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Managing Logistics Systems
This textbook introduces logistics from a broad perspective to include all activities
throughout the product and service life cycle pertaining to supply chain and logistics
management, the physical supply and distribution of products, and the corresponding
maintenance and support.
It recognizes the mutual interdependence of the major functional areas of an organization
including marketing, production, and finance. The emphasis throughout the text is on
logistics in the context of a total business system design process. It views the business
as a ‘system,’ managing logistics within that system, and thus transforming their supply
chain. Pedagogy to aid learning is incorporated throughout every chapter, with chapter
objectives, case studies, and concept checks.
This text is intended for both upper-level undergraduate and lower-level graduate
students interested in both Business and Engineering on logistics and supply chain tracks.
It can also serve as a reference for practitioners actively engaged in day-to-day management
of logistics and supply chain activities.
Supplementary online resources include an instructors’ manual, chapter-by-chapter
PowerPoint slides, glossary, and a test bank of exam questions.
John M. Longshore is Associate Professor of Management within the David B. O’Maley

College of Business at Embry Riddle Aeronautical University, Daytona Beach, FL, USA.
Angela L. Cheatham is Assistant Professor of Management within the David B. O’Maley

College of Business at Embry Riddle Aeronautical University, Daytona Beach, FL, USA.
Managing Logistics Systems
Planning and Analysis for a Successful
Supply Chain
John M. Longshore and

Angela L. Cheatham
First published 2022
by Routledge
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and are used only for identification and explanation without intent to infringe.
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DOI: 10.4324/9781003128939
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Contents
1 An Overview of the Logistics System 1

The Scope of Logistics 1
The Economic Impact of Logistics 5
The Increased Importance of Logistics 6
Advances in Retailing 7
Technological Advances 7
Changes in Consumer Behavior 8
A Reduction in Economic Regulation 9
The Systems and Total Cost Approaches to Logistics 9
Relationships Within the Organization 11
Finance 11
Production 11
Marketing 12
Product Decisions 12
Pricing Decisions 12
Place Decisions 13
Promotional Decisions 13
The Need for Systems Logistics 14
Visibility 14
Summary 17
Chapter 1 Concept Questions 17
2 Logistics System Information Technology 19

Information and Logistics Systems Topologies 19
The Different Types of Information Management Systems 20
Office Support Systems 20
Transactional Processing Systems 22
Management Information Systems 23
Communications Systems 25
Decision Support Systems (DSS) 26
Enterprise Information Management Systems 27
Information Management System Challenges 29
Summary 31
vi Contents
Discussion Questions 33
3 The Measures of Supply Chain and Logistics System Support 35

Measuring Supply Chain and Logistics System Performance 35
Evolution of Metrics 35
Supply Chain and Logistics System Data Analytics 35
Supply Chain and Logistics System Measures of Effectiveness (MOEs) 36
Measurements and Metrics 43
Procurement and Material Flow Measures and Metrics 43
Transportation, Packaging, and Handling Measures and Metrics 43
Warehouse and Distribution Center Measures and Metrics 43
Summary 46
4 Demand Management, Order Management, and Customer

Service 53
Demand Planning and Management 53
Some Forecasting Realities 54
Demand Forecasting Techniques and Models 55
Demand Forecasting Challenges 56
Order Management 57
Customer Service 63
Customer Profitability Analysis 64
Service Failure and Service Recovery 65
Summary 67
5 Supply Chain and Logistics Systems Efficiency and

Effectiveness: Organizational and Managerial Design Impact 71
Supply Chain and Logistics Systems Structures 71
Organization Design for the Supply Chain and Logistics System 74
Managerial Issues in Supply Chain and Logistics System
Organizations 79
Managing and Measuring Productivity 79
Non-financial Measures 80
Managing and Measuring Quality 81
Managing and Measuring Risk and Security 83
Managing and Measuring Sustainability 85
Summary 86
Contents vii
6 Inventory Planning and Control 92
Inventory Planning and Control 92
Inventory Types and Classifications 92
Inventory Types 93
Inventory Classifications 94
Inventory Costs 94
Minimizing Total Inventory Cost 95
Economic Order Quantity (EOQ) Model 96
EOQ Basic Calculation 97
When to Order 98
Managing Inventory 101
Inventory Accuracy and Control 103
Vendor-Managed Inventory 106
Summary 107
7 Packaging, Containerization, and Materials Handling 111

The Functions of Packaging 111
Primary Functions 111
Secondary Functions 113
Packaging Design 113
Packaging Marks and Labels 115
Unitization and Palletization 117
Packaging Testing and Monitoring 120
Packaging and the Environment 121
Sustainable Packaging 121
Materials Handling 123
Special Handling Considerations 130
Summary 132
8 Warehouse Management and Operations 136

Introduction 136
Brief History of Warehousing 136
The Importance of Warehousing in a Supply Chain and Logistics System 138
Types of Warehouses 139
Warehouse Classification by Role in the Supply Chain and Logistics
System 140
Warehouses by Customer Classification 141
The Economic Impact of Warehousing 142
Warehouse Design and Layout 145
Warehouse Operations 148
viii Contents
Warehouse or DC Key Metrics 150
Summary 152
9 Transportation Systems Management 155

Transportation Systems 155
Transportation Systems in the United States 156
Transportation Modes and Cost Structure 157
Transportation Cost Structure 162
Transportation Economics 163
Transportation Pricing 165
Domestic Transportation Documents 166
International Transportation Documents 167
Transportation Performance Metrics 168
Summary 168
10 Supply Chain and Logistics System Network Design:

Distribution Network Design in the Supply Chain
and Logistics System 176
Supply Chain and Logistics System Network Design Decisions 178
Types of Distribution Networks 181
Models for Designing Network Configuration 186
Modeling Techniques Used in Facility Selection Decision Process 188
Summary 193
11 Aggregate Planning and Master Scheduling 197

Decision-Making 197
Process Decisions 197
The Planning and Scheduling Process Overview 200
Sales and Operating Plan Process 201
Integrated Business Planning (IBP) 203
Options Used to Influence Demand and Supply 203
Meeting Uneven Demand in Aggregate Planning 205
Master Production Schedule (MPS) 206
Order Fulfillment Manufacturing Production Strategies 206
Materials Requirements Planning (MRP) 207
MPS and MRP Execution 208
Summary 212
Contents ix
12 Reverse Logistics and Sustainability 217

Introduction 217
Activities and Cost Associated With Reverse Logistics 218
Product Return – The Reverse Logistics Process 220
Transforming Reverse Logistics Into a Profit Center 223
Drivers in Reverse Logistics – System Network Design Considerations 224
Reverse Logistics Management 225
Challenges in Reverse Logistics 228
Reverse Logistics and Sustainability 229
Reverse Logistics Role in the Circular Economy 230
Summary 232
13 Supply Chain and Logistics Management in the System Life Cycle 236
Introduction 236
Supply Chain and Logistics Program Planning 236
Development of the Work Breakdown Structure (WBS) 248
Scheduling Supply Chain and Logistics System Activities 250
Organizing for Supply Chain and Logistics System Management 255
Integrated Product and Process Development (IPPD) 260
Staffing the Organization 263
Controlling 263
Summary 265
14 The Lean, Agile, and Hybrid Supply Chain and Logistics Systems 271
Lean, Agile, and Hybrid Defined 271
Brief History of Lean 271
Lean Tools 277
Summary 287
Index292
1 An Overview of the Logistics
System
The Scope of Logistics

The principles and concepts of logistics stem from specific facets of activity within both
the commercial and federal sectors. There are different perspectives of logistics, with vari-
ations of key elements. Logistics is the coordination of complex operations, including pro-
curement, transportation, maintenance, and operations affecting the effective and efficient
movement of goods throughout the supply chain (Haq, 2006).
Logistic activities include (1) the identification and management of suppliers and pro-
curement and order processing and physical supply of materials and/or services from
sources of supply to the manufacturer or producer; (2) the materials handling and inven-
tory management of materials and/or services during and throughout the manufactur-
ing process; and (3) the subsequent transportation and distribution of products from the
manufacturer to the ultimate consumer. Figure 1.1 illustrates logistics activities in a for-
ward flow from supplier to consumer. A reverse flow is illustrated as well. This is the flow
of items from the consumer back to the point of disposal. These activities are required
when materials and products are retired, recycled and/or disposed of and phased out of
inventory. This is called reverse logistics, a topic that will be covered in depth in Chapter 12
(Svensson, 2002).
Logistics in the commercial sector has traditionally been oriented toward the manage-
ment of the physical flow of materials and products among members of the channels of dis-
tribution of the organization. Activities such as transportation and warehousing have been
available to ensure that the movement of the product is continuous and reliable. Purchasing
departments have been responsible for the procurement and acquisition of materials, and
marketing and sales groups have been responsible for providing planning information to set
demand forecast. In essence, the spectrum of logistics in Figure 1.2 contains a number of
different organizational elements working together toward a given objective yet operating
independently.
With advances in information technology topologies such as Advanced Planning and
Scheduling (APS) and Scaled Agile Framework (SAFe) systems, logistics has taken over
new roles within the supply chain architectural framework. The advancement in Bar
Coding methodologies for instant Point of Sale (PoS) order processing and rapid improve-
ments in both passive and active Radio Frequency identification (RFID) tags and global
positioning systems have enabled rapid and efficient transfer of information on product
and material flows.
All of these information system technological advances coupled with data aggregation
and transformation structures such as Blockchain clearly signal that the logistics has taken
DOI: 10.4324/9781003128939-1
Forward flow
Supplier Customer
Warehouse
Customer
Supplier Production Process Flow
Warehouse
2 An Overview of the Logistics System
Supplier Customer
Warehouse
Industrial Logistic Support

Supplier Customer
Warehouse
Reverse flow
Physical Supply Manufacturing Physical Distribution

• Demand Forecasting • Production Planning • Demand Forecasting
• Order Processing • Purchasing • Order Processing
• Procurement • Materials Handling • Inventory Management
• Inventory management • Packaging and Shipping • Transportation and Traffic
• Transportation • Information Flow • Customer Service
• Information Flow • Information Flow
Figure 1.1 Logistics Flows During the Production Process.

