and can
involve follow up activities such as settling claims and identifying concerns. It can
involve contract change and re-negotiation of contracts or changes to suppliers,
supply arrangements or products and services.
4.5.2 Distribution or Physical Supply

In its traditional business context, this functional area represents Physical Distribution, whilst
in a systems context it represents Physical Supply. The distribution or physical supply
system involves the flow of goods and services from point of origin to point of consumption.
This involves the movement and physical storage of goods, equipment, and people. The
major elements of distribution are transport and storage or warehousing. These are separate
but intimately connected as together they influence the time and space utility of products and
services. Distribution management is focussed on optimising this physical availability
outcome through the effective integration of transport and warehousing and the overall
design of the nodes and modes.
4.5.2.1 Transportation
A major focus in logistics is upon the physical movement of goods from point of origin to
point of consumption and their return. Transport is all about managing the movement of
product, equipment, and people. 39 Transport systems encompass the collective
infrastructure, equipment, and processes used in the movement of people and goods
amongst different geographic locations. 40 It includes all movement activities to, from, and
between points along the supply chain or distribution network including:
Mode selection - selecting the method of shipment (air, rail, road, pipeline) and the
specific means (e.g. internal, contract, courier etc).
Routing - Choosing the specific path.
Transport Operations operating rail, trucks, busses, ships, pipelines etc
Transhipment transferring goods from one mode of transport to another.
Port and terminal operations Loading and off-loading transport assets, stevedoring,
and customs clearance.
Monitoring and controlling the movement of goods, equipment and people scheduling,
manifesting, dispatch, track and trace, GPS etc.
4.5.2.2 Warehousing/Storage
In contrast to transport, storage and handling takes place at nodal points in the supply chain/
network. In an ideal system, if demand was known for sure and products could be supplied
Page 26

instantaneously to meet demand, there would be no requirement for inventory. However, as
demand cannot be predicted exactly, it is neither practical nor economical to operate in this
manner. Consequently, there is a requirement to hold inventories to improve supply-demand
co-ordination and to lower overall cost. Holding inventories produces the need for
warehousing and the need for materials handling. 41
Warehouses can serve different roles, they can serve as internal holding of goods to support
a companys operations such as a manufacturing or retail operation, they can store specific
goods in support of various customers, they can also be a staging activity in a larger
distribution operation or provide temporary storage. However, all warehouses have some
common aspects. They require receiving, inbound staging; put away, picking, packing,
consolidation, outbound staging and shipping or dispatch. The latter, shipping and dispatch
are often considered elements of the transport operation.
The costs of warehousing and materials handling are traded off with transport and
production purchasing costs as part of the logistics strategy and supply chain management
decisions. These in turn influence forecasting, order processing, packaging, and purchasing
decisions.
Warehousing involves the following major activities:
Inventory management location management, economic order quantity, inventory

level determination, stocktaking, production scheduling, and forecasting.
Warehousing operations holding, materials handling, order filling, picking, packing,
consolidation, bulk break, and movement within store, to, and from loading docks.
Other sub elements or supporting elements of Distribution/physical supply includes the

following:
Packaging
Information maintenance
Customer service
Order processing
Demand forecasting
Plant and warehouse site selection
Salvage and scrap disposal
Return goods handling
4.5.3 Maintenance and Maintenance Engineering

Maintenance and maintenance engineering includes the design, construction, test and
evaluation and maintenance of equipment in order that their technical integrity can be
assured and the equipment can be used for its intended purpose. Maintenance and
maintenance engineering can be broken down into engineering, repair maintenance,
production support, and technical support. At the process level, maintenance engineering
and configuration management are conducted as part of the integrated logistics support
process.
4.5.3.1 Maintenance Engineering
Maintenance engineering is the application of engineering skills and techniques to influence
the design, development, selection, and logistic support arrangements of equipment to
maximise availability and to minimise the maintenance impact over its intended service life.
Page 27

