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Retail / Logistics


Logistics is the art and science of managing and controlling the flow of goods, energy, information and other resources.

The term logistics has evolved from the military's need of spare-parts supply, but is now widely accepted to include activities like purchasing, transport, warehousing, organizing and planning of these activities. Logistics managers need general knowledge of each of these functions, and specific knowledge of the industry, commodity, or business protocols governing the product types being managed.

In business, logistics may have either internal focus, or external focus covering the flow from originating supplier to end-user, see supply chain management.

In military, logistics experts manage how and when to move resources to the places they are needed. In military science, maintaining one's supply lines while disrupting those of the enemy is a crucial, and some would say the most crucial element, of military strategy (since an armed force without food/fuel and ammunition is rather useless).

There are two fundamentally different forms of logistics. One optimizes a steady flow of material through a network of transport links and storage nodes. The other coordinates a sequence of resources to carry out some project.


Logistic flow

Steady-state flow systems are usually optimized for one of several goals: avoid shortages of the object (in military systems, especially for fuel and ammunition), minimize transportation cost, minimum time to obtain an object, or minimum total storage (time and amount) of objects (to minimize the interest losses of in-storage inventory). Logistic flow is particularly important in just in time manufacturing in which great emphasis is placed on minimizing inventory.

A recent trend in large distribution chains is to assign these goals to individual stock items, rather than optimizing the entire system for one goal. This is possible because the plans usually describe stock amounts to be stored at particular locations, and these vary depending on the strategy.

The basic method of optimizing a steady-state distribution system is to use a minimum spanning tree to characterize the transport network, and then place storage locations at the nodes, sized to handle the minimum, average, or maximum demand of items.

Quite often, the demand is limited by the transportation capacity out of the node's storage location. When the transportation out of a storage node exceeds its storage or incoming capacity, the storage is useful only to even out the amount of transportation per unit of time, to reduce peak loads on the transportation system.

Project logistics

Project logistics experts discover the sequence in which a project will use particular resources. They then arrange to send the resources so that they will arrive when needed. Generally, these plans use critical path analysis.

Many haulage organisations in Europe include the word "logistics" in their company name.

See also

  • 3PL
  • commercial vehicle operations
  • containerization
  • Defense Logistics Agency
  • distribution
  • food distribution
  • intelligent transportation system
  • information logistic
  • logistics automation
  • marketing
  • matériel
  • pallet
  • reverse logistics
  • supply chain management
  • trade route
  • traffic
  • transport
  • warehouse

Further reading

  • Creveld van, Martin. 1977. Supplying War: Logistics from Wallenstein to Patton. Cambridge: Cambridge University Press.
  • Engels, Donald W. 1978. Alexander the Great and the Logistics of the Macedonian Army. Berkeley: University of California Press.
  • Roth, Jonathan P. 1999. Logistics of the Roman Army at War (264 B.C. - A.D. 235). Leiden/Boston/Köln: Brill.

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