An Overview of the Logistics System 3
General Manager
Production Sourcing Sales/Marketing Finance Logistics
Materials
Management
Purchasing
Warehousing
Transportation
Figure 1.2 Generic Logistics Organizational Structure.
on a more comprehensive, integrated approach and has a leading role in activities such
as information technology, marketing and sales, and finance as they relate to the physical
flow of materials and products (Winston, 1998).
At the same time, globalization trends represent the competitive landscape with more
complexity and the need for partnerships and coalitions to influence the expansion of
logistical services. All these various developments have evolved and are directly associated
with the supply chain (SC) and Supply Chain Management (SCM).
SCM integrates supply and demand management within and across companies and, as
stated by the Council of Supply Chain Management Professionals (CSCMP), ‘includes all logis-
tics management activities, as well as manufacturing operations, and it drives coordination
of processes and activities with and across marketing, sales, product design, finance and
information technology (Zinn, 1997).
Supply chain includes all those activities associated with inbound logistics, the flow of
materials and services from the supplier to the producer and/or manufacturer, the mate-
rial flows within the factory, and the outbound logistics, flow of materials, products, and
services from the factory to the customer. Conversely, SCM is the management of that
supply chain, or groups of supply chains, efficiently and effectively with the overall objec-
tive being to accomplish those activities shown in Figure 1.1, with a total Business per-
spective in mind (Winston, 1998).
In the federal sector, logistics evolved through the concept of integrated logistics support (ILS)
which was formally developed in the mid-1960s. As defined in the 4100.35G, Integrated
Logistics Support Planning Guide for DoD (Department of Defense) Systems and Equipment, ILS is
a composite of all support considerations necessary to assure the effective and eco-
nomical support of a system at all levels of maintenance for its programmed life cycle.
It is an integral part of the other aspects of system acquisition and operations.
(Werbel, 2002)
As initially envisioned, ILS included a life cycle approach to the planning, development,
acquisition, and operation of systems and equipment to maximize readiness and optimize
costs. The principal elements of ILS, as shown in Figure 1.3, included the system design
and support, interface, reliability and maintainability, maintenance planning, support, and
test equipment, supply support, transportation and handling, technical data, facilities,
personnel and training, logistics support resource funds, logistics support management
information, and contractor support services (Castaldo, 2009).
The emphasis here is on logistics as it pertained to total life cycle system support versus
the supply and distribution of components and consumables. It includes not only the
maintenance and sustaining support of those systems during their period of utilization,
but also the design of those systems for reliability, maintainability, and supportability.
During the ensuing decades of the 1970s, 1980s, and 1990s, the principles and con-
cepts of logistics were further expanded and, as defined by the Defense Systems Manage-
ment College (DSMC), Integrated Logistics Support Guide was expanded to constitute a
disciplined, unified and iterative approach to the management and technical activities
necessary to (1) integrate support considerations into system and equipment design;
(2) develop support requirements that are related consistently to readiness objec-
tives, to design, and to each other; (3) acquire the required support; (4) provide the
required support during the operational phase at minimum cost (Castaldo, 2009).
Inherent within this definition is the current requirement of design for supportability.
This pertains to the degree to which a system can be effectively supported in terms of
built-in design characteristics and overall maintenance support infrastructure.
To further stress the requirement for dealing with logistics in the system design process,
the concept of performance based logistics (PBL) has been introduced by the Department of
Defense. The objective is to emphasize the importance of and need for the maintenance
Facilities
Manpower and Design Interface and

Personnel Computing Support
Integrated Logistics
Technical Support
Data Supply
Support
Maintenance
Training
Planning
Support and Test
Equipment
Figure 1.3 Integrated Logistics Support Elements.

and support infrastructure by establishing specific metrics and to include these as quanti-
tative design-to-performance requirements in the appropriate specifications (Whitmore,
2015).
In covering the scope of logistics, one needs to consider the entire spectrum of activ-
ity, both the commercial and federal (defense) approaches. There is a need to address
all logistics activities on an integrated life-cycle basis and from a total system perspec-
tive. The interrelationships are many, and, if organizations are to remain competitive in
today’s environment, integration of both commercial and federal aspects of logistics is
important.
The Economic Impact of Logistics

The logistics discipline has evolved, and one element that has remained constant is the
economic impact of logistics. Table 1.1 represents business logistics cost in relation to gross
domestic product (GDP) for a select group of countries. As should be noted, although
absolute and relative logistics costs in relation to GNP vary from country to country,
logistics is definitely an important component in any country’s economy.
The macroeconomic impact of logistics is significant; equally significant are the micro-
economic impacts of logistics on the individual consumer. These economic impacts can
be illustrated through the concept of economic utility which measures the value or use-
fulness of a product or service in fulfilling a consumer’s needs and wants. The four general
types of economic utility are possession, form, time, and place.
The value or usefulness to a customer is based on the ability to take possession of a
product or service or what is called the Possession Utility.
Form Utility refers to product completion in a form that can be used by the customer
and is of value to that customer. Normally, form utility is associated with the production
of a product or service. Breaking down production lots into useable allocation sizes for
individual consumer consumption is form utility.
Having products available where they are needed by the consumer is Place Utility. Prod-
ucts and/or services are moved from a point of less value (warehouse) to that of higher
value (consumer).
Time Utility refers to having the product and/or service available when needed by
the customer. Different products have different sensitivities to time; perishable products
would be more time sensitive than, for example, a product than 3-week shelf life.
Table 1.1 The Cost of Logistics in Relation to a Country’s Gross Domestic Product Source; Research-
gate; 2019. Nominal GDP (2020) (Lee, 2002).
Country Logistics as a Percentage of GDP Nominal GDP (2020)
The United States 8.5 20,936,600

South Africa 12.7 301,923
India 13 2,622,983
Thailand 15.2 501,794
Brazil 15.4 1,444,733
China 17.8 14,722,730
Finland 19 271,233
Vietnam 22.5 271,158
Source: The World Bank, World Development Indicators.
Simultaneously achieving possession, form, place, and time utilities contributes greatly
to achieving, but not guaranteeing customer satisfaction.
The Increased Importance of Logistics