Throughout the in-service life of a product, maintenance engineering aims to solve problems
by addressing and eliminating defects and failures, which threaten the operational
performance of the equipment or product. 42 Maintenance engineering is applied throughout
the life cycle of a product or piece of equipment and will guide the physical maintenance,
product, and technical support decisions. Maintenance engineering is focussed on ensuring
the best reliability, availability, and maintainability of equipment and products within financial
guidelines to support the logistics and organisational strategy associated with the product.
Maintenance Engineers work on design specifications of minor modifications, preventive
maintenance documentation, problem identification and elimination, maintenance training,
and maintenance technical database.
4.5.3.2 Physical Maintenance
Physical maintenance includes the maintenance of assets, equipment, and products in order
that their technical integrity can be assured, i.e. they can be used for their specific purpose.
It includes all the actions taken to ensure that assets, equipment and products are operable
and in a serviceable condition, to return them to a serviceable condition or to update or
upgrade their capability. At the functional level, the components of maintenance include 43 :
Inspection and classification

Servicing
Adjusting and tuning
Repair
Modification
Rebuilding and overhaul
Reclamation
Recovery
Maintenance management is the collective term for describing the management process of
leadership and organization, planning and scheduling, preventive maintenance, condition
monitoring, execution of maintenance repairs, recording, root cause failure analysis, spare
parts management, and management of technical data supporting the processes above. 44
4.5.3.3 Production Support
Production support is the process of operating and maintaining a system (computer
application, piece of equipment, machinery or vehicle system, weapon system etc) over
time. It consists of cyclic and non-cyclic activities that allow a system to be maintained.
These activities and procedures are required to ensure the successful operation of the
system. 45 Production Support was created to bridge the process and procedural
gaps between applications development, technical support, and operational
areas for application implementation control and support services.
Requirements Management - Production requirements

Production Planning and Control
Technical Solution
Product Integration
Verification and validation
Quality Assurance
Plant Engineering, Management and Methods
4.5.3.4 Technical Support
Page 28

Technical support is a range of services providing assistance with computer hardware,
software, or other electronic or mechanical goods. In general, technical support services
attempt to help the user solve specific problems with a productrather than providing
training, customization, or other support services.
Most companies, which sell hardware or software, offer technical support over the telephone
or via various online media such as e-mail or a Web site. Companies and institutions can
have internal tech support for employees, students, or other associates. There are also
many freely available tech support forums on the Internet, wherein experienced users
volunteer to help novices. 46
The domain of Technical Support includes the following areas:
Requirements Analysis
Support Contracts
Field Engineering and Data
4.5.4 Disposition/Disposal
When items or services are consumed, the supply chain or integrated logistics support
processes are complete however, many items cannot be fully consumed, and logistics must
incorporate all activities associated with return of items for re-distribution or repair, salvage
or disposal. As environmental impacts become increasingly important, supply chain
management and integrated logistics support arrangements must have a greater focus on
the reverse flow and disposal of goods. These aspects will also impact on and be impacted
by design and life of type decisions.
Medical waste, bodies, computers, records disposal, hazardous waste,
The disposal functional process addresses the aspects involved in equipment phase-out and
disposition. The more complex a system or equipment is, the more involved are the support
systems. On phase out of these types of equipment, the associated support systems need to
be phased out as well.
Phase-out and replacement

Handling and processing
Material disposal, reclamation and recycling
Page 29
5 LOGISTICS IN A SECTORAL CONTEXT

Within the logistics framework described above, logistics systems work across organisational
boundaries to meet the logistics outcome of a particular organisation, endeavour, event, or
activity. Logistics can therefore also be examined from an industry sector view as described
in the following sections.
The application of the principles of Logistics is commonly grouped into sectoral applications,
often referred to as subsets of the broader Logistics profession, which together provide
availability within particular sector or market applications. 47 Industries with high value goods
and substantial spending on material products will probably have a greater requirement for
customisation and greater horizontal integration whereas low value goods and low value
products will be able to have greater standardisation and greater vertical integration. This is
depicted diagrammatically at Figure ? which shows the types of logistics structures that
could apply. 48
Greater
Customisation
Greater
Standardisation
Greater vertical
integration
Greater
horizontal
integration
Figure ? - A Framework for Logistics Structures 49

This will impact on supply chain and network design and the integration and relative focus of
operational elements. Figure x shows the types of industries in relation to the above matrix.
Page 30
Highvalueof
products/services
Lowproduct
complexity
Highvalueof
products/services
Highproduct
complexity
Chemical
ServicesLogistics
Retail
FMCG
Defence
Manufacturing
Humanitarian
Computersand
mobilephones
Medical
Eventlogistics
Lowvalueof
products/services
Lowproduct
complexity
Lowvalueof
products/services
Highproduct
complexity
A Framework for logistics Structures 50

