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LEARNING OBJECTIVES
• Understand the role and importance of logistics in private and public organizations.
• Discuss the impact of logistics on the economy and how effective logistics management
contributes to the vitality of the economy.
• Understand the value-added roles of logistics on both a macro and micro level.
• Understand the relationship between logistics and other important functional areas in an
organization, including manufacturing, marketing, and finance.
• Determine the total costs and understand the cost tradeoffs in a logistics system.
CHAPTER OVERVIEW
Introduction
Logistics is misunderstood and often overlooked with the excitement surrounding supply
chain management and all of the related technology that has been developed to support
the supply chain. The glamour associated with the e-supply chain, e-tailing, e-business,
and so on, seems to overshadow the importance of logistics in an organization and the
need for efficient and effective logistics support in a supply chain.
The concepts of supply chain management and logistics must be compared or, more
appropriately, related to each other. Supply chain management has been defined using a
pipeline analogy with the start of the pipeline representing the initial supplier and the end
of the pipeline representing the ultimate customer.
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© 2013 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be
different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
Even with increased recognition of the term logistics, however, there is still confusion
about its definition. Some of the confusion can be traced to the fact that a number of
terms are used by individuals when they refer to what has been described as logistics.
Logistics management is the most widely accepted term and encompasses logistics not
only in the private business sector but also in the public/government and nonprofit
sectors.
For the purposes of this text, the definition offered by the Council of Supply Chain
Management Professionals (formerly the Council of Logistics Management) is utilized:
“The art and science of management, engineering, and technical activities concerned with
requirements, design, and supplying and maintaining resources to support objectives,
plans, and operations.”
The logistics concept began to appear in the business-related literature in the 1960s under
the label of physical distribution, which had a focus on the outbound side of the logistics
system. During the 1960s, military logistics began to focus on engineering dimensions of
logistics—reliability, maintainability, configuration management, life cycle management,
and so on—with increased emphasis on modeling and quantitative analysis.
In the twenty-first century, logistics should be viewed as a part of management and has
four subdivisions:
• Business logistics: That part of the supply chain process that plans, implements, and
controls the efficient, effective flow and storage of goods, service, and related
information from point of use or consumption in order to meet customer requirements.
• Military logistics: The design and integration of all aspects of support for the
operational capability of the military forces (deployed or in garrison) and their equipment
to ensure readiness, reliability, and efficiency.
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different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
Role of Logistics in Supply Chains Chapter 2
• Event logistics: The network of activities, facilities, and personnel required to organize,
schedule, and deploy the resources for an event to take place and to efficiently withdraw
after the event.
• Service logistics: The acquisition, scheduling, and management of the facilities/ assets,
personnel, and materials to support and sustain a service operation or business.
Form Utility: Form utility refers to the value added to goods through a manufacturing or
assembly process.
Place Utility: Logistics provides place utility by moving goods from production surplus
points to points where demand exists.
Quantity Utility: Today’s business environment demands that products not only be
delivered on time to the correct destination but also be delivered in the proper quantities.
Possession Utility: Possession utility is primarily created through the basic marketing
activities related to the promotion of products and services.
Logistical Activities
The responsibility of the logistics manager includes a number of activities. The number
and importance of these activities to the business varies according to the particular
emphasis placed on the logistics function.
Traffic and Transportation involves the physical movement or flow of raw materials
or finished goods and involves the transportation agencies that provide service to the
firm.
Warehousing and Storage involves two closely related activities: inventory
management and warehousing. A direct relationship exists between transportation and
the level of inventory and number of warehouses required. It is important to examine
the trade-offs related to the various alternatives in order to optimize the overall
logistics system.
Industrial Packaging involves the necessary packaging needed to move the product to
the market. Logistics managers must analyze the tradeoffs between the type of
transportation selected and its packaging requirements.
Materials Handling is important to efficient warehouse operation and concerns the
mechanical equipment for short-distance movement of goods through the warehouse.
Order Fulfillment consists of the activities involved with completing customer orders.
Order fulfillment concerns the total lead time from when the order is placed to actual
delivery in satisfactory condition.