Formal study of business logistics and predecessor concepts such as traffic management
and physical distribution have existed since the second half of the twentieth century.
However, limited appreciation was shown for the importance of the logistics discipline
for several decades from the mid-1950s through 1980s. Over the proceeding decades
(1990–2020), increasing recognition has been given to business logistics in part because of
tremendous and rapid changes in the discipline (Table 1.2) (Whitmore, 2015).
Global business is being driven by significant opportunities to increase operating effi-
ciency. Such operational efficiencies are attainable in at least three areas: the global mar-
ketplace, labor advantages, and tax laws. First, the global marketplace offers significant
opportunities to strategically source raw material and components. Second, significant
labor advantages can be gained by locating manufacturing and distribution facilities in
developing nations. Third, favorable tax laws can make the performance of value-adding
operations in specific countries highly attractive.
The decision to engage in global operations to achieve market growth and enjoy opera-
tional efficiency follows a natural path of business expansion. Typically, in the first stage,
firms first enter the global marketplace by conducting import and export expansion. Such
import and export transactions constitute a significant portion of global international
business. The second stage of globalization involves a firm’s establishment of local pres-
ence in foreign nations and trading areas. Such presence can range from franchise and
licensing of local businesses to the establishment of manufacturing and distribution facili-
ties. The important distinction between import/export involvement and the establish-
ment of local presence is the degree of investment and managerial involvement. The third
stage of globalization is the full-fledged conduct of business operations within and across
international boundaries. This is the most advanced phase of international engagement
and is typically referred to as globalization (Werbel, 2002).
The logistics of globalization involves four significant differences in comparison to
national or even regional operations. First, the distance of typical order-to-delivery oper-
ations is significantly longer internationally in contrast to domestic business. Second,
to accommodate the laws and regulations of all governing bodies, the required docu-
mentation of business transactions is significantly more complex. Third, international
logistic activities must be designed to deal with significant diversity in work practices
and local operating environment. Fourth, accommodation of cultural variations in how
consumers demand products and services is essential for successful logistical operations
(Brennan, 2000).
Table 1.2 Top Ten Important Logistics Trends a Company Looked Out for in 2020 (Whitmore, 2015)?
Artificial intelligence
Digital twins
Real-time supply chain visibility
Blockchain
Data standardization and advanced analytics
The growing importance of industry newcomers
At the end, twenty-first century commerce is conducted within the constant threat of
environmental, social, and manmade issues. Businesses experience both environmental
and social threats due to natural and manmade issues. These constraints decrease produc-
tion, increase security measures, and impact how businesses interact internationally. How-
ever, it is the threat of terrorism that requires constant increased vigilance. The intensity
and severity of terrorist disruption involve both the shipment itself and the exposure to
using the logistical infrastructure as a means to deliver explosive and chemical devices. It
is important to understand that successfully engaging in global logistics requires mastering
the associated logistical challenges.
Advances in Retailing
In the second decade of the twenty-first century, retailing is noticeably different than in
the past, and the differences exemplify the importance of effective and efficient logistics.
So-called big-box retailers such Walmart, Carrefour, and Dick’s Sporting Goods explicitly
have recognized superior logistics as a super component of their corporate strategy. The
same is true for the now dominant, online retailing giants such as Amazon. Two decades
ago, one-day delivery of a purchase made online was thought to be not possible; now, it is
the new normal. Both big-box retailers as well as online giants have also been trendsetters
with respect to environmental and social issues in logistics (World Bank, World Develop-
ment Indicators, 2020).
Also influencing the rapid change in the retailing landscape is the change in channel
structure and management. Omni-channel Retailing, a strategy that focuses on providing
customers with a seamless shopping experience, regardless of sales channel, is becoming
the norm. In this, retailers enable their customers to transact within and across any con-
tract channel (online, in-store, mobile app, etc.) to enhance information availability and
customer experience. Multi-echelon distribution supply chain, a replenishment methodology
designed to improve channel synchronization within the supply chain and optimize lot
sizing, vastly decreases total costs across the distribution network thus providing more
value to the customer at a lower cost (Asiedu, 1998).
Technological Advances
Each academic year, Beloit College in Wisconsin releases its annual ‘Mindset’ list that
details the world view of incoming first-year college students. The class of 2032, which
assumes a 2020 birthdate, is noteworthy because ‘thumb prints have always provided log-
in security, and harder to lose, than passwords.’
There have been tremendous technological advances in the last 25 years from dial-up to
WI-FI, retail stores to online shopping, and the use of GPS (Global Positioning System)
technology. Each advancement has profoundly influenced business management and, by
extension, business logistics.
Technological advances such as the Internet of Things (IoT) are coming of age. As
costs fall, research shows that the number of businesses using IoT devices grew from
being 13% in 2014 to 25% in 2019. The IDC (International Data Corporation) fore-
casts a 13.6% annual year-over-year growth through to 2020. IoT allows organiza-
tions to monitor inventory, automate stock reordering and keep track of deliveries, all
in real time. Sensors can predict wear and tear on equipment, allowing timely order-
ing of spare parts and increased supply chain transparency. The Boeing company,
with its management of its fleet of 787 aircraft, is a pioneer in this technological area
(Bengtsson, 2005).
With greater access to Big Data, more organizations are turning to Artificial Intelligence
(AI) and machine learning to simplify tasks and automate procedures. Gartner reports that
in the 4 years leading up to 2020, there was a 270% increase in the number of organiza-
tions using AI. Predictive analytics and machine learning algorithms are being used to improve
planning and decision support systems, identify purchasing patterns, automate tedious
warehousing processes, and manage inventory to ease logistics operations.
While many organizations still rely on legacy or primitive supply chain solution soft-
ware, the future lies in the cloud. Available in many forms, including Software as a Service
(SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS), supply chain
cloud computing offers flexibility, scalability, and a global reach while doing away with
the need to maintain extensive, expensive on-premises computing infrastructure. Accord-
ing to McKinsey, cloud-specific spending in 2022 will grow six times faster than other
IT expenditures. Able to work with and complement on premise supply chain software,
cloud-based supply chain applications offer a better experience, greater flexibility, and
easy access to new features and releases (Arnold, 2015).
Changes in Consumer Behavior

Although changes in consumer behavior are commonly the purview of psychology and
marketing disciplines, such changes have important logistical and supply chain implica-
tions as well. Changing family roles, the customized customer, and rising customer expectations
are all current examples of changing consumer behavior that is helping transform logistics
and supply chains (Hu, 2017).
In terms of changing family roles, 45 years ago, less than 45% of adult women were in the
workforce. Today, women hold the majority of jobs for the first time in almost a decade
according to the Bureau of Labor Statistics. One consequence of the changing demographic
is an increasing emphasis on the convenience associated with a family’s grocery shopping
experiences. This convenience is manifested in various ways to include extended store
hours, home delivery of purchased items, and ready-to-eat/ready-to-cook foods, and
each of these has logistics-related implications. With extended store hours – some stores
are open 24 hours – retailers must address issues such as optimal delivery times for replen-
ishment trucks and when to replenish merchandise (Fornell, 2020).
Although home delivery could be convenient to the purchaser, the time-sensitive nature
of grocery products means that delivery should be made when the purchaser is at home.
Scheduling home deliveries to coincide with the purchaser’s availability is paramount to
avoid dissatisfied customers. At the end, the growth in ready-to-eat/ready-to-cook foods
means some food processors have added high-volume cooking systems to their produc-
tion facilities. From a logistics perspective, food processors continue to experiment with
packaging alternatives that will extend the shelf life of the ready-to-cook foods.
The Customized Customer signifies that the customer desires a product offering that
is highly tailored to the customer’s exact preferences. One approach for addressing the
customized customer is through mass customization, which refers to the ability of a
company to deliver highly customized products and services that are designed to meet
the needs and wants of individual segments or customers. The customized customer
will not accept a ‘one size fits all’ approach, and that means that logistics systems must
be flexible rather and not rigid. As an example, logistics service providers such as
FedEx and UPS offer a variety of delivery options to prospective customers. FedEx
and UPS customers can choose same-day delivery, next-day delivery by noon, next-
day delivery by the close of business, second-day delivery by noon, among others.
As a rule, the earlier the delivery time, the more expensive the transportation cost
(Müßigmann, 2020).
As for Rising Customer Expectations, customer expectations tend to increase through
time, which means that a satisfactory level of performance in the past might be consid-
ered mediocre today. An excellent example of rising customer expectations is provided
by the operations of Toyota Motor North America company. To retain customers and to
reduce losing customers to other automotive repair facilities, Toyota now offers same-day
delivery (rather than one-day delivery) of automotive parts to certain Toyota dealerships
located in major metropolitan areas. This same-day delivery has been facilitated by a rede-
sign of Toyota’s automotive parts’ distribution network (Zinn, 1997).
A Reduction in Economic Regulation

Widespread reductions in economic regulation (commonly referred to as deregulation),
enacted during the 1970s and 1980s, relaxed government control of carriers’ rates and
fares, entry and exit, mergers, acquisitions, and much more. These controls were particu-
larly onerous in the US transportation industry in the sense that price competition was
essentially nonexistent, and customers were forced to accept whatever service the carriers
chose to provide. This meant that logistics managers had relatively little control over one
of the most important cost components in a logistics system.
Reduction in economic regulation in the airfreight, railroad, and trucking industries in
the United States allowed individual carriers flexibility in pricing and service. This flex-
ibility was important to logistics for several reasons. First, it provided companies with the
ability to implement the logistics service levels, and prices could be adjusted accordingly.
Second, the increased pricing flexibility allowed large buyers of transportation services
to reduce their transportation costs by leveraging large amounts of freight with a limited
number of carriers (Adams, 2001).
Although the preceding part of this chapter has focused on the adjustment of eco-
nomic regulation within the United States, deregulation has had a similar effect in other
countries. Lessened economic regulation of transportation among European countries has
resulted in lower prices for truck shipments in these countries. Privatization of commercial
airports has been found to improve their operational efficiency relative to government-
owned and/or operated airports as well.
The Systems and Total Cost Approaches to Logistics

Logistics is a classic example of the systems approach to business problems. From a company-
wide perspective, the systems approach indicates that a company’s objectives can be realized
by recognizing the mutual interdependence of the major functional areas of the firm,
such as marketing, production, finance, and logistics. One implementation of the systems
approach is that the goals and objectives of the major functional areas should be compat-
ible with the company’s goals and objectives. One logistics system does not fit all companies;
goals and objectives vary from one firm to another. The logistics system that emphasizes
customer satisfaction is likely to be different from the logistics system that emphasizes cost
minimization (Haq, 2006).
A second implication is that decisions made by one functional area should consider
the potential implications for other functional areas. For example, one consequence of
pursuing the marketing concept, which focuses on satisfying customer needs and wants, is
often a marked increase in the number of stock-keeping-units (SKUs) or line items of inven-
tory offered for sale. An increase in the number of SKUs provides customers with more
choices, which today’s customers want.
Alternatively, from a logistics perspective, the proliferation of SKUs creates challenges
such as more items to identify, store, track, which increase the chances of mistakes. Exam-
ple of misidentification involves a consumer products company that mistakenly assigned
the same product code to a 3-pack, 6-pack, and 12 pack of a product it sold. Imagine the
reaction of the customer who ordered a 3-pack of the product, only to receive a 6-pack
and was charged for the 12-pack.
Just as the major functional areas of a firm should recognize their interdependence, so
too should the various activities that comprise the logistics function (the intra-functional
logistics). The logistics manager should balance each logistics activity to ensure each area is
operating effectively and efficiently.
These infra-functional logistic functions illustrated in Figure 1.4 indicate that systems
logistics serves as the foundation for business logistics which is made up of materials
management (movement and storage of materials into the firm) and physical distribu-
tion (storage of finished product and movement to the customer). Infra-functional
logistics attempts to coordinate materials management and physical distribution in
a cost-efficient manner that supports an organization’s customer service objectives
(Haq, 2006).
Coordination of material management and physical distribution can be made possible
in many ways. One way is by designating one vehicle to deliver materials and component
parts and to pick up finished goods. This may sound like common sense, but considerate
amounts of communication/coordination are required and can be elusive.
Raw materials, parts, and Initial processing or Distribution to