A few examples of Logistics in its sectoral context are given below:
5.1 Military/Defence Logistics 51

Military/Defence logistics covers almost the full spectrum of logistics activities. Logistics
within Defence is defined within a broader context that in the commercial sector as it
includes aspects of personnel and health support. 52 However, even taking these two aspects
out of Defence logistics, the logistics endeavour within Defence must support the raising and
equipping of forces and their ongoing preparation for operations; the movement forces and
their equipment and supplies to a battle space for a specific operation; the providision of
arms, ammunition, fuel, food, repair parts, clothing and all other supplies required by a
military force and the return of forces and equipment. Within the military construct, defence
addresses logistics within two support dimensions:
Capability support This is the support needed to acquire, generate and maintain
capabilities (e.g. weapons systems, military organisations including all their
equipment, platforms) through life and to ensure capabilities are prepared for
deployment on operations.
Operations Support This is the support needed to deploy and redeploy a tailored
force, and sustain it for the duration of an operation.
These two dimensions are similar to the domains - business and engineering logistics as
described in this document. Defence logistics must therefore focus on operational availability
of its equipment and weapon systems whilst also ensuring goods and services are physically
available to support training and operations.
Defence therefore has a significant focus on integrated logistics support whilst also having to
focus on supply chain management across an extremely broad range of supply items. In
order to manage these items, they are grouped into classes of supply based on specific
characteristics. Thus there are numerous procurement, supply chain and distribution
arrangements within the Defence Organisation and a complex network of external suppliers
supporting the Defence organisation for the provision of goods, products and services.
Page 31

Managing this level of complexity from many suppliers provides Defence Logisticians with
multiple challenges, including designing the service network to balance the allocation of
capital and resources for each of the major assets. It also requires the modelling of
intangible elements to best align the assets of the network in support of the service levels
and performance commitments.
5.2 Retail Logistics 53

As retailers demand more and more out of their supply chains, to consistently reduce costs,
it has become increasingly important for retailers to have a clear understanding of the retail
supply chain. This sector is focused on the efficient movement and availability of fast moving
consumer goods, to deliver more out of their retail supply chains with increased efficiency
and reduced cost, from point of manufacture to delivery into individual retail outlets,
shopping centres, and department stores. There is a very significant focus on physical
availability and business logistics within this sector.
From the retailers perspective, this is the challenge - to balance product availability while
having the minimum items in storage (or inventory). Too much inventory leads to price
markdowns, waste or spoilage and high carrying costs, because money has been paid for
the goods but they are not sold. Too little inventory can mean lost sales and disappointed
customers.
In order to maximise efficiency and meet customer expectations, companies along the retail
supply chains are required to source, manufacture and deliver products to the (actual or
virtual) shelf. Retail logistics involves a range of activities: designing the supply network,
locating and sourcing items for sale, managing relationships with suppliers, along with the
more highly visible transport and distribution aspects, by air, road, rail, and sea. Specialists
are also required to minimise and manage the risks of getting goods from multiple, often
global suppliers to the point of sale.
Successful execution of global sourcing and logistics is extremely challenging and requires
parties who can form links in supply chains that are flexible enough to make last minute
changes to assortments of cartons, containers, and destinations. Logistics and sourcing
managers therefore require visibility and information concerning models, styles, colours,
production locations, order sizes, store assortments, and transport schedules within each of
the many supply chains they communicate with.
Retail distribution centres and warehouses receive products from multiple suppliers and then
assemble deliveries for specific stores. They must have excellent systems in place to allow
for efficient inflow, outflow of goods, and provide the inventory status for all products at any
given time. This requires the implementation of sophisticated computerised warehouse
management systems (WMS) and communication devices to identify the location and
volume of all the stock keeping units (SKU).
To support the WMS, retailers are investing in corporate Logistics IT applications, which
provide an integrated planning and financial management system. This includes financial
planning for the merchandise purchases, buying and product assortment management, store
allocation of products and inventory replenishment and analysis to forecast sales and
optimise inventory volumes.
Using these systems, Logisticians can more accurately forecast consumer demand, optimise
the inventory, and improve speed and agility of the supply chains. Shorter ordering cycles
can lead to greater efficiencies, reduce the likelihood of items being unavailable, and provide
quicker responses in exceptional circumstances (such as severe weather). This leads to
increased customer satisfaction and creates smoother flowing supply chains for all the
parties involved, thereby increasing efficiency, and effectiveness.
Page 32
5.3 Humanitarian Logistics 54