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different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
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“I find here still the Jews. The same precise account of their
arrival and taking up their residence in the valleys of Atlas. One is
here from Jerusalem begging alms, unusual amongst the Jews. He
is advanced in years, quite blind, and has kept constant pace with
me, taking advantage of my escorts from Tangier to this place: is
anxious to get to Arowan,[160] where there is a very learned Rabbi. I
cannot help him; my means will not allow me. They ask nearly as
much for his passage as my own; having a greater fear of the Jews
getting to Soudan than the Christians. I trust by this time your Royal
Highness has recovered your perfect sight, hoping that about the
period of this letter’s reaching England, your Royal Highness will
have received the copies of the inscriptions from the tombs of the
district of Mesfywa. I can hardly expect the copy of the record from
Couba or Kobba will reach Morocco till the end of the autumn, when
the Rabbi told me he should be returning, and would deliver it to the
Consular Agent, the Jew Courkoss, to whom I have several times
written. My companion begs most respectfully to present his duty,
and hopes your Royal Highness will deign to receive the few lines
from his pen, which he begs me to enclose. I am sorry to say I have
great fears for his health; he cannot bear fatigue, and has been
attacked with ophthalmia. The whole of the Soudan people know
him, and tell me he will prove a certain passport; that he is a cousin
of Hamed Libboo; and another of his cousins, Ali, called Koutouk,
the warrior, is now king of Kong, and that many of his family are at
Kong, all rich and in power.
“Hoping this will find your Royal Highness in the enjoyment of
perfect health, and trusting shortly to have the honour of addressing
your Royal Highness from Soudan,
“I have the honour to be, &c. &c.
“John Davidson.”
“‘Even now,’ he adds, ‘after waiting for the Cafila, which will be
immense, near 400 men, and, they say, 2,000 camels, I am not even
going with it. I should, by all accounts, as a Christian and a doctor,
be worried to death. I go straight from this to Arowan, never touching
the Cafila route at all; we shall not see a single tent. There are some
wells, known only to two or three of the guides. We take five naggas
(she camels) for milk, the five men, and Mohammed El Abd, some
zimēta (barley meal). I take the biscuit for Abou and self; each
carries a skin of water, to be touched only if the milk fails: thirty days
to bring us to Arowan, and five more to Timbuctoo.’
“I have made the above extracts to assure you that the
arrangements were made, and Mr. Davidson ready to start at a
moment’s notice, and that in the course of two or three days I hope
to have the pleasure to acquaint you of his having proceeded on his
journey. Once away from Wád Nún, and I have every and the fullest
confidence of his efforts being crowned with success.
“I have the honour to be, Sir,
“Your most obedient servant,
“Wm. Willshire.”
“P.S.—I open this letter to add, I have received a letter from Mr.
Davidson, dated Saturday, the 5th inst., who appears in high spirits,
and writes,—
“‘The start is to be on Monday, although I do not go on that day;
everything is now packed up, and placed ready to be put on the
camels, with which Abou starts at day-break on Monday. I am to be
left here, as if having sent him on. Mohammed El Abd remains
behind. On Wednesday or Thursday, according to the distance made
by the camels on the first day, we start on horseback, accompanied
by Beyrock and about six horsemen, and are to make Yeisst, if
possible, in one day. Here I leave the district of Wadnoon. And to this
place is three days’ journey for loaded camels. I here leave my horse
and mount my camel, and we push on to the tents.’
“Mr. Davidson did not start on a sudden, on the 3d inst., as stated
to me by a courier, who brought me a letter from him of that date,
and which I reported in a letter I had the honour to address to his
Majesty’s secretary of state, Viscount Palmerston, on the 8th inst.,
and which you will oblige me by correcting and making known to his
lordship.
“Your most obedient servant,
“W. W.”
The following extracts from Mr. Willshire’s letters will give all the
intelligence received respecting the sequel of Mr. Davidson’s
expedition:—
Society of London:—
“To the Noble Prince, exalted by the Lord, Mulai Abd Errachnan ben
Hussein, whom God protect.
“An English gentleman having arrived at Gibraltar within a few
days past, as bearer of a letter, which he is charged to deliver to his
Imperial Majesty, from the King my most gracious sovereign, may it
please your Imperial Majesty to deign to cause me to be informed
when and where it may be convenient for your Imperial Majesty to
receive the bearer of the royal letter.
“Peace—this 20th day of September, in the year of Christ 1835
(26th Joomad the 1st, 1251).
“Edw. Drummond Hay,
“H. B. M.’s Agent and Consul-General in Morocco.”
“In the name of the merciful God, and there is no power or
strength but in God the high and excellent.
“To the faithful employed Drummond Hay, Consul for the English
nation—this premised—
“Your letter has reached our presence, exalted of God, regarding
the gentleman who arrived at Gibraltar with a letter from the Pre-
eminent of your nation; in consequence whereof, if he please to
deliver the letter to our employed, the kaid ............[202] Essedy, for the
purpose of being forwarded to our presence, exalted of God, he may
do so; but if he wish to bear it himself, he is to proceed to Swerrah
by sea, and thence he may come to our high presence, since the
voyage by sea is more convenient than that by land, and the journey
from the said port to our presence is short.
“Peace—11th Joomad the 2d, 1251 (4th October, 1835).
THE END.
LONDON:
Printed by J. L. Cox and Sons, 75, Great Queen Street,
Lincoln’s-Inn Fields.
FOOTNOTES: