The Past, Present, and Future of Logistics

Te-Cheng Yu

Dept. of Logistics Management,

National Kaohsiung Marine University

Contents

• Introduction • The allusion of “logistics” from the Orient • The definitions of “logistics” in the west • Logistics lies in making the best use of

resources • Logistics stresses the use of tools for fluent

delivery • Logistics lies in making the best use of human

resource• An integrated logistics management system• The Best Achievement among Generations Ever• The future development of logistics

Introduction

• Reengineering the Corporation – (Champy & Hammer, 1993 )

• X-engineering the Corporation – (Champy & Hammer, 2003)

• Logistics revolution – after World War II

• Chinese logistics– back to the Chu-Han empire

The purpose of this paper

• To integrate the understanding of the west and the oriental society towards logistics

• To explore the concept, definition, and management model of logistics from the past to the present through the resource-based theory and the customer-oriented views

• To figure out a global logistics philosophy– The definition of logistics and also be applied to

the new classical business model in trans-national and trans-corporation reengineering

– To benefit the development of the global logistics industry and the competitive strength of individual enterprises.

The allusion of “logistics” from the Orient

• Logistics is derived from “The Biographic Sketches of Emperor Gaozu,” Shihji – Mapping out a strategy in the command tent to deter

mine the victory in thousands of miles away

• What is logistics?– Strategic resources planning – An effective vertical integration system which demand

s fully support to provide all of the usable resources, frames the best strategy and tactics for aiding the front-line team to achieve target, and wins every encountered battle with limited resources

The definitions of “logistics” in the west

• In Greek & French – Logistikos indicates having logisticsal concept and cal

culation measures. – Logistique, it implies “quartering the soldiers.” Hence,

the concepts of “logic”, “calculation”, and “quarter” comprise the basic meaning of the western “logistics”

• Logistics Definitions – inventory, customer, dictionary, International Society

of Logistics, famous nebulous, Biblical, utility, Council of Logistics Management, component, functional, and common culture

Logistics Definitions

• Inventory– Management of materials in motion and at res

t.

• Customer – Getting the right product, to the right customer,

in the right quantity, in the right condition, at the right place, at the right time, and the right cost. (called the Seven Rs of Logistics.)

Logistics Definitions• Dictionary

– The branch of military science having to do with procuring, maintaining, and transporting material, personnel, and facilities.

• International Society of Logistics – The art and science of management,

engineering, and technical activities concerned with requirement, design, and supplying and maintaining resources to support objectives, plans. and operations.

Logistics Definitions

• Famous Nebulous – World War Chief of US Naval Operations Admiral Ⅱ

Ernest H. King: “I don’t know what the hell this logistics is that (Army Chief of Staff General George C.) Marshall is always taking about, but I want some of it.”

• Biblical – “I have heard of you…that light and under-standing

and excellent wisdom are found in you…I have heard that you give interpretations and solve problems…you shall be clothed with purple and have a

Logistics Definitions

• Utility – Providing time and place utility/value of materials and

products in support of organization objectives.

• Council of Logistics Management– That part of the supply chain process that plans, imple

ments, and controls the efficient, effective flow and storage of goods, services, and related information from point of origin to point of origin to point of consumption in order to meet customers’ requirements.

•

Logistics Definitions• Component

– Supply management for the plant (inbound logistics) and distribution management for the firm’s customers (outbound logistics) or material support of manufacturing and product support of marketing operations.

• Functional– Materials requirement determination, purchasing, tran

sportation, inventory management, warehousing, materials handling, industrial packaging, facility location analysis, distribution, return goods handling, information management, customer service, and all other activities concerned with supporting the internal stores) with product customer (manufacturing)with materials and the external customer (retail stores) with product.

• Common culture – Handling the details of an activity.

Logistics lies in making the best use of resources

• Resources-based perspective– A sort of enterprise logic which lay emphasis on the core

capability and invisible asset – Enterprise as a combination of visible and invisible asset.

(Collis and Montgomery, 1995) • Resources hierarchy model

– The logistics role includes acquiring resource formally, owning resource necessarily, mobilizing resource positively, managing resource systematically, and using the resource functionally.

• Logistics as a philosophy– A philosophy in the use of resources– Lead the modern managers to make good use of the internal

and external resources in the traditional enterprise, reengineer the corporation effectively with careful calculation, and leap over the boundaries of traditional corporations so as to propose new operation model as well as recreate new business opportunity of logistics and turn into high-quality businesspersons.

Resources hierarchy model

using ……………….. functionally

managing …………….systematically

mobilizing…………… positively

Owning……………... necessarily

Acquiring……………. formally

resource

Logistics stresses the use of tools for fluent delivery

• Tools– Communication tools – Storage Facility – Transport system – Information technology – Regulation system

• The future development in logistics field will also advance with the improvement of technology

The best use of human resource

• Human resources– Personal competence– Corporation capability

• Logistics is also a science and an art in making use of human resource for accomplishing the task commissioned by the clients with personal competence and corporation capability

• Waste no talent

An integrated logistics management system

• Supply system

• Customer system

• Business system

• Goods-flow system

• Information system

• Cash flow system

A teaching and research framework

The Best Achievement among Generations Ever

• Sustained business is the basic hypothesis of enterprises

• Sustained competitive advantage could be “The Best Achievement among Generations Ever.”

• Logistics depends on logistics support in accomplishing “The Best Achievement among Generations Ever”

The future development of logistics

• Logistics is a sort of philosophy in using resources, including human resources, tools, and material

• Logistics is a sort of strategic planning for developing sustained competitive advantage

• Logistics is an fully integrated support management system

• Logistics is a sort of new classical business model for meeting the customers’ needs with careful calculation

Summary

• The new paradigm• Logistics is logic, wisdom, calculations, models,

networks, inventories, transportation, distribution, customer service, time-and-place utility, storage, flow, details, optimization, and collaborating.

• A set of support activities• Being responsive to customer requirements for

materials, goods, and services• A science of developing and managing the

capabilities an protocols that are responsive to customer-driven service requirements.

The end

Thanks for your listening!!