Humanitarian logistics supports the, often global, relief operations that bring life saving
medicines, food, and materials to people affected by a disaster. This involves everything
from keeping helicopters in the air in difficult conditions, to getting ground traffic through
inhospitable country and maintaining communication links.
Humanitarian logistics encompasses very different operations at different times, and as a
response to various catastrophes. All these operations have the common aim to aid people
in their survival. Nonetheless, aid to assist the development of a region, famine aid and the
running of refugee camps is substantially different from the kind of aid needed after a natural
disaster. Thus, two main streams of humanitarian logistics can be distinguished, continuous
aid work, and disaster relief. While famine relief is sometimes also covered under disaster
relief (Long, 1997), usually, the term disaster relief is reserved for sudden catastrophes
such as natural disasters (earthquakes, avalanches, hurricanes, floods, fires, volcano
eruptions, etc.) and very few man-made disasters such as terrorist acts or nuclear accidents.
Relief itself can be defined as a foreign intervention into a society with the intention of
helping local citizens (Long and Wood, 1995, p. 213).
5.4 Services Logistics 55

Services logistics is the application of logistics to the services sector. Services can be best
described as economic activities that produce time, place and form, or psychological
utilities. 56 Services can therefore be conceptualised as non-tangible deliveries although they
can usually not be separated from actual physical products. For example, when a doctor
sets a broken bone, he has delivered a service but he cannot provide the service without the
plaster required.
Service industries are incredibly broad and, as with any logistics activity, the logistics
strategy and processes must be developed in line with customer requirements to achieve the
corporate strategy. However, characterising their behaviour in the service industry is often
more challenging and thus impacts on the management of logistics. For example the airline
industry has widely varying demand patterns but can react by adding flights if excess
capacity exists (or is designed into the system) but only up to the level of available capacity.
This can therefore be managed as increments. This is similar to the hotel or rental car
industry. However, the time needed to respond to large fluctuations will be much longer as it
may need the movement of a facility or the acquisition of more assets. In the financial
services industry, it takes time to build the banking infrastructure to serve a growing
population whereas in the legal industry, the logistics challenges are likely to be around the
provision of buildings and technical infrastructure such as computers and supporting
communications infrastructure.
While service industries are unique in many respects, they also have similar characteristics
to standard manufacturing and distribution systems, especially in the scope of the delivery
processes. Service logistics can be broken down into two main aspects:
Within the facility logistics. This involves the design and operation of the physical
plant with respect to logistical goals and objectives i.e. how the flow of food,
medicine, and inventory effects the delivery of the service, or how the maintenance
and servicing of equipment effects the delivery. The focus is also on the design and
layout of guest/client handling systems (e.g. elevators, shuttle buses etc).
Between the facility logistics. This involves the structure and processes to move
people and material between facilities in order to met customer requirements, and
are focussed very much on location design, sourcing, and inventory decisions in a
similar manner to other sectors.
Page 33
5.5 Consumer Goods Logistics

As a rule, production of consumer goods has two distinct components:
5.5.1 Fast Moving Consumer Goods

FMCG companies that make and sell durable consumer goods such as electronics,
household products and apparel
5.5.2 Consumer Packaged Goods

CPG companies make and sell non-durable goods that are typically food based.
5.5.3 Frozen Goods