creation of sub- Finished goods inventory
components Factories warehouse and Retailers Customers
assemblies wholesalers
Materials Management Physical Distribution
Business Logistics
Systems Logistics
Figure 1.4 Points of Control over Inbound and Outbound Logistics Movement.
Logistics managers use the total cost approach to coordinate materials management and
physical distribution in a cost-efficient manner. This approach is built on the premise that
all relevant activities in moving and storing products should be considered (total cost), and
not individually. Use of the total cost approach requires an understanding of cost trade-
offs; in other words, changes to one logistics activity cause some costs to increase and
others to decrease. It is important to understand that logistical cost trade-offs recognize
that the costs of certain logistic activities move in opposite directions. As an example, a
decrease in transportation costs is often associated with an increase in warehousing costs.
The key to the total cost approach is that all relevant logistical cost items are considered
simultaneously during the decision-making process. Expedited transportation for exam-
ple, such as air freight, will increase a company’s transportation costs. However, expedited
transportation leads to a faster order cycle, which allows the receiving company to hold
lower levels of inventory, thus reducing both its inventory and warehousing costs. The
total cost approach evaluates if the decreased inventory and warehousing costs are greater
than the increased costs of expedited transportation.
When used in the logistics decision-making process, the total cost concept approach
forms what is commonly called the total logistics concept. This concept is unique, not
because of the activities performed, but because of the integration of all activities into
a unified whole that seeks to minimize distribution costs in a manner that supports an
organization’s customer service objectives (Coelho, 2012).
Relationships Within the Organization

The system and total cost approaches to logistics require an understanding of logistics and
its relationship with other functional areas within the organization. We could state that
logistics touches every facet of the organization in some way because of both intra and
inter business relationships. However, here, we focus on the logistical relationships with
three key functional organizational areas: finance, production, and marketing (Hu, 2017).
Finance
The finance staff is often charged with the responsibility of allocating the organization’s
funds to approved projects in various operating departments. The finance department is
instrumental in approving capital budgeting decisions that affect logistic activities. These
include the acquisition of materials, handling equipment, packaging, and inventory.
A basic challenge for the two areas is that finance often measures inventory in terms of
its cost and value while logistics tends to measure inventory in terms of units. These two
different ways of measuring inventory can often create friction between the two groups.
It is also not unusual to have identical items added to inventory at different times
which means that each unit can have a different cost even though inventory levels are not
affected. The concept of depreciation, which reduces the monetary value of inventory by
a certain amount per period of time, even though the actual quantity of inventory may be
unchanged, often can cause the two functional areas to have ‘discussions.’
Production
One of the most common interfaces between production and logistics involves the length
of production runs. The production department favors long production runs of individual
products because this allows the relevant fixed costs to be spread over more units, resulting
in a lower production cost per unit. However, long production runs require large amounts
of inventory, and it is the responsibility of logistics to store and track that inventory.
Another consideration with long production runs is that, occasionally, excess inventory
of products occurs due to limited or demand forecast inaccuracies. This adds to the inven-
tory carrying cost and contributes to an increased handling cost.
Increasing utilization of the postponement concept or the delay of value-added activities
such as final assembly, production, and packaging until the latest possible time also influ-
ences the interface between production and logistics. Some value-added activities includ-
ing case packing and labeling that were traditionally performed at the production site are
now performed in warehousing facilities. As a result, warehouse facilities are adding new
types of equipment and being reconfigured differently.
Marketing
Marketing places a heavy emphasis on customer satisfaction, and logistics strategies facili-
tate this by reducing the cost of the products, which can translate into lower prices for
customer and higher margins for the organization as well as can bring a broader variety of
choices closer to where the customer wishes to buy and use the product. Logistics strat-
egies offer a unique way for the organization to differentiate itself among competitors,
and logistics offers an important route for organization to create marketing superiority.
Interaction between logistics and marketing focuses on the marketing mix – the four Ps
of marketing – product, price, place, and promotion.
Product Decisions
Several potential interfaces are possible between marketing and logistics in terms of product
decisions. The marked increase in product offerings allows for customer choice and creates
logistical challenges in terms of identification, storage, and tracking. The number of SKUs
to hold is another product interface between the two functional areas. Marketers often
prefer to carry higher quantities because this reduces the likelihood of stock-outs. Product
design, which is often the purview of marketing, also has important logistical implications.
Beverage containers are a good example of this. Long-neck glass beverage containers might
be more distinctive than aluminum cans; however, from a logistics perspective, long-neck
bottles take up more space and are more likely to be damaged than aluminum cans.
The growing emphasis on offering sustainable products, products that meet present
needs without compromising the ability of future generations to meet their needs, impacts
logistical decisions. Fair trade products are those that guarantee a better deal for producers
in the developing world through fair and stable prices as well as teaching farming meth-
ods that are environmentally sustainable. From a logistical perspective, an organization’s
commitment to selling fair trade products can result in more rapidly changing sourcing
requirements for necessary raw materials (Brennan, 2000).
Pricing Decisions
The product’s transportation costs are reflected in its selling price; this is a key price-
related decision for marketers and has proved to be a particularly viewing issue for some
online merchants. For example, should an organization’s selling price reflect its product’s
landed cost, which refers to the price of a product at the source along with the transpor-
tation costs to its destination? A selling price that is based on a product’s landed cost,
on the one hand, could result in a substantial increase in a product’s selling price. That
increased price could decrease buyer demand as well, on the other hand. One way that
some organizations address this conundrum is to require a minimum order dollar amount
to qualify for ‘free’ delivery.
Logistics managers play a key role in product pricing including the associated cost of
providing various levels of customer service and the formulation of the firm’s quality
discount pricing policy. These decisions affect price per unit, customer satisfaction, and
shipping cost.
Place Decisions
Two types of networks, logistics and marketing channel, are directly affected by place
decisions. Logistics decisions concern the most effective way to move and store the prod-
uct from where it is produced to where it is sold. An effective logistics system can provide
positive support by enabling the organization to attract and utilize the most productive
channel and supply chain members. Those channel members are frequently able to pick
and choose which manufacturer’s products they desire to sell. If a manufacturer is not
able to provide a product at the right time, in the right quantities, and in an undamaged
condition consistently, the channel members are apt to end their relationship or end active
promotion of the product.
A popular marketing strategy involves co-branding, which refers to an alliance that allows
customers to purchase products from two or more name-brand retailers at one retail
outlet. Co-branding offers the customer convenience by allowing one-stop shopping
and the opportunity to purchase brand-name rather than private-label products. From a
logistical perspective, delivery of that product to a retail location can be a major decision.
Should each co-branding party deliver its respective products to a location, or should the
co-branding parties co-load vehicles to minimize the number of deliveries that arrive at
a particular location? While the former might result in higher delivery costs because of
multiple deliveries, the latter requires a higher degree of coordination between the co-
branding parties (Asiedu, 1998).
Promotional Decisions
Promotional decisions require close coordination between marketing and logistics. The
availability of highly advertised products, when an organization is running pricing cam-
paigns, is one important situation where a close coordination is required. A few things
that are more damaging to a firm’s image are having a stock-out of an item that has been
heavily promoted in a sales campaign. In some instances, imbalances of product supply
and demand can be viewed as bait and switch tactics – enticing customers with promise of
low-priced items only to find that they are unavailable, but a higher priced substitute item
is mysteriously available.
Once a decision is made to promote the introduction of a new item, logistics assumes
responsibility for having the item in place on the scheduled release date – not earlier, not
later.
The Need for Systems Logistics
The complexity and the costs of products and/or systems, in general, have been increas-
ing over recent years. As an example, the B-757 was first flown in 1982. Five years later,
the B-737-400 had 1.9 times the onboard Source Lines of Code (SLOC) requiring an
estimated 2.7 times the development effort of that required for B-757. Five years later, the
B-777 had 21 times more onboard SLOC than the B-757 and estimated 28.5 times the
development costs. A combination of the introduction of new technologies in response to
a constantly changing set of performance requirements and increased external social and
political pressures associated with environmental issues has been a major driver. Moreover,
the requirements to reduce the time it takes to develop and deliver a new system to the
customer and the requirement to extend the life cycle of systems already in operation
constitute a major challenge for today’s logistician.
Because of this increased complexity and costs, many systems in use today fail to ade-
quately meet the needs of today’s customers. In addition, they are not cost-effective in
terms of their operation and support. This is happening in real time when resources are
dwindling, and international competition is increasing worldwide (Whitmore, 2015).
When one examines the issue of cost-effectiveness, experience shows that a lack of total
cost visibility is a major contributing factor. A graphical representation of this is shown in
Figure 1.5.
Visibility
For many systems, the costs associated with design and development, construction, ini-
tial procurement, and installation of capital equipment and production are relatively well
known. These costs are dealt with and decisions made on a regular basis. However, the
Acquisition Cost
(research, Design,
Test, Production,
Construction)
Operations Cost Product Distribution Cost

