LOGISTICS

Logistics is the set of functions associated with the flow of goods, information and payments among suppliers and consumers from the origination of raw material to final recycling or disposal of finished goods. Supply chains are the physical infrastructures including suppliers, plants, warehouses, customers and transportation within which these flows occur.

A definition of logistics by the Council of Logistics Management is as follows:
Logistics is the combination of transport, storage and control of material all the way from the supplier, through the various facilities, to the customer, and the collection of recyclable materials at each step.
It is interesting that the environmental dimension is part of today's logistics. Logistics functions are integrated and comprehensive, as illustrated in the next figure:

Importance of Logistics

Logistics represents a significant and growing segment of the United States economy, accounting for more than $700 billion annually. Logistics comprises

Logistics plays a critical role in global trade which is expected to more than quadruple by 2010. Increasingly, companies view logistics as a crucial element in their corporate strategy. If companies are to meet customer demands for responsiveness, customization, quality, and value, they must link their entire supply chain into a highly integrated and efficient logistics system.

Engineering Logistics

Engineering logistics uses scientific principles, mathematical models, and information technology as fundamental tools to design supply chains, plan logistics processes, and operate logistics systems.

Engineering logistics and business logistics are complimentary but fundamentally different. Business logistics is more focused on how to manage logistics processes and relationships. Practice assessments, behavioral propositions, and management concepts are typical outputs from business logistics research, while design concepts, decision support models and computer software are typical outputs from engineering logistics research. Educational programs for engineering logistics have evolved primarily in Industrial Engineering departments while educational programs for business logistics have evolved primarily in Marketing departments. As a result, the two disciplines have traditionally approached logistics from very different perspectives.

Since 1990, there has been a dramatic increase in the implementation of information technology to support logistics functions. This has created a critical demand for new decision technology to take advantage of the increased information. It has also created a demand for people with both the engineering knowledge necessary to integrate this new technology into seamless logistics systems and the business knowledge needed to integrate this new technology with business practices. Hence, there is a need for business logistics and engineering logistics to coalesce around decision and information technology.