These companies make and sell frozen products such as dairy products, meat products etc,
which typically requires very specialised temperature controlled supply chains.
While their internal processes may differ, the external challenges faced by these enterprises
are the same. In the FMCG and CPG sectors, competition between companies for retail
shelf space is huge, which forces implementation of the latest Logistics techniques and
leading-edge technologies.
Because they sell into the retail sector, the suppliers are required to meet strict criteria
concerning the delivery of products in full, on time and with perfect transaction accuracy.
This requires highly effective, global supply chains in order to have components, ingredients
and packaging supplied to the FMCG and CPG companies effectively and efficiently as
possible. Logistics achieves all of this!
The level and complexity of logistics involved relates to whether all manufacturing is
undertaken by the product brand company or whether it is outsourced to specialist
businesses, (these may be called Manufacturing Service Providers, Contract Manufacturers
and Original Design Manufacturers or ODM). Outsourcing manufacturing enables the brand
company to concentrate on relating with its retail customers and consumers, but in order to
decide whether this is the best method, logisticians assess each product and category, in
each geographic region and evaluate possible suppliers, along with the potential risks
involved.
Consumer goods are diverse and distinct in their product characteristics, manufacture,
transport, support and storage requirements. These typically include:
5.5.4 Electronics Supply Chain

ODM suppliers dominate the worldwide production of notebook and desktop PCs and they
are aggressively seeking to replicate this success in other electronic product segments.
While the majority of manufacturing is concentrated in Asia, the distribution and after sales
services, repair and end of life product recycling belong in the geographic regions and
countries with access to consumers that have money to spend. Managing the imports from
the ODM and contract manufacturers often uses the services of Logistics Service Providers,
who work with the logistics, sales, and marketing groups within the brand company to
identify product volumes and delivery timing.
5.5.5 Apparel Supply Chain

This involves providing different stock for up to four seasons over a yearly cycle, in two
hemispheres and over a range of latitudes. The supply chains involve design, multi-country
manufacture, and supply of items made from a range of materials in a collection of colours
and sizes from widespread global distribution centres. It is not unusual for a relatively small
Page 34

apparel company to manage the movement of over 50,000 stock keeping units (SKUs)
relating to style, size, colour, and fit.
5.5.6 Food Products Supply Chain

Food has a relatively short shelf life (or use by date) and must be managed quickly and
carefully, especially those, which are stored, cool, cold or frozen. Food products can have
multiple global supply chains and there is a greater risk to product quality caused through
inadequate handling and/or packing. For these reasons, many food companies deal directly
with their ingredient suppliers and undertake their own manufacturing but use Logistics
Service Providers for finished product distribution activities.
5.6 Automotive Logistics
5.7 Event Logistics

Event logistics incorporates all the logistics activities associated with supporting events from
major events such as Olympic and Commonwealth Games, through to motor show, music
spectacular, or exhibitions. The main focus of Event Logistics is to ensure that equipment,
vehicles, artists or exhibits from just about anywhere around the world arrive safely and
securely and they are in place in time for the event. The process continues as goods and
people are moved, on time, to the next location or else back to their places of origin and as
services are provided to spectators.
The challenges for events are greatest for one off events such as Olympic or
Commonwealth Games, which involve multiple events across multiple destinations and
linking into global supply chains. These events usually have the added complexity of a
security component overlaid, which impacts on the delivery of goods, services, and people.
5.8 Chemical Logistics

Supply chain costs in the global chemicals industry are more than 40% of the value that has
been added to the raw materials in making the required product this is the highest of all
major industries. Very complex and therefore often inefficient supply chains will incur too
much cost, which affects profitability.
Companies positioned through the chemicals supply chain consider distribution of their
products to be a core competency transit costs and service are critical. The specialised
nature of these hazardous products requires very specific expertise, equipment, and
handling considerations, with visibility of product location being a critical need.
Companies typically negotiate contracts for the receipt and delivery of chemicals and look to
Logistics Service Providers (LSP) with specialist expertise to execute the operations;
chemical companies therefore need a close working relationship with their LSP companies.
The opportunities for using Logistics Service Providers have mostly been in operations
scheduling, trucking services, container dispatching and invoice payment services. It is
common to have a Service Provider onsite at the distribution terminal to physically operate
the packaging and delivery of the chemicals. In some situations, the Service Provider takes
over management of all processing for a customer which means grinding, providing
additives, then packing and distributing or shipping in bulk.
Page 35

