What is logistics?

"Logistics means having the right thing, at the right place, at the right time."

Logistics - (business definition) Logistics is defined as a business planning framework for the management of material, service, information and capital flows. It includes the increasingly complex information, communication and control systems required in today's business environment. -- (Logistix
Partners Oy, Helsinki, FI, 1996)

Logistics - (military definition) The science of planning and carrying out the movement and maintenance of forces.... those aspects of military operations that deal with the design and development, acquisition, storage, movement, distribution, maintenance, evacuation and disposition of material; movement, evacuation, and hospitalization of personnel; acquisition of construction, maintenance, operation and disposition of facilities; and acquisition of furnishing of services. -- (JCS Pub 1-02 excerpt) Logistics - The procurement, maintenance, distribution, and replacement of personnel and materiel. -(Websters Dictionary)

Logistics - 1. The branch of military operations that deals with the procurement, distribution, maintenance, and replacement of materiel and personnel. 2. The management of the details of an operation. [French logistiques, from logistique, logic (perhaps influenced by loger, to quarter), from Medieval Latin logisticus, of calculation.] -- (American Heritage Dictionary) Logistics - ...the process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements." Note that this definition includes inbound, outbound, internal, and external movements, and return of materials for environmental purposes. -- (Reference: Council of
Logistics Management, http://www.clm1.org/mission.html, 12 Feb 98)

Logistics - 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 point of origin to point of consumption for the purpose of meeting customer requirements. -- (Reference: Canadian Association of
Logistics Management, http://www.calm.org/calm/AboutCALM/AboutCALM.html, 12 Feb, 1998)

Logistics - The science of planning, organizing and managing activities that provide goods or services. -(MDC, LogLink / LogisticsWorld, 1997)

Logistics - Logistics is the science of planning and implementing the acquisition and use of the resources necessary to sustain the operation of a system. -- (Reference: ECRC University of Scranton / Defense
Logistics Agency Included with permission from: HUM - The Government Computer Magazine "Integrated Logistics" December 1993, Walter Cooke, Included with permission from: HUM - The Government Computer Magazine.)

Logist - To perform logistics functions or processes. The act of planning, organizing and managing activities that provide goods or services. (The verb "to logist." Eg. She logisted the last operation. I will logist the next operation. I am logisting the current operation. We logist the operations. The operations are well logisted.) -- (MDC, LogLink / LogisticsWorld, 1997)

Logistic - Of or pertaining to logistics. -- (MDC, LogLink / LogisticsWorld, 1997) Logistical - Of or pertaining to logistics, logistics-like. -- (MDC, LogLink / LogisticsWorld, 1997) Logistics Functions - (classical) planning, procurement, transportation, supply, and maintenance. -(United States Department of Defense DOD)

Logistics Processes - (classical) requirements determination, acquisition, distribution, and conservation. -- (United States Department of Defense DOD) Business Logistics - The science of planning, design, and support of business operations of procurement, purchasing, inventory, warehousing, distribution, transportation, customer support, financial and human resources. -- (MDC, LogLink / LogisticsWorld, 1997) Cradle-to-Grave - Logistics planning, design, and support which takes in to account logistics support throughout the entire system or product life cycle. -- (MDC, LogLink / LogisticsWorld, 1997) Acquisition Logistics - Acquisition Logistics is everything involved in acquiring logistics support equipment and personnel for a new weapons system. The formal definition is "the process of systematically identifying, defining, designing, developing, producing, acquiring, delivering, installing, and upgrading logistics support capability requirements through the acquisition process for Air Force systems, subsystems, and equipment. -- (Reference: Air Force Institute of Technology, Graduate School of Acquisition and Logistics.) Integrated Logistics Support (ILS) (1) - ILS is a management function that provides planning, funding, and functioning controls which help to assure that the system meets performance requirements, is developed at a reasonable price, and can be supported throughout its life cycle. -- (Reference: Air Force Institute
of Technology, Graduate School of Acquisition and Logistics.)

Integrated Logistics Support (ILS) (2) - Encompasses the unified management of the technical logistics elements that plan and develop the support requirements for a system. This can include hardware, software, and the provisioning of training and maintenance resources. -- (Reference: ECRC University of Scranton /
Defense Logistics Agency Included with permission from: HUM - The Government Computer Magazine "Integrated Logistics" December 1993, Walter Cooke.)

