Milton Herrera Ph.D.

Perspective on the Evolution of Logistics Thought1

Milton M. Herrera Ph.D.

1Sources: Kent and Flint (1997). Perspective on the Evolution of Logistics Thought.
Journal of Business Logistics. Vol. 18 Nº 2
Logistics Definitions

Logistics, then known as physical distribution, first appeared in the academic

literature in the early 1900s.
1927_ “there are two uses of the word distribution which must be clearly differentiated
….. First, the use of the word to describe physical distribution such as
transportation and storage. Second, the use of the word distribution to describe
what is better termed marketing”.
1967_ “A term employed in manufacture and commerce to describe the broad range
of activities concerned with efficient movement of finished products”.
1976_ “the efficient flow of raw materials, in process-inventory and finished goods from
point-of-origin to point-of-consumption.”
1985_”the efficient cost-effective flow and storage of raw material, in process-
inventory, finished good and related information from point-of-origin to point-of-
consumption”
1992_”the efficient, effective flow and storage goods, and service and related
information from point-of-origin to point-of-consumption”
https://learningapps.org/display?v=pjr8yth6a20
Eras identified for the evolution of logistics thought:

a) Farm to market
b) Segmented functions
c) Integrated functions
d) Customer focus
e) Logistics as a differentiator.
f) Behaviour and boundary spanning

https://learningapps.org/display?v=ptjid7ds320
Farm to market (1916 -1940) – Segmented functions (1940 -1960)
Agricultural Economics – Military

• Farm to market • Independent Functional Areas:

• Transportation • Physical distribution
• Steam Engine • Internal combustion

Integrated functions (1960 -1970) Customer Focus (1970 -1980) –

– Industrial Economics Management Sciences

• Total cost • Customer service

• Systems approach • Inventory carrying
• Integration of logistics • Productivity
• Link node
Logistics as a differentiator (1980 - Behavioural and Boundary
Present) – Information Spanning (Future) – Marketing
Technology – Management and Social Sciences
Strategy
• Service response logistics
• Integrated supply
• Behavioural aspects of interfirm
• Logistics channel
• Theory Development
• Globalization
• Reverse Logistics
• Environmental Logistics

https://www.storyboardthat.com/
The logistics program can be classify as following:

• Marketing/Logistics
• Operations Management/Logistics
• Engineering Mathematical Modelling/Logistics
• Stand-alone Business logistics
Discussion in classroom

Who was the first logistic?

How was called the Jomini’s book?

Which was the World War that allows to start logistics?

What was the problem in the build of American ships (Liberty)?

Is Nicholas Biddle’s Bank of the U.S. the best example for?

The paper by Arc Shaw in 1916 contributed to a new concept for logistics, how
was called the new concept?
https://learningapps.org/display?v=pjk9xbdz520
 Customer Inventory Handle
service management material
Storage
Purchase

Support
Key Activities
Activities

Transport
Packing
Order delivery Schedule
and information
Data analysis
flows
 Reading review - First

https://forms.gle/mskdh4YGL3dcMQSm6
Discussion in classroom

Why is important the supply chain networks?

What is my role in the supply chain management?

How could you measure the performance of the

Supply Chains?

https://www.youtube.com/watch?v=yyuWyEYH7CY&t=41s
Case study:

a. Gateway: fabricante de ventas directas

b. Zara: Fabricante y vendedor de ropa
c. WW Grainger y McMaster-Carr:
proveedores de productos e
mantenimiento, reparación y operación.
d. Toyota: Un fabricante de autos global
e. Amazon.com: Una empresa electrónica

https://www.storyboardthat.com/
Weeks of supplies

Average of aggregated inventory (US$)

Sales weeks
Return on logistics assets

Increase of revenue – Operational logistics cost

Logistics assets
Discussion in classroom
Suponga que un fabricante de camisetas para hombre puede producir una
camisa de vestir en su planta de Houston, Texas, a US$8 por camisa
(incluye el costo de la materia prima). Chicago es un mercado importante
con 100,000 camisas al año. La camisa tiene un precio de US$ 15 en la
planta de Houston. Los cargos de transporte y de almacenamiento desde
Houston a Chicago son de US$5 por cada 100 kilogramos. Cada camisa
empacada pesa 0,45 kilogramos.
Como alternativa, la compañía puede teneer las camisas producidas de
Taiwan a US$4 por unidad (incluyendo costo de materia prima). La materia
prima pesa 0,45 kilogramos por camisa, y sería embarcada de Houston a
Taiwan a un costo de US$2 por cada 100 kilogramos. Cuando las camisas
estuvieran fabricadas, se embarcarían directamente a Chicago a un costo
de transporte y almacenamiento de US$6 por cada 100 kilogramos. Se
grava un derecho de importación de US$0.50 por camisa.
a. Desde el punto de vista del costo de logística/ producción, ¿se deberían
producir las camisas en Taiwán?
b. ¿Qué otras consideraciones, además de las económicas, podrían
tenerse en cuenta antes de tomar una decisión final?

Fuente: Ballou, R. (2004). Logística: administración de la Cadena de

Suministro. Pearson Prentice Hall. 5th edición, pag. 31
 Calculating the average time in inventory or average
flow time within the supply chain is (Little's Law):

Nota: La parte del numerador determina el Inventario estacional promedio de la

cadena de suministro. El Ingreso durante el tiempo de planeación será igual al
precio de las Unidades por el pronóstico de la demanda, el cual se compara
con los costos para determinar la utilidad en la Cadena de Suministro.
Key concepts of the ERP structure
Key concepts: organizational structure of logistics companies