(Personnel, Facilities, (Transportation, Traffic, and
Utilities and Energy Material Handling)
Test and Support

Equipment Cost
Maintenance Cost
Software Cost (Operating (Customer Service, Field,
and Maintenance Supplier Factory Technical Data Cost
Software) Maintenance)
Supply Support Cost

(Spares, Inventory, and
Training Cost (Operator
Material Support)
and Maintenance Training
Unknown Cost?
Retirement and Disposal

Cost
Figure 1.5 The Need For Total Cost.

costs associated with utilization and the maintenance support that the system needs
throughout its intended life cycle are often overlooked. This is particularly true through
the past decade when systems have been modified to include the ‘latest and greatest tech-
nology’ without consideration of cost impact downstream (Whitmore, 2015).
A large percentage, up to 75%, of the total life-cycle cost for a given system can be
attributed to operating and maintaining activities. A significant portion of those costs stems
from decisions made during the early phases of planning and conceptual design of the sys-
tem. Decisions pertaining to the selection of technologies and of materials, the design of
manufacturing processes, equipment packaging schemes and diagnostic routines, the per-
formance of functions manually versus using automation, the design of maintenance and
support equipment have a significant impact on the downstream life-cycle costs. Addition-
ally, the ultimate maintenance and infrastructure selected for a system throughout its period
utilization significantly affect the overall cost-effectiveness of that system.
Including life-cycle considerations in the decision-making process from the beginning
of the product/systems is critical. As illustrated in Figure 1.6, although improvements
to reduce cost can be initiated at the any stage of development, the greatest impact on
life-cycle cost, and hence maintenance and support costs, can be realized during the
early phases of product/system design and development. In other words, logistics and
the design of supportability must be inherent within the early product/system design and
development process if the results are to be cost-effective (Bhutta, 2002).
Determining supportability early in the decision-making process positively impacts the
effects of early life-cycle planning versus supportability issues later. It is imperative that
future system design and development efforts emphasize;
1 Improving methods for defining system requirements as related to true customer

needs early in the conceptual design phase and addressing performance, effectiveness,
and all essential requirements for logistics.
Customer Requirements
Design and Production and/or Construction Operation, Utilization, and Sustaining Life - Retirement of /Product of
Development of of Product/System Cycle Maintenance and Support of System and Disposal of
Product/System Product/System Material
Feedback Loop
Life Cycle Project Commitment Cost (cumulative)
Opportunity Impact Cost Effectiveness
Figure 1.6 Impact of Logistics and Life-Cycle Cost-Effectiveness.

2 Addressing the total system, its prime components, and all its elements of support
from a life-cycle perspective.
3 Organizing and integrating the appropriate and necessary logistics-related activities
into mainstream design effort concurrently and in a timely manner; and,
4 Establishing a disciplined approach, with the necessary review, evaluation, and feed-
back provisions to ensure that logistics and design for supportability are adequately
considered in the overall system acquisition process.
System logistics must be considered as an integral part of the business system function, not
separately and not after-the-fact. More specifically, to be affected, it must include the fol-
lowing activities:
1 The initial definition of product/system support requirements.

2 Development of criteria as an input to the design including key competitive differ-
ential related elements of the product/system, support infrastructure and design, and
procurement specifications.
3 Ongoing evaluation of alternative design configurations of the product/system
through trade-off studies, design optimization, and formal design review.
4 Determination of resource requirements for support based on a given design configu-
ration to include personnel quantities and skill levels, spares and repair parts, test and
support equipment, facilities, transportation, data, and computer resources.
5 Ongoing assessment of the overall support infrastructure with the objective of con-
tinuous improvement through iterative processes of measurement, evaluation, and
recommendations for enhancement to include the data collection methodologies,
evaluation, and process improvement capabilities.
System Design and Development Production and Deployment Operation
Feedback Loop
Supportability Problems
Program without Early Support Emphasis
Program with Early Emphasis on Supportability

• Overall Less Costly
• Implementation Occurs Earlier
Product/system Development Time frame
Figure 1.7 Consequences of Not Addressing Supportability Early in the Product/System Life Cycle.
A Comparison Showing the Effects of Early Life-Cycle Planning Versus Supportability Issues
Later (Bhutta, 2002).
Summary
This chapter provided an abbreviated introduction to the scope of logistics and defined
it in a broad context as it applies to commercial product and complex systems develop-
ment from a life-cycle perspective. Business logistics was initially presented and discussed
in the context of its overall fit within the supply chain structure as well as its relationships
with other functional elements within the organization context. System logistics was then
addressed by first discussing the current environment and establishing the importance
of Engineering logistics. Rational was then given for the inclusion of logistics as part of
the larger logistics support infrastructure and the need to consider it as a major Systems Ele-
ment when conceptualizing the development of a product and/or complex system. Addi-
tionally, the need to define this infrastructure early in the product/system life cycle was
addressed so that it can positively affect the Design and Development process thus yielding
manageable Life Cycle Costs.
Chapter 1 Concept Questions

1 In your own words, provide definitions of the following terms: logistics, supply chain,
supply chain management, integrated logistics support. Briefly address the distinguishing
characteristic(s) of each.
2 Discuss logistics globalization by addressing its advantages/disadvantages, its various
stages, and how it differs from national or regional operations.
3 Explain in your own words what impact the following have had on the field of
logistics:
• Advances in retailing.
• Technological advances.
• Changes in consumer behavior.
• A reduction in economic regulation.
4 Briefly describe the relationship logistics has within the organization. Specifically
address how it interfaces and influences/impacts the functional areas of finance, pro-
duction, and marketing.
5 In your own words, illustrate your understanding of the need to view logistics from a
systems perspective. Your response should, at a minimum, touch on the point’s prod-
uct complexity, new technologies, total cost visibility, and life-cycle supportability.
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2 Logistics System Information
Technology
Information and Logistics Systems Topologies

In Chapter 1, our introductory discussion of logistics systems emphasized the movement
and storage of goods across the supply chain network and the critical facilitating role business
logistics plays during the process. In fact, a core element of the logistics definition is that
it facilitates the flows and storage of goods, services, and related information across that network
(Nisreen Ameen, 2021).
Effective and efficient utilization of information across the supply chain network is
critical to logistics systems management. Benefits of proper utilization of information are
given here (McAfee, 2012):
1 Streamlined order processing and reduced lead times enabled by coordinated logistics
information systems.
2 Greater awareness of customer demand via point-of-sale data, which helps improve
planning and reduce variability in the supply chain.
3 Better coordination of manufacturing, marketing, and distribution through enter-
prise planning systems (ERP) and advanced planning systems (APS).
4 Greater knowledge and visibility across the supply chain which make it possible to
replace inventory with information.
To sustain competitiveness, organizations must successfully implement and exploit the

right information technologies. Additionally, the effective and efficient use of informa-
tion technologies allows organizations to equally reduce costs and improve customer
experience. For example, the use of SmartOps logistics’ management software by the John
Deere Company has helped the equipment supplier increase its on-time shipments to
dealers from 63% to 92% while reducing its inventory by nearly $1 billion over the last
5 years. Long renowned for its supply chain processes, Walmart incorporates state-of-the-
art technologies and network systems to predict demand trends, track inventory levels,
and plan efficient transportation routes (SAP, 2013).
Both companies benefited from using data and information to make strategic deci-
sions. Data are recorded measures of certain occurrences and facts, whereas Information
shapes those facts into a format suitable for decision-making. Advances in technological
hardware and software now allow logisticians access to large amounts of data in relatively
short periods of time.
One contemporary issue for logisticians to consider is the emergence of Big Data, the
collection of large amounts of near-real-time data collected through a variety of sources
DOI: 10.4324/9781003128939-2
20 Logistics System Information Technology
such as sensors, smartphones, RF (Radio Frequency) tags, and real-time data streaming
from operating systems. One Boeing 787 aircraft system during flight operations gener-
ates 1 terabyte (a trillion bytes) of real-time flight data that is downloaded on a continu-
ous basis during those flight operations. Logisticians must develop strategies for how to
manage this flood of data to better manage assets and measure and predict component
reliability, and maintainability parameters, thus increasing system operability (Zanjirani
Farahani, 2014).
The method through which this Big Data is distilled into understandable informa-
tion is called Data Analytics, the process of examining datasets to draw conclusions about
the information they contain. Logistics managers have traditionally used such analytics
for vehicle routing and scheduling. GPS (Global Positioning System)-enabled Big Data
Telematics and Route Optimization has proven to provide significant cost savings. ORION
(On-road Integrated Optimization and Navigation) which allows drivers to determine
optimal routing of deliveries is another example of how the analytics of big data is being
used to improve the logistics process.
The Different Types of Information Management Systems

