Concepts of Logistics and Distribution

PART ONE Concepts of logistics and distribution

Introduction to logistics and distribution

Introduction

The key components of logistics - transport, inventory, warehousing - have been fundamental elements of industrial and economic life for countless years. However, these components and their sub-functions were treated as individual elements and rarely as part of a bigger and broader concept whereby they are connected together to provide the means to an end. That end is the satisfactory supply of goods or products to a customer at an acceptable time and an acceptable cost. Thus, in those early years, logistics was not recognized as a major business function in its own right. The main reason for this is the nature of logistics itself. It is a function made up of many sub-functions and many subsystems, each of which has been, and may still be, treated as a distinct management operation. Both the academic and the business world accept that there is a need to adopt a more holistic view of these different operations in order to take into account how they interrelate and interact with one another and to ensure that the overall operation, whatever it may be, is optimized.

The appreciation of the scope and importance of logistics and the supply chain has led to a more scientific approach being adopted towards the subject. This approach has been aimed at the overall concept of the logistics function as a whole but, importantly, also includes the interrelationship of the individual subsystems. Much of this approach has addressed the need for, and means of, planning logistics and the supply chain, but has necessarily included the consideration of the major operational issues as well.

Continuous advances in technology and the development of new ideas and concepts, however, mean that there is a constant change in thinking with regard to the most effective approaches that should be adopted for logistics and the supply chain. Some of these key ideas and issues are described in Chapter Five. This first chapter of the book provides an introduction to the very basic aspects of distribution, logistics and the supply chain. Initially there is a review of the scope and definition of distribution, logistics and the supply chain. Next is a discussion of the key elements that are fundamental to the logistic function. A brief description of the historical growth of distribution and logistics is followed by an assessment of its importance throughout the world. Finally, a typical distribution and logistics structure is described and discussed.