Delivery to places requiring international shipments and where the chemical product
company does not have a strong presence requires the services of specialist freight
forwarders and customs brokers.
The transport of chemicals is by specialised storage and handling facilities such as chemical
parcel carriers, chemical sea and road tankers, and specialist ships. Logisticians in the
chemical product companies need to know where every truck, rail wagon, and ship is, so
technical specialists are required at service providers and carriers to track and trace
products and vehicles.
Becoming a provider of total services for a chemical product company is the goal of the
specialist Logistics Service Providers. However, it requires a high level of trust between the
parties, so customer service relationship building is a vital part of chemical logistics services.
In the chemical industry, having safe, reliable, and environmentally sound operations, both
inside and outside the refinery or factory is critical. Responsible Care is a long-standing
ethic in this sector, as the supply chains for a chemical product are subject to external
inspection and surveying.
This makes thinking about chemical supply chains more holistic and, due to the hazardous
nature of the industry, a lot of best practice information is shared between companies.
Responsible Care provides a risk based approach to logistics and procurement specialists
use these criteria when selecting a carrier, terminal, or other Logistics Service Provider.
The potential of taking an end-to-end total cost approach to the chemical supply chains is
widely recognised. This requires long-term strategic analysis due to all competitors having
broadly the same competencies and high financial investment in facilities
5.9 Cold Chain Logistics 57

Cold Chain Logistics is best defined as the maintenance of produce temperature throughout
the Demand/Supply chain (from harvest to the consumer). Effective Cold Chain Logistics is
critical to the movement of frozen and cold (perishable) products, as poor cold chain
management will negatively impact product quality of perishable products: Softening,
bruising, unwanted ripening, bacterial growth, texture degradation etc.
Cold chain logistics has become a specific field of logistics and has considerable horizontal
integration by specialised service providers.
5.10 Logistics Service Providers

Whilst organisations usually have some internal logistics capabilities and will certainly have
internal planning and coordination of logistics activities, almost all companies and industries
will use external logistics service providers to some degree. Service providers can include
transport companies, freight forwarding organisations, warehouse providers, stevedoring
companies, or a combination of the above. The extent to which an organisation relies on the
provision of outsourced logistics services will depend on their competitive and supporting
logistics strategy. This outsourcing may involve the actual entire logistics operation including
physical, information, and control activities or may just include the contracting of a specific
service such as transport.
These service providers are usually referred to as 2nd party logistics providers (2PL when
they just??, 3rd party logistics providers when they provide ??? and fourth party logistics
providers when they are integrating other services on behalf of a customer.
It is worth noting that this sector often is referred to as logistics, whilst technically this sector
represents logistics operations, see definitional context in paragraph 1.2 above.
Page 36
6 LOGISTICS IN A CROSS SECTORAL CONTEXT

As discussed in Section ?, the logistics strategy and effort varies across the two major
logistics domains. In this context, the focus of logistics effort will be different across the
various industry sectors, and the types of logistics activities and management aspects will
vary. For example, a logistics service provider supporting the retail sector will likely focus a
large part their logistics efforts on managing inventory whereas a chemical company may be
more focused on the transport operation. Logistics service providers may be generic or
generalised and will focus on customer support.
Figure ? below demonstrates the sorts of differences that may occur across a few
sectors:
Retail
Shelf
Availability
Fastresponsive
supplychain
management
Distributionfocus
Defence
Equipment
availability
and
Manydiffering
availability
supplychains
ofsupplies
andILS
managementof
complex
equipments
Maintenance,repairpart,
pipeline,combatsupply
distribution
Transport
Bdoubles
Allmodes,
Warehousing
Highrise,
Largestaticwarehosues throughto
shorttermstoragehubs
maintenance
limited
Militray equipment
Chemical
Resources
Physical
availability
of
Focusonsafe
chemicals
androbust
supplychains
Physical
availability
Stablebut
international
supplychains
andILSof
supportequip
Bulkstorageand
transport
Bulkstorageand
transport
Bulk carriers
Transport
Miningequipment
Subject
Page 37
7 SUMMARY
Page 38
8 REFERENCES
A Common Body of Knowledge can be defined as A domain of essential information,