Logistics Support Analysis (LSA) - Simply put, LSA is the iterative process of identifying support requirements for a new system, especially in the early stages of system design. The main goals of LSA are to ensure that the system will perform as intended and to influence the design for supportability and affordability. -- (Reference: Air Force Institute of Technology, Graduate School of Acquisition and Logistics.)

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Some use the two interchangeably, others feel there are differences, the combination of which leads to what has become somewhat of a grey area.

It does however seem that in the common vernacular that SCM seems to be becoming more prevalent in use with many new industry associations using "supply chain" in their names and even some older industry associations changing their names adding in "supply chain" as well. To my mind they are so inextricably related as to be almost synonymous, ergo the name of this site ( Logistics/Supply Chain ) however in the case of logistics, it depends on the context of use. Suffice it to say that if one had to differentiate between the two it would be to say that Supply Chain Management is looking at active management of the whole enchilada, while logistics can relate to part or parts with the supply chain. Unless an individual wishes to assume it, to make logistics literally synonymous probably requires the use of additional words like "total logistics management" or "integrated logistics management" to definitively mean the same thing. But what does everyone else think ? This is a topic which every logistician may hold an opinion on, and I hope they will take the time to share it with you and others here on the Logistics/Supply Chain Forum.
_____________________________________________________________________________________ Just a view on the differences between the terms logistics and SCM. Logistics has it's focus on material handling, stocks, and movements in one part of the supply chain, or maximum the movements from suppler to you to customer. It's aim is to maximize profits, minimize costs and improve customer service for ONE actor in the chain. Supply chain management had a broader view, and focuses on the total value chain (from seed, to flower, to bread, to consumption, for instance), and tries to optimize the total value added by the chain.

SCM has the production element, while logistics focuses on flow and storage of material. Production is considered manufacturing which is different from value added production such as kitting. So, logistics is a part of SCM. Logistics is the part of SCM dealing with everything except production. There is specialization required for production that most logisticians do not possess. This is generally left to the industrial engineers. The argument could be made for logistics containing production - because the flow of material could be through the factory. Most items I have read don't look at it this way, because of the specialization required for manufacturing. Value added production items are generally easy to accomplish items like kitting, changing labeling from English to Spanish, etc. are a part of logistics. As you can see from the different responses - Everyone agrees that they are different, but no one can agree why.

Logistics has been more or less identified to movement/ transportation of materials. Supply chain by itself relates to all the different entities that become part of the network. It is more or less the "hard-ware(not in the real sense!)" of entities that work with each other. Whereas Total Logistics is more of a "Software (not in the real sense!!)" which invloves activities pertaining to planning, scheduling and actual Fulfillment. Logistics has always been associated to delivering the right materials to the right entity at the right cost , quality, quantity and time. Whereas Supply chain is a link of several entities like a raw/Packing materials supplier, manufacturer, transporter, distributor, retailer and so on and so forth--a group of entities that enable Logistics (as per the definition above). The Management of these entities to deliver Logistics excellence is called Supply Chain Management.

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II. The Intermodal Freight Movement Process

Most freight shipments are intermodal. Virtually all air, waterborne, and non-bulk rail shipments involve more than one mode of transportation. Motor carrier movements are apt to be part of almost all intermodal movements, although motor carrier movements are also the most likely to be uni-modal. Long-haul highway shipments in particular are becoming noticeably more intermodal as trucking companies have shifted line haul movement legs to railroad trailer- or container-on-flat-car movements.[2] This section of the paper relates the intermodal freight movement process to freight identification "events."

A. Freight Terminals and Freight Identification Events

From a freight identification perspective, the most important segment of most transportation movements is in the terminals. Critical transactions are concentrated in terminals, including mode shifts for intermodal movements and changes in the relationship between a freight shipment and its means of conveyance. (For example, in a less-than-truckload (LTL) terminal, shipments arrive in one truck, get sorted, and leave in another truck.) Although many documentation and identification errors begin at the shipment origin, terminals are the focus of operational complexity and they are the place where most problems occur.