In the early days of computing, each time an information management system (IMS) was
needed it was ‘tailored’ to a specific purpose and problem. It soon became clear that many
of the problems that IMSs set out to address shared certain similar characteristics. Con-
sequently, there were attempts to build a single system that would solve a wide range of
similar issues. It was soon realized that to address issues and solve problems to the degree
necessary, you first needed to define how and where the information management system
would be employed and justify why it was needed. This then ignited a search for a way to
classify IMSs accurately (Winkelhaus, 2020).
The different types of IMSs are identified through a process of classification. Classifica-
tion is a method by which products and systems can be categorized or classified together
and treated as if they were a single unit. IMSs are created, acquired, and used by humans
to deal with tasks or problems. One of the oldest and most used systems for classifying
IMSs is known as the pyramid model.
As most organizations are hierarchical, the way in which these different classes of IMSs
are categorized tends to follow the three-pyramid model (Figure 2.1) based on the type of
decisions exercised at the different levels of the organization (Winkelhaus, 2020).
In a similar manner, by changing the criteria of the different types of data, information,
and knowledge that are processed at the different levels of decision-making, a six-level
model as shown in Figure 2.2 can be created. Using this six-level model depicted in Fig-
ure 2.2, we can now examine how each IMS differs and how each provides support to
the logistics system (Winkelhaus, 2020).
Office Support Systems

Office Support Systems are effective ways to process personal and organizational business data
to perform calculations and create documents. General office support system software pack-
ages include word processing, spreadsheet, presentation, and database management applica-
tions. Of those mentioned, the most relevant for logisticians is the spreadsheet. Spreadsheet
applications provide logisticians with a multitude of capabilities to solve a variety of complex
business problems quickly and inexpensively. Some examples of these are economic order
Logistics System Information Technology 21
Strategic Decisions
Executive
Information Systems
Tactical Decisions
Management Information Systems
Operational Decisions
Transactional Processing Systems
Figure 2.1
Three-Level Pyramid Model Based on Decision-Making at Different Levels of the
Organization.
Tacit Knowledge
Enterprise
Information Systems
Explicit Knowledge Decision Support Systems
Communications System
Information Management Information Systems
Basic Data
Office Support Systems
Figure 2.2 Six-Level Pyramid Model Based on Processing Requirements at Different Levels Within
Organization (Winkelhaus, 2020).
quantity (EOQ) calculations, warehouse sizing, transportation modal and carrier decisions,
production planning, and factory location analysis such as center of gravity modeling.
Today’s spreadsheet applications have evolved to the point where they are able to pro-
vide logistics optimization solutions. Logistics optimization models help logisticians make
complex judgments and take decisions at the strategic, tactical, and operational levels of
organizations. At the strategic level, for example, Lockheed Martin Corporation uses the
excel solver package with the add-in package ‘What’s Best’ to help them analyze plant
location and sizing decisions. These logistics optimization models differ from the more
traditional operations research in that they are typically focused on the practical imple-
mentation instead of theoretical. The use of spreadsheets and their modeling add-ins
provides a method for logisticians to conduct a variety of ‘what-if ’ analyses in support of
logistics decision-making (Kache, 2017).

Transactional Processing Systems (TPSs) collect and store information about transactions
and possess the ability to control some aspects of those transactions. The objective of a
typical TPS is to provide for transaction efficiency in either batch or real-time events.
Batch processing data is collected, stored, and processed later based on a planned schedule
often predicated on the accumulation of transactions, for example, every 25 transactions.
In real-time processing, transactions are being processed as executed. An example of a
logistics type of TPS is Electronic Data Interchange (EDI), computer-to-computer trans-
mission of business transactional data in a structured format. EDI provides for a seamless
transmission of data across organizations and can facilitate the integration of, and coor-
dination/collaboration between supply chain partners. Organizations with strong EDI
infrastructure between suppliers and customers have a substantial advantage over supply
chain arrangement without the capability. Logistics uses of EDI include invoicing, sub-
mission of purchase orders, pricing, advanced shipment notices, electronic funds transfer,
and bill payment (Global Knowledge, 2020).
EDI applications include several logistics-related benefits – to name just a few, a reduc-
tion in document preparation and processing time, inventory-carrying cost, personnel
cost, and information float as well as contributing to a reduction in shipping errors.
However, some drawbacks include high set-up cost, lack of standard format, and unfor-
tunate incompatibility of computer hardware and software applications. An example of
an organization that has been successful in exploiting EDI technologies is Walmart. They
were early adapters of EDI technology and were one of the first to transition to Internet-
based EDI (I-EDI) in place of the more costly Value-Added Network (VAN)-based EDI
(Teniwut, 2020).
TPS provides companies with pertinent information through the use of automation to
collect data for inventory visibility and logistics planning. Examples include optical char-
acter recognition which reads letters, words, and numbers; machine vision used to scan,
inspect, and interpret what it sees; voice data entry to record and interprets a human voice;
and radio frequency identification used where there is no direct line of sight between the
scanner and label and magnetic strips.
Radio-Frequency Identification (RFID) is another automatic identification technology that
has had considerable impact on logistics system management. RFID uses radio frequency
to identify objects that have been implanted with a RFID tag. As illustrated in Figure 2.3,
three components make up RFID. The scanning antenna, an RFID tag (chip) that con-
veys relevant data, and a transceiver that interprets the data (Morteza Yazdani, 2017).
A major catalyst for RFID technology usage has been the ‘Amazon Go’ initiative that
boasts of shopping with Amazon’s grocery store with no check-outs, no wait! Amazon is
secretive about the technologically innovative grocery store, but tech experts predict that
Data Warehouse Reader/Transceiver Tag

Internet
and Computer (embedded in label)
System
Distributed Databases
Figure 2.3 Standard RFID Configuration.
the store is outfitted with machine learning and sensors to track items for the customer’s
pickup. RFID technology is envisioned to become a core technology. While it is not new
to retail, with the decreasing cost of RFID tagging, it is not surprising that it is being
applied to food items. The apparel and health care industries are also approaching a criti-
cal mass of users. Many large retail companies such as Kohl’s use RFID to track individual
items of clothing, and roughly about 10% of hospitals use RFID to track patients as they
progress through different stages of care.
A leading benefit of RFID technology is of course its ability to positively track a
product/system as it moves through the supply chain. Dramatic reductions, between 20%
and 50%, in inventory stock-outs have been reported by retail giants such as Walmart.
A reduced need for inventory counts and improved accuracy in counts have been reported
as well.
Regardless of the many benefits RFID offers, there continues to be challenges to its
wide adaptation; one of those being cost. The cost of installing the related hardware and
software can range from approximately $100,000 for smaller organizations to approxi-
mately $20 million for larger organizations. Another drawback is privacy concerns. For
example, a major retailer sold cosmetics embedded with RFID chips on the more expen-
sive product lines. When a customer picked the product up to examine it, their image was
captured, via webcam, and sent to the manufacturer’s headquarters. Yet another potential
drawback is data accuracy. Because of the RFID chip sensitivity, temperature fluctuates as
a product traveling through the supply chain can cause inaccurate readings.
Management Information Systems

Management Information Systems (MISs) convert TPS data into information for monitor-
ing performance and managing an organization. Its objective is to provide managers
with needed information in a timely manner. One such system is the logistics information
system (LIS). The LIS is a system that links both the internal and external environmental
elements that affect strategic planning within the organization and coordinates inputs
from the order management system, warehouse management system, and transportation
management system. Figure 2.4 illustrates the overview architecture of the LIS and activi-
ties executed within each subordinate system (Whitmore, 2015).
Information collection should emphasize both internal and external sources of logis-
tics information as reflected in Figure 2.5. However, reliable information from such
sources is not always available or reliable from either source. Research into business value
attributable to logistics found that ‘logistics measurement’ is happening less frequently,
which creates problems. This means that the logistics manager must be attuned to three
Internal External
• Financial/accounting • Customers
• Marketing • Vendors
• Logistics Logistics • Carriers
• Manufacturing Information • Supply Chain Partners
• purchasing System
Order Management System Warehouse Management System Transportation Management System

• Contact with customers • Stock level management • Shipment consolidation
• Stock availability • Order picking • Routing and scheduling
• Credit checking • Picker routing • Claims
• Invoicing • Picker assignments and work • Tracking
• Product allocation to loading • Bill payment
customer • Product availability estimating • Freight bill auditing
• Fulfillment location
Figure 2.4 Overview of a Logistics Information System.
Logistics Information System COURSER REPORTS
Disseminates
Collects
Data
Analyzes Retrieves
ARCHIVED USER
REPORTS REPORTS
Stores
Logistics manager Customized reports