mastery over which is required for success in a field or profession. 2007-2009
BusinessDictionary.com
2
According to the Oxford English Dictionary, professions involve the application of specialised
knowledge of a subject, field, or science to fee-paying clientele. (Oxford English Dictionary, Second
Edition, Oxford University Press, 1989). The implication of being a profession is based on the fact that
Professional activity involves systematic knowledge and proficiency." (http://www.ethicalperspectives.be/page.php?LAN=E&FILE=ep_detail&ID=100&TID=909 Asa Kasher, Professional
Ethics and Collective Professional Autonomy: A Conceptual Analysis, Ethical Perspectives, 12/1
(March - 2005), pp. 67-97).
3
Council for Supply Chain Management Professionals/
Russell, Stephen Hays; Winter 2000, Growing World of Logistics, Air Force Journal of Logistics.
See notes Pieter Nagel
The American Heritage, Dictionary of the English Language: Fourth Edition, 2000,
http://www.bartleby.com/61/14/L0231400.html
Use footnote detailed in reference.
Lambert, D. M. and Stock, J. R., 1993, Strategic Logistics Management 3rd ed, Irwin, p 19
Commonwealth of Australia, 2003, Defence Logistics, p1-11
10
Coyle, Bardi and Langley, 1988: The Management of Business Logistics 4th Ed, West Publishing,
pp 7-8.
11
http://en.wikipedia.org/wiki/Logistics
12
Coyle, Bardi and Langley, op cit, p 6
13
http://cscmp.org/aboutcscmp/definitions.asp
14
Coyle, Bardi etc p8
15
Department of Defence ADDP4, p 1-15
16
US Society of Logisticians, quoted in The Air Force Journal of Logistics, Summer 1988.
17
Ballou, R. H., Business Logistics Management, Prentice Hall, p4
18
www.barloworld-logistics.com/cws/mvc
19
Possibly from this article

www.emeraldinsight.com/Insight/ViewContentServlet?Filename=Published/EmeraldFullTextArticle/Art
icles/0050240701.html
Also from
home.earthlink.net/~larrydev/stthomasbrief.ppt
20
http://en.wikipedia.org/wiki/Logistic_engineering .
21
http://www.scribd.com/doc/6915301/Supply-Chain-Management
22
www14.informatik.tu-muenchen.de/konferenzen/Jass08/courses/2/berseneva/slides_berseneva.ppt
23
http://ilscm.vu.edu.au/wiki/The_Functional_Level
24
http://ilscm.vu.edu.au/wiki/Integration
Page 39
25
http://en.wikipedia.org/wiki/Supply_chain_management
26
http://whitepapers.securityfocus.com/option,com_categoryreport/task,viewlist/sort,/id,22/cat,215/limit,2
5/limitstart,25/ , http://whitepapers.pcmag.com/enterprise-applications/supply-chain-management/
27
http://cscmp.org/aboutcscmp/definitions/asp
28
http://wapedia.mobi/en/Supply_chain_management, http://www.categoric.com/solutions/foroperations/supply-chain-event-management-scem.html
29
Jones, J.V., 2006, Integrated logistics Support Handbook, 3rd Ed, McGraw Hill
30
Army Regulation 700-127, Integrated Logistics Support, 27 Sep 2007.
31
SOLE, The international society of logistics - http://www.sole.org/info.asp
32
http://en.wikipedia.org/wiki/Integrated_Logistics_Support
33
ADDP 4 p 2-18
34
http://en.wikipedia.org/wiki/Procurement
35
Coyle, Bardi, Langley, op cit, P 57
36
Glossary of Defense Acquisition Acronyms and Terms, 12th Edition
37
ADDP 4, p 2-17.
38
Procurement
39
Lambert and Stock, op cit, p 15
40
Logistics engineering handbook, p 14-1
41
Ballou, op cit, p 245
42
TRAMM Vol 2 Section 2 , 5.1
43
Derived from ADDP 4 p 2-13.
44
http://www.idcon.com/maintenance-definition-M.htm
45
Derived from http://www.sei.cmu.edu/cmmi/presentations/sepg04.presentations/sw-maint.pdf
46
http://en.wikipedia.org/wiki/Technical_support
47
http://ilscm.vu.edu.au/wiki/Logistics
48
This diagram is derived from ???
49
Derived from Global logistics framework for supply chain structures Dornier, P.P., et al., Global
Operations and Logistics text and Cases, New York, john Wiley and Sons, 1998.
50
Derived from Global logistics framework for supply chain structures Dornier, P.P., et al., Global
Operations and Logistics text and Cases, New York, john Wiley and Sons, 1998.
51
http://ilscm.vu.edu.au/wiki/Military_Logistics
52
Insert definition of logistics from ADDP 4.
53
http://www.arup.com/logistics/skill.cfm?pageid=4099
54
http://www.emeraldinsight.com/Insight/ViewContentServlet?Filename=Published/EmeraldFullTextArtic
le/Articles/0050370201.html 55
Logistics Engineering handbook
56
Logistics Engineering handbook, p 29-2
Page 40
57
http://www.transport.sa.gov.au/pdfs/freight/lamp_docs/coldchaininformation6mar03.pdf
Page 41