"Terminals" covers a wide range of facilities and activities in every mode of transportation. Figure 1, taken from an excellent overview of intermodal freight transportation in relation to intelligent transportation systems, summarizes the kinds of intermodal connections and terminal operations that characterize international freight shipments.[3] By extension, Figure 1 can be used also to describe domestic freight shipments. Figure 1 encompasses virtually every opportunity for and requirement to apply freight identification technologies:
y y

Every arrowhead in Figure 1 represents the arrival or departure of a shipment at an origin, destination, terminal, or junction such as a border crossing Every box represents at least one internal process transactions that must be recorded such as the creation of a shipment or the tracking of a small shipment through a container consolidation station Almost every connecting line represents a linehaul ripe for position reports about moving transportation equipmenttrucks, railcars, planes, shipsand, by deduction, their associated freight shipments.

Figure 1: An Overview of the International Freight Transportation System All of these movements and transactions call for some degree of visibility and management control. Transportation carriers are concerned about the identification and location of their equipment and the logical connections to customer shipments. Consignors and consignees are concerned about the status of their materiel. The timeliness of visibility information and the degree of management control vary with the value of the freight, the mode of transportation, and the logistics strategy of the customer. However, in almost all cases, technology of some sort is

applied to detect, record, or report events such as:

y y y y y

Key transactions that affect control of or responsibility for a shipmentfor example, consolidate, load, unload, arrive, depart Changes in condition that affect the integrity of the shipmentbreaking a seal, opening a door, spiking temperature Regulatory compliancetruck or container weight Activity levels or status at key terminalscongestion reports Actual equipment or shipment locationreferenced to passing a milepost or on a continuous, near real-time basis

B. Freight Identification vs. Equipment Identification

Each automated process mentioned in the preceding section identifies and reports on the status of transportation equipment, whether railcars, tractors, or aircraft. The traditional and logical focus of transportation operators is on managing their own assets and operationsfocusing on trailers, containers, and railcars; and on tractors, locomotives, aircraft, and ships. The carriers maintain a data file with the current assignments of their equipment to customer loads, and they highlight important shipment characteristics, such as hazardous materials. However, the full detail on the freight itself customarily resides with the consignors or consignees, not the carriers. The difference is reflected in terminology, as some carriers speak of Automatic Equipment Identification (AEI) while some shippers address Intransit Visibility (ITV). The relationship between transportation equipment and freight is the first in an often complex set of relationships. Freight transportation involves multiple nestings of materiel packages, best pictured as a set of hollow Russian dolls, each stored inside a slightly larger version of itself. Figure 2 illustrates a five-deep set of relationships, one of many possible freight nesting scenarios.[4] Relatively small piece parts are being shipped together to a consignee. Several small shipments are combined in a box or multi-pack. Multiple boxes are combined on a pallet. Multiple pallets are stuffed in a container and a tractor hauls the container. Several methods are available to identify each level of item or consolidation, from plain text labels through simple barcodes to more sophisticated media. In any effective and economical process, each level and each identification serves a useful purpose. It is important to establish correct nesting relationships as materiel is prepared for shipment, and then to maintain correct relationships as changes occur in the life cycle of a shipment. At a minimum, failure to keep the relationships in order will disrupt intransit shipment visibility and, at a maximum, result in lost or astray freight. Building and maintaining correct database relationships between nested items is necessary but insufficient for an effective freight identification and status reporting process. Users and their systems also must be able to move easily and transparently across nesting levels and changing relationships to retrieve information as they need it. The need for good access to the information demands effective communication channels for detailed data and transaction confirmations, plus well-integrated application systems and query tools.

Freight identification technologies are rarely of value in and of themselves. Their worth is enhanced or diminished by the total information system and business process of which they are a part. Hence, unless one is concerned only with engineering issues, trends in freight identification technologies must be considered in relation to broader logistics process trends.

Figure 2: Freight Nesting Relationships Illustrating Multi-Level Freight Identification Options 2. Truckers were long considered the primary competitor to the railroads for general freight, but they are now the railroads' largest customers in this line of business. In effect, truckers provide retail transportation while the railroads provide a wholesale service. Steven Ditmeyer, Intermodal Task Force Meeting at the ITS America Annual Meeting, May 5, 1998. 3. Aylward, Anne D., "Intelligent Transportation Systems and Intermodal Freight Transportation," Volpe National Transportation Systems Center, December 1996. Figure 1 has been adapted with minor changes from page 11. 4. The core of Figure 2 was developed several years ago by the author's team at the Volpe Center, where he served as chief of the Intermodal and Logistics Systems Division. previous | next US DOT Home | FHWA Home | Operations Home | Privacy Policy United States Department of Transportation - Federal Highway Administration Last modified: October 29, 2009