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basics of logistics study

basics of logistics study

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Published by manujainiips8133
it cotains basics of logistics industry
it cotains basics of logistics industry

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Published by: manujainiips8133 on Apr 12, 2009
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07/05/2013

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Logisticsis the management of the flow of goods, information and other resources, includingenergy and people, between the point of origin and the point of consumption inorder to meet the requirements of consumers (frequently, and originally, militaryorganizations). Logistics involve the integration of information, transportation,inventory, warehousing, material-handling, and packaging. Logistics is a channelof the supply chain which adds the value of time and place utility.Origins and definitionThe term "logistics" originates from the ancient Greek "" ("logos"—"ratio,
λόγος
 word, calculation, reason, speech, oration").Logistics is considered to have originated in the military's need to supplythemselves with arms, ammunition and rations as they moved from their base to aforward position. In ancient Greek, Roman and Byzantine empires, there weremilitary officers with the title ‘Logistikas’ who were responsible for financialand supply distribution matters.The Oxford English dictionary defines logistics as: “The branch of militaryscience having to do with procuring, maintaining and transporting material,personnel and facilities.”Another dictionary definition is: "The time relatedpositioning of resources." As such, logistics is commonly seen as a branch ofengineering which creates "people systems" rather than "machine systems"....Military logisticsIn military logistics, logistics officers manage how and when to move resources tothe places they are needed. In military science, maintaining one's supply lineswhile disrupting those of the enemy is a crucial—some would say the most crucial—element of military strategy, since an armed force without resources andtransportation is defenseless.The defeat of the British in the American War of Independence, and the defeat ofErwin Rommel in World War II, have been largely attributed to logistical failure.The historical leaders Hannibal Barca Alexander the Great and the Duke ofWellington are considered to have been logistical geniuses.Another field within logistics is called Medical logistics.Logistics managementMain article: Logistics ManagementLogistics management is that part of the supply chain which plans, implements andcontrols the efficient, effective forward and reverse flow and storage of goods,services and related information between the point of origin and the point ofconsumption in order to meet customers' requirements. A professional working inthe field of logistics management is called a logistician.The Chartered Institute of Logistics & Transport (CILT) was established in theUnited Kingdom in 1919 and was granted the Royal Charter in 1926. The CharteredInstitute is one of professional bodies or institutions for the logistics &transport sectors, that offers such professional qualification or degree inlogistics management.Definitions of logistics outsourcing (3PL)Logistics outsourcing, or third-party logistics (3PL), involves the utilization ofexternal organizations to execute logistics activities that have traditionallybeen performed within an organization itself. According to this definition, thirdparty logistics includes any form of outsourcing of logistics activitiespreviously performed in-house. If, for example, a company with its own transportfacilities decides to employ external warehouse specialist, this would be anexample of third party logistics.Another definition has it as “long and short-term contracts of alliances betweenmanufacturing and service firms and third-party logistics providers.” Thisdefinition has been largely used on the needs that firm characteristics influencethe decision to contract multiple third-party logistics services, and therefore,firms have to obtain cost savings and to concentrate on their core competencies.
 
The agreement also becomes more formalized with mutual commitments from bothparties. In such partnerships the partners attempt to keep their autonomy, whileat the same time collaboration is vital to develop more efficient results.Sometimes, the agreement specifies that the external service provider fully orpartly takes responsibility over personnel, equipment and plant of the clientfirmhSimilar to the above definition, Hertz and Alfredsson simply stated that logisticsoutsourcing involves “an external provider who manages, controls, and deliverslogistics activities on behalf of a shipper”. The purpose is that both partiesdevelop a mutually beneficial and continuous strategic relationship and all or apart of the logistics activities are performed in a satisfactory way for thepartners, with the guarantee of the quality of performance and benefits involved.Nevertheless, to understand the concept of logistics outsourcing, there are fivelevels of logistics outsourcing, as follows: 1) In-house logistics or in sourcinglogistics, or reverse outsourcing: means that the firm operates its logisticsactivities in-house. 2) Logistics service provider (LSP), or asset-based logistics(2PL): means the management of traditional logistics functions, such as transportand warehouse. 3) Third-party logistics (3PL/TPL), or forwarding logistics, orcontract logistics: This can be also a close relationship between a firm and alogistics provider not only to operate the logistics tasks but also the sharing ofinformation, risks and benefits under long-term contract. 4) Fourth-partylogistics (4PL/FPL), or supply chain logistics, or lead logistics provider (LLP):4PL has been viewed as a single contact that manages and integrates all kinds ofresources and directs 3PL function along the supply chain with the sense ofstrategic advantages, and long-term relationship. 5) Fifth-party logistics (5PL):means serving the electronic business (e-business) market. Those 3PL and 4PLproviders manage all the parties in the supply chain on electronic commerce (e-commerce). They key to success in this area is the information technology andinformation systems.Clarification of definitions of third-party logisticsIn addition to the definitions of logistics outsourcing as given above, the termthird party, as well as that of fourth party, can be quite confusing, thusLynch[5] (2000), refers to the outsourcing of logistics activities to firms thatare capable of providing the services, rather than to third-party or fourth-partylogistics providers (3PLs and 4PLs respectively).Nevertheless, the use of the term third-party logistics (3PL) is risingconsiderably and therefore further discussion is needed. However third-partylogistics are better defined and exemplified as follows: “A 3PL is a relationshipbetween a shipper and third party which, compared with basic services, has morecustomised offerings, encompasses a broader number of service functions and ischaracterised by a longer-term, more mutually beneficial relationship” (Murphy and“A 3PL is a logistics service provider,Poist, 2000, pg. 122). usually asset-based, which focuses on specific elements of the supply chain in order to optimisethe physical movement of goods from the point-of-origin to the end-user” (Stockand Lambert, 2001, pg. 5).According to the definitions above, the 3PL provider specialises in a range oflogistics services with the purpose to sell or perform these services to firmsthat are involved in manufacturing and distribution activities (Baziotopoulos,2008). For example, small trucking companies are not 3PLs; however, some 3PLs owntransportation and other assets to perform logistics needs while others do not.While many definitions suggest that 3PL involves the provision of multipledistribution activities, they often do not include the concept of longer term,mutually beneficial relationships between the parties. Therefore, while logisticsactivities, in particular, transportation and warehousing, have been outsourced tothird parties, generally on a transaction-by-transaction basis, the characteristicof the 3PL is that it, by contrast, is focused on a “formal, contractual, long-term relationship between the provider and the user” (Murphy and Poist, 2000, pg.122).

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