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LOGISTICS IN CONTEXT:

Availability from both Physical and Operational Perspectives

Prepared by Dr Pieter J A Nagel

Logistics in Context Availability from both Physical and Operational Perspectives

BACKGROUND AND PURPOSE .................................................................................... 5

PURPOSE AND SCOPE.................................................................................................. 5

DEFINITIONAL COMPLEXITIES ....................................................................................... 5

LOGISTICS: DEFINITION AND CONTEXT..................................................................... 7

BACKGROUND AND HISTORICAL CONTEXT .................................................................... 7

WHAT IS LOGISTICS? ................................................................................................... 7

LOGISTICS: THE UNDERLYING CONCEPT ................................................................. 9

Business Logistics - Physical Availability ............................................................ 9

Engineering Logistics Operational Availability ................................................ 10

LOGISTICS IN A SYSTEMS CONTEXT ............................................................................ 10

Systems Levels of Logistics .............................................................................. 11

THE LOGISTICS FRAMEWORK ................................................................................... 14

DOMAINS WITHIN LOGISTICS....................................................................................... 14

Engineering Logistics ........................................................................................ 15

Business Logistics ............................................................................................. 15

LOGISTICS STRATEGY ................................................................................................ 16

LOGISTICS INTEGRATION PROCESSES ........................................................................ 18

Supply Chain Management ............................................................................... 19

Integrated Logistics Support .............................................................................. 20

The Relationship between ILS and SCM .......................................................... 20

DYNAMIC VALUE NETWORKS ...................................................................................... 21

Characteristics of Dynamic Value Networks ..................................................... 23

Critical Success Factors .................................................................................... 23

LOGISTICS - FOCUS ON AVAILABILITY............................................................................ 9

FUNCTIONAL PROCESSES VS. LOGISTICS OPERATIONS ............................................... 24

Acquisition, Procurement and Purchasing ........................................................ 24

Distribution or Physical Supply .......................................................................... 26

Maintenance and Maintenance Engineering ..................................................... 27

LOGISTICS IN A SECTORAL CONTEXT ..................................................................... 30

MILITARY/DEFENCE LOGISTICS .................................................................................. 31

RETAIL LOGISTICS ..................................................................................................... 32

HUMANITARIAN LOGISTICS ......................................................................................... 33

Logistics in Context Availability from both Physical and Operational Perspectives

SERVICES LOGISTICS ................................................................................................. 33

CONSUMER GOODS LOGISTICS .................................................................................. 34

Fast Moving Consumer Goods .......................................................................... 34

Consumer Packaged Goods ............................................................................. 34

Electronics Supply Chain .................................................................................. 34

Apparel Supply Chain........................................................................................ 34

Food Products Supply Chain............................................................................. 35

AUTOMOTIVE LOGISTICS ............................................................................................ 35

EVENT LOGISTICS ...................................................................................................... 35

CHEMICAL LOGISTICS ................................................................................................ 35

COLD CHAIN LOGISTICS ............................................................................................. 36

LOGISTICS SERVICE PROVIDERS ............................................................................. 36

LOGISTICS IN A CROSS SECTORAL CONTEXT ....................................................... 37

Logistics in Context Availability from both Physical and Operational Perspectives

Logistics in Context Availability from both Physical and Operational Perspectives

1 BACKGROUND AND PURPOSE

1.1 Purpose and Scope

Section 1 provides a background and purpose of the document

1.2 Definitional Complexities

Logistics in Context Availability from both Physical and Operational Perspectives

Logistics in Context Availability from both Physical and Operational Perspectives

2 LOGISTICS: DEFINITION AND CONTEXT

2.2 What is Logistics?

Logistics in Context Availability from both Physical and Operational Perspectives

Logistics is the integrated, time related, positioning of resources to ensure

Logistics in Context Availability from both Physical and Operational Perspectives

3 LOGISTICS: THE UNDERLYING CONCEPT