request information are produced
SCHEDULED REPORTS
Figure 2.5 A Logistics Information System Process Flow Begins with a Logistics Manager Request-
ing Information and Ends with that Manager Receiving Regular and Customized Status
Reports.
communications elements when using the LIS. The first is receiving the needed informa-
tion. It is important to be specific when submitting requests. Setting search parameters in
broad context will lead to generalizations verses specifics. The second is timeliness. Infor-
mation from both external and internal sources must be synchronized to respond to the
logistics managers’ request in real time. The third is accuracy. The logistics manager must
have confidence that the nature and quality of data analyzed via LIS present the validity
and quality needed to make sound decisions (Persico, 2019).
Communications Systems
In general, communication systems help various stakeholders of the organization work
together by interacting and sharing information in many different forms. From a logisti-
cal perspective, the importance of a well-defined and well-executed logistics communica-
tion system (LCS) is critical in effectively employing an ILS (integrated logistics support).
A well-designed LCS should ensure effective communication taking place among (1) An
organization, its suppliers, and its customers; (2) Major functions within an organization
such as logistics and engineering; (3) All the individual logistics activities; (4) Various
aspects within each logistics activity, for example, coordinating warehousing of materi-
als, work-in-process, and finished goods; and (5) Various members of the supply chain,
including those not directly linked to the organization, for example, intermediaries and
secondary customers or suppliers.
Many advances today in telecommunications or the transmission of information as rods,
sounds, or images over great distances in the form of electromagnetic signals, such as
by telegraph, telephone, radio, or television, are driving logistics innovation. Telecom-
munication solutions for logistics allow analyzing not only the movement of goods and
the status of the modes of transportation, but also how the drivers observe traffic safety.
For example, a special sensor can notify the head office of a logistics organization that
the driver has passed a large area without fastening a safety belt or breaking a speed limit.
Inside the vehicle, there are sensors that control the temperature and the level of vibration
at which the cargo is transported and simultaneously transfers this data to the organization
(Kuriyan, 2008).
Another innovation, the Internet of Things (IoT), a system of interrelated computing
devices, mechanical and digital machines provided with unique identifiers (UIDs), and
the ability to transfer data over a network without requiring human-to-human or human-
to-computer interaction, has been widely adapted. The Nestle Corporation has deployed a
wireless vehicle management system (VMS) that can automatically receive vehicle perfor-
mance data, report problems, and even schedule that truck for maintenance based on real-
time data. The chemical giant Dow Chemical uses the IoT to control the transportation
of goods using different identifiers (RFID, GPS, barcodes) as well as sensors and distribu-
tion of goods. Data from sensors flow to the ILS systems of the organizations, where they
are analyzed and provided to logistics manager (Kuriyan, 2008).
Over the long term, 5G, the latest iteration of cellular technology, will enable a sharp
increase in the amount of data transmitted over wireless systems due to more available
bandwidth and advanced antenna technology. 5G will impact the supply chain and logis-
tics by allowing more data to be transferred more quickly in real time, in turn making
increased visibility throughout the supply chain possible. For example, using a 5G net-
work, a parts container could communicate that the container is 80% depleted for an
SKU (Stock Keeping Unit) which would trigger a re-order of the necessary parts. This
would be a trigger across the supply chain in warehouse movement, transportation move-
ment, distribution, and delivery and inform the parts provider that a forecast adjustment
would be forthcoming. All of this is done via the IoT.
Software Bills of Materials (SBOMs) is currently being tested within aviation industries to
ensure positive cradle-to-grave component tracking and to ensure its security as it travels
though the supply chain. SBOMs are already being used for license compliance and for
Parts Manufactured Authority (PMA). The supplier of the part must define it and provide
the SBOM. The SBOM must support the nesting, recursion, and relationships (a multi-
level BOM). This ensures that the component or part meets all required specifications
necessary for use of the product/system designated (Rappaport, 2002).
At the end, logistics systems and supply chains can be complex. As private and public
functions grow ever more inseparable from the IT systems that support them, robust
public–private partnerships become even more necessary. Information pertinent to the
logistics system and supply chain, such as vulnerabilities, attack vector, and supplier secu-
rity practices should be shared along with mitigation plans – for example, the Common
Vulnerabilities and Exposures (CVE) list. The CVE is an extensive listing of public known
vulnerabilities found after components have been deployed, and it has enabled operations
groups to prioritize, patch, and remediate over 60,000 openly reported vulnerabilities.
Although it is hard to predict the future impact of communication technologies, ser-
vices, and applications not yet invented, an indisputable fact is that they will continue to
evolve quickly, and security technology and concepts cannot be the pacing factors in this
evolution. Both must be addressed concurrently.
Decision Support Systems (DSS)

In general context, Decision Support Systems (DSS) assist managers in making decisions by
providing information, modeling capabilities, and analyze tools. However, as the globali-
zation of business activities broadens and diversifies logistical operations, many logistics
managers have found themselves challenged by extreme complexities and uncertainties.
Consequently, planning and control of both domestic and global activities have become
very complex. It has been found that one of the most effective ways in dealing with the
environmental difficulties is to utilize an integrated logistics decision support systems (ILDSS)
that links world-wide communications and distribution networks with the parent organi-
zation’s technology infrastructure, its foreign business partners, and third-party logisticians
as illustrated in Figure 2.6 (Mukhopadhyay, 1995).
Attributes of using such an ILDSS model is that simulation can be conducted. Simulation
is a technique that models real-world systems, typically using mathematical models to rep-
resent relationships among the system’s components. Simulation reliability is achieved by
making the model as realistic as possible to a real-world situation. The primary advantage
of simulation is that it enables the organization to test the feasibility of proposed changes
at relatively little expense. Additionally, it prevents the organization from making a major
business change in their logistics system that could result in customer dissatisfaction due
to service-level issues. Another attribute of using the ILDSS model is that it is linked with
the LIS system, and this provides application-specific software to help logistics manager deal
with specific logistical processes that affect order, inventory, transportation, and ware-
housing (Roberts, 2006).
The application specific software would have traditionally been installed on the organi-
zation’s IT systems. However, the ‘purchase and install’ option was quite expensive,
Master Database
Forecasting Model Statistical Model Simulation Model
Integrated Logistics Decision

Support System
Logistics Information System Interface
Order Model Inventory Model Transportation Model Warehousing Model
Figure 2.6 Integrated Logistics Support Systems.
disruptive, and lengthy. Now, a more popular, less disruptive, and much less expensive
alternative is ‘on-demand software,’ also referred to as software-as-a-service or cloud com-
puting. The major advantage of on-demand software is its pay-for-use model which
allows customers to avoid high capital investment costs. More on this topic is explained
later in the chapter discussion.
Enterprise Information Management Systems

An Enterprise Information Management System (EIM) is defined as a set of technologies,
processes, disciplines, and practices used to manage an organization’s data, content, and
information as an enterprise asset. It is not a new concept, but its importance to organiza-
tions is growing rapidly. It has been estimated that enterprise data grows at a rate of 30 to
40 per cent year over year. Gartner estimates that in 2021, 75% of organizations that use
EIM to align, link, and leverage their data and analytics investments will report substan-
tially improved business outcomes as illustrated in Figure 2.7 (Powers, 1989).
You could describe EIM as ‘everything information’ – there are several components
that comprise an EIM system. Each EIM is tailor made to meet the organization’s needs
for current and future states it will support. While each component that comprises that
EIM can be deployed individually, the power of the overall system becomes apparent
when all components are combined into a complete suite of end-to-end solutions. It can
address all issues that an organization faces when managing and exploiting the data and
information within its business.
From a supply chain and Logistical Systems perspective, an EIM system that incorporates
the elements of a logistics information system and an integrated logistics decision support system
would give an organization key competitive advantage among its competitors and be a
clear differentiator among its peers. For the individual logistician, some of the ‘key pain
Enterprise Information Management System
Customer Cohorts
Knowledge
Management/Collaboration
Intranet – internal website, blogs, etc.
Knowledge Management – repository,

collaboration, retrieval etc.
Supply Chain Management (SCM) Outbound
Extranet – website shared with customers

Customer Relationship Management (CRM)
Enterprise Resource Planning (ERP)

Reporting/data mining
Supply Chain Management (SCM) Inbound Decision support system (DSS)
Data Warehouse
Expert systems (ES)
Artificial Intelligence (AI)
Supply Chain Partners Business Intelligence (BI)
Figure 2.7 Typical Enterprise Information Management (EIM) System.

Table 2.1 Key Pain Points Organizations Face When Designing Supply Chain and Logistics Information
Management Strategies (Bernstein, 2009).
Key Pain Points Organizations Face When Designing Supply Chain and Logistics Information Management
Strategies
1 Central management and control of all information within the supply and logistical value chains
2 The ability to handle and exploit structured and unstructured data wherever it resides
3 Seamless access to structured and unstructured data to enable effective digital supply and logistical
value chain management
4 Deliver an omni channel experience for both customers and employees.
5 Create closer, more effective relationships with customers, suppliers, and other trading partners
6 Deliver enhanced data security and data sovereignty for all channel team members
7 Ease the process of compliance with global regulations, industry standards, and customer mandates
points,’ like those listed in Table 2.1, that all organizations face when developing supply
chain and logistic strategies, could be addressed.
The logistics information system (ILS) must continuously deal with both internal and
external data inputs. In the very near future, Customer Experience Management (CEM) data,
external data, will make up most of the information that is being captured, and the log-
istician of tomorrow will have to know how best to capture the data, manage that data,
turn the data into information, and distribute it. Digital transformation, which is driven
by disruptive technologies such as the cloud, the Internet of Things (IoT), and Artificial
Intelligence, is becoming commonplace and now the norm, not the exception. While the
EIM is no ‘silver bullet’ per se, it does represent a means to fully extract the value from
the mountains of data associated with the supply chain and logistics world of tomorrow
(Bardi, 1994).
Information Management System Challenges

