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Logistics is a part of supply chain management that deals with the efficient forward and reverse flow of goods, services, and related information from the point of origin to the point of consumption according to the needs of customers.[2][3] Logistics management is a component that holds the supply chain together.[3] The resources managed in logistics may include tangible goods such as materials, equipment, and supplies, as well as food and other consumable items.


In military logistics, it is concerned with maintaining army supply lines with food, armaments, ammunitions, and spare parts apart from the transportation of troops themselves. Meanwhile, civil logistics deals with the acquisition, movement, and storage of raw materials, semi-finished goods, and finished goods. For organisations that provide services such as garbage collection, mail deliveries, public utilities, and after-sales services, logistical problems also need to be addressed.[2]

Logistics deals with movements of materials or products from one facility to another (e.g. from the production facility to assembly plants to distribution centers); it does not deal with the material flow within the production or assembly plants (e.g. production planning or single-machine scheduling).[2] Logistics occupies a significant amount of the operational cost of an organisation or country. For example, logistical costs of organizations in the United States incurred about 11% of United States national gross domestic product (GDP) in 1997. Such a situation is also similar for the countries in the European Union (EU) where logistics incurred 8.8 to 11.4% of the national GDP in 1993.[2]

The complexity of logistics can be modeled, analyzed, visualized, and optimized by dedicated simulation software. The minimization of the use of resources is a common motivation in all logistics fields. A professional working in the field of logistics management is called a logistician.

Formerly the officers of the general staff were named: marshall of lodgings, major-general of lodgings; from there came the term of logistics [logistique], which we employ to designate those who are in charge of the functioning of an army.

The French word: logistique is a homonym of the existing mathematical term, from Ancient Greek: λογῐστῐκός, romanized: logistikós, a traditional division of Greek mathematics; the mathematical term is presumably the origin of the term logistic in logistic growth and related terms. Some sources give this instead as the source of logistics,[6] either ignorant of Jomini's statement that it was derived from logis, or dubious and instead believing it was in fact of Greek origin, or influenced by the existing term of Greek origin.

The Oxford English Dictionary defines logistics as "the branch of military science relating to procuring, maintaining and transporting material, personnel and facilities". However, the New Oxford American Dictionary defines logistics as "the detailed coordination of a complex operation involving many people, facilities, or supplies", and the Oxford Dictionary on-line defines it as "the detailed organization and implementation of a complex operation".[7] As such, logistics is commonly seen as a branch of engineering that creates "people systems" rather than "machine systems".

According to the Council of Supply Chain Management Professionals (previously the Council of Logistics Management),[8] logistics is the process of planning, implementing and controlling procedures for the efficient and effectivetransportation and storage of goods including services and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements and includes inbound, outbound, internal and external movements.[9]

Academics and practitioners traditionally refer to the terms operations or production management when referring to physical transformations taking place in a single business location (factory, restaurant or even bank clerking) and reserve the term logistics for activities related to distribution, that is, moving products on the territory. Managing a distribution center is seen, therefore, as pertaining to the realm of logistics since, while in theory, the products made by a factory are ready for consumption they still need to be moved along the distribution network according to some logic, and the distribution center aggregates and processes orders coming from different areas of the territory. That being said, from a modeling perspective, there are similarities between operations management and logistics, and companies sometimes use hybrid professionals, with for example a "Director of Operations" or a "Logistics Officer" working on similar problems. Furthermore, the term "supply chain management" originally referred to, among other issues, having an integrated vision of both production and logistics from point of origin to point of production.[10] All these terms may suffer from semantic change as a side effect of advertising.

Logistical activities can be divided into three main areas, namely order processing, inventory management, and freight transportation. Traditionally, order processing was a time-consuming activity that can take up to 70% of the order-cycle time. However, with the advent of new technologies such as bar code scanning, computers, and network connection, orders from customers can quickly reach the seller in no time and the availability of stocks can be checked in real-time. The purpose of having an inventory is to reduce the overall logistical cost while improving service to customers. Having a stockpile of finished goods beforehand can reduce the frequency of transportation to and from the customers and cope with the randomness of customer demands. However, maintaining an inventory requires capital investment in finished goods and maintaining a warehouse. Storage and order picking occupies for most of the warehouse maintenance cost. Freight transportation forms the key part of logistics and allows access to wide markets as goods can be transported to hundred or thousands of kilometers away. Freight transportation accounts for two-thirds of logistical costs and has a major impact on customer service. Transportation policies and warehouse management are closely intertwined.[2]

The rise of commercial transactions through the internet give rise to the need of "e-logistics". Compared to traditional logistics, e-logistics handle parcels that are valued at less than a hundred US dollars to customers scattered at various destinations around the world. In e-logistics, customers' demands come in waves, when compared to traditional logistics where the demand is consistent.[2]

Inbound logistics is one of the primary processes of logistics concentrating on purchasing and arranging the inbound movement of materials, parts, or unfinished inventory from suppliers to manufacturing or assembly plants, warehouses, or retail stores.

Procurement logistics consists of activities such as market research, requirements planning, make-or-buy decisions, supplier management, ordering, and order controlling. The targets in procurement logistics might be contradictory: maximizing efficiency by concentrating on core competences, outsourcing while maintaining the autonomy of the company, or minimizing procurement costs while maximizing security within the supply process.

Global logistics is technically the process of managing the "flow" of goods through what is called a supply chain, from its place of production to other parts of the world. This often requires an intermodal transport system, transport via ocean, air, rail, and truck. The effectiveness of global logistics is measured in the Logistics Performance Index.

Distribution logistics has, as main tasks, the delivery of the finished products to the customer. It consists of order processing, warehousing, and transportation. Distribution logistics is necessary because the time, place, and quantity of production differ with the time, place, and quantity of consumption.[11]

Reverse logistics denotes all those operations related to the reuse of products and materials. The reverse logistics process includes the management and the sale of surpluses, as well as products being returned to vendors from buyers. It is "the process of planning, implementing, and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. More precisely, reverse logistics is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. The opposite of reverse logistics is forward logistics."[This quote needs a citation]

Green logistics describes all attempts to measure and minimize the ecological impact of logistics activities. This includes all activities of the forward and reverse flows. This can be achieved through intermodal freight transport, path optimization, vehicle saturation and city logistics.

Asset control logistics: companies in the retail channels, both organized retailers and suppliers, often deploy assets required for the display, preservation, promotion of their products. Some examples are refrigerators, stands, display monitors, seasonal equipment, poster stands & frames.

The term production logistics describes logistic processes within a value-adding system (ex: factory or a mine). Production logistics aims to ensure that each machine and workstation receives the right product in the right quantity and quality at the right time. The concern is with production, testing, transportation, storage, and supply. Production logistics can operate in existing as well as new plants: since manufacturing in an existing plant is a constantly changing process, machines are exchanged and new ones added, which gives the opportunity to improve the production logistics system accordingly.[14] Production logistics provides the means to achieve customer response and capital efficiency. Production logistics becomes more important with decreasing batch sizes. In many industries (e.g. mobile phones), the short-term goal is a batch size of one, allowing even a single customer's demand to be fulfilled efficiently. Track and tracing, which is an essential part of production logistics due to product safety and reliability issues, is also gaining importance, especially in the automotive and medical industries. 041b061a72


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