Various challenges associated with specific types of information technology have thus
far been presented in this chapter. However, some macro-level challenges germane to
all information technology systems warrant address (Table 2.2). The first of these is the
recognition that information systems are but a tool through which organizational prob-
lems can be addressed. It is neither a panacea nor the final step to finding a solution to a
problem. It is in fact a first step in problem solving. The second macro-level technology
challenge is that of data security. As previously mentioned in our discussion of the ILS
and EIM systems, data input from external systems and sources will continue to grow, and
with that growth the need for more robust security measures will arise. Gartner, in the
‘2020 Planning Guide for Data Management,’ calls attention to the risks and implications
of data management because of rapidly evolving IT architectures and technologies. The
key findings are summarized (Powers, 1989):
• Data management will fuel enormous growth in the data management space, which
will lead to changes in architectures, processes, workflows, and roles. Cloud comput-
ing will introduce server-less and augmented capabilities, which will further morph
data management processes and roles.
• Data management approaches will require unification as operational and analyti-
cal options converge and more databases offer multimodal and real-time streaming
capabilities.
Table 2.2 Twelve IT Challenges Facing the Professionals of Tomorrow
Workload Better management oversight and strategy is required to address this issue.
Automation may also be a solution to reduce time-consuming tasks that are
not a high priority.
Cybersecurity Organizations cannot take IT security lightly. An analysis of worldwide identity
and access management by the International Data Corporation (IDC)
revealed that 55% of consumers would switch platforms or providers due to
the threat of a data breach, and 78% would switch if a breach impacted them
directly.
Skills gaps Over 80% of North American organizations have skills gaps. Globally, skills
gaps have increased by 155% in 3 years. They can no longer be ignored,
especially as a lack of necessary skills can be blamed for increased employee
stress, development and deployment delays, and increased operating costs.
Digital Digital transformation is the latest disrupter. It has led to technology no longer
transformation providing a sustained competitive advantage. It now plays a supporting role
for people with the right skills. Expertise is needed now more than ever to
manage and implement all the new technologies.
Cloud computing Cloud is the top investment area worldwide for IT departments. Organizations
require an infusion of cloud skills to match their monetary investment in
cloud platforms.
Hiring Talent recruitment and retention is a major challenge for both IT and logistics
leaders – 50% are currently struggling in the area. Only 7% of IT decision-
makers mention that hiring has been easy.
Budget A lack of budget and resources is another major concern for both IT and
logistics decision-makers. Budget is often the major roadblock impeding
professional development and hiring.
Leadership support Nearly 20% of IT and logistics professionals mention that senior leadership does
not see a tangible benefit from training. That is a huge disconnect, especially
since employees have a strong desire to learn and grow in their careers.
Analytics and data IT departments are the biggest skills gap, aside from cybersecurity and cloud
management computing.
Automation Automation’s role in cybersecurity is certainly growing. It is a tool that should
be used to predict cyber threats and implement responses more quickly than
can be accomplished manually. Automation is also useful in cloud migration.
Project Companies with certified project managers are more likely to have projects that
management are completed on time and within budget. It takes experience and strategic
thinking to align projects with departmental and organizational goals.
Career growth As IT decision-makers struggle to fill open positions, it is important that they
invest in the areas their employees deem valuable. If growth opportunities are
not available, IT professionals have proven that they will not sit idly by.
• Data management complexity will rise as organizations handle multi-structured data

spread across on-premises, edge, and multiple cloud vendors, leading to greater gov-
ernance challenges.
• As artificial intelligence (AI) and machine learning (ML) become ‘table stakes’ in data
management products, they will introduce new options and challenges for data and
analytics architects, who must evolve how services will be delivered to meet business
imperatives.
The third macro-level information technology challenge involves the ‘human’ in the loop,
the IT and/or logistics management professionals. How will either of these managers deal
with the ever-changing technological landscape? Global Knowledge, in a March 5, 2020,
article entitled, ‘12 IT Challenges Facing the Professionals of Tomorrow,’ outlined some of
these challenges (Persico, 2019).
Summary
This chapter addressed some key success factors relevant to the application of logistics and
information systems. Six different types of those logistics and information systems currently
in use were discussed, and their attributes and challenges were identified. A range of IT-
related topics were addressed to include electronic data interchange, global positioning sys-
tems, cloud computing, and machine-to-machine learning. A discussion was presented on
the need for a robust security blanket for the different types of IT systems employed owing
to the new normal of work and live-in global sphere today. At the end, a discussion on the
IT challenges was conducted focusing on the ‘human’ element in the technology loop.
Chapter 2 Concept Questions

1 In your own words, discuss why the different types of Information Management
System (IMS) classification were developed. Describe how the pyramid model(s) are
used to explain how the different types of IMSs are categorized.
2 Define what a Transaction Processing System (TPS) is, its objective(s), and the differ-
ent types used by logisticians in their daily tasks.
3 Illustrate your understanding of a logistics information system (LIS) by addressing its
attributes and its process flow.
4 Discuss how a robust communication system helps an organization to work together
by interacting and sharing in many different forms across.
5 Define and discuss the attributes of an Integrated logistics decision support system
(ILDSS) and an enterprise information management system (EIM).
6 Briefly address some macro-level challenges confronting the use of information man-
agement systems (IMSs).
CH 2 Case Study
INVESTING IN NEW TECHNOLOGIES: DECISION TIME!
Angela Chatman was president and CEO of Precision Heat, a medium-sized industrial
oven manufacturer located in Toledo, Ohio. The firm had expanded from being a niche
provider of specialized products to one of both regional and international status. As mar-
kets had expanded, so too had sources of supply for the company, with major suppliers
of key building components located in Southern California, the Pacifica Northwest, and
Michigan. Additionally, smaller suppliers of industrial oven components were located
around the globe. The decision to locate manufacturing in Ohio had been made for
two reasons: Angela’s former colleague and mentor in the aviation industry was close by
in Detroit, and many of the largest components used in several of the industrial ovens –
truck bed frame for the TR series truck ovens – were built and purchased from a US light
truck maker with a plant in Michigan.
Like others in the industrial oven business, Angela’s company manufactured only a few
of the components used in the oven build process. They focused more of the oven build-
ing to exact specifications, ensuring seamless heat treatment across several application-
type materials. There was, however, a well-defined order in which the components could
be assembled, integrated, and tested. Recently, it had become clear to Angela that ware-
house and inventory costs associated with all the required building components were a
substantial portion of her expenses and that they might be ripe for a reduction. In par-
ticular, she had been considering a decision to invest in a warehouse management system
(WMA) to increase the visibility of the large warehouse inventory which was located next
to the production plant. Transportation costs were an emerging secondary concern, as it
had been increasingly difficult to plan shipments as they expanded into new markets and
were sourced from a larger number of suppliers. Thus, Angela was also intrigued about
the potential benefits of implementing a transportation management system (TMS).
In response to these challenges, Angela assembled a cross-functional team to look at
potential technology-based solutions. The team was made up of herself, Jason Shea (VP
of Logistics), Stephanie Zinger (Director of Purchasing), Ethan Mathews, (Plant Man-
ager), Jack Paul (Inventory Planner), and Augie Augustson (Warehouse Manager). The
team came together and identified and listed some of the potential benefits for imple-
menting both the WMS (Warehouse Management Systems) and TMS.
In terms of the WMS, potential benefits were considered to be
• Enhanced productivity for warehouse labor management.

• Increased visibility and traceability of inventory.
• Fewer picking errors.
• Improved responsiveness to the product plant.
• Less paperwork.
In terms of the TMS, potential benefits were considered to be
• Increased service to customers.

• Potential to pool inbound shipments to reduce costs.
• Potential inventory reductions from more reliable deliveries.
• Cash flow improvements from enhanced freight payment.
• Improved warehouse efficiency on inbound shipments.
Additionally, several members of the team were advocating the idea of implementing
both technologies together to optimize both areas jointly. The argument was that these
technologies often are implemented in silos, and real value would be obtained by aligning
them.
While the potential benefits were exciting, the idea of embarking on a WMS and TMS
implementation was daunting. Not only was there an apprehension about the significant
capital investment for software but there were also doubts about real potential in imple-
menting that software correctly. They also worried about how the employees would take
to the change in processes that would be required to ensure the success of a project.
Regarding their suppliers, Stephanie often had the opportunity to buy out parts and
components from manufacturers that were going out of business. These components
could be obtained at a substantial savings, with the requirement that inventory be tempo-
rarily increased to accommodate the bulk buy.
Ethan operated with the assumption that there would be some defective components
purchased executing this bulk buy. Consequently, there would likely be a defective prod-
uct produced off the production line. Testing on the ovens was extensive during the
production process as it was on the components that comprised them. To the extent that
only a few of a particular type of component were on hand or that lead-time became less
certain, the interruption of the production schedule would be that much greater. This
might entail expensive rush orders for replacement components or equally expensive
down time for the entire plant.
Despite these concerns, Angela was painfully aware that ignoring the warehousing and
transportation problems would be a mistake. Something had to be done! While they were
currently feeling the strain in the warehouse, transportation was beginning to be a bigger
issue. As an aid to making the decision on whether to invest or not, Angela had worked
with the team to draw up a table that summarized the anticipated impacts of implement-
ing the technologies.
WMS Project TMS Project WMS/TMS Total
Net Benefit $245,000 $573,000 $775,000

NPV $172,902 $409,938 $505,243
ROI 75% 85% 76%
Payback Period (Months) 11 9 19
Profitability Index 590% 673% 488%
Sunk Cost $50,000 100,000 $200,000
Risk Medium Low Very High
The figures are based on input from the potential technology providers, forecasts from
the marketing department, and input from the team members. As Angela reviewed the
information in preparation for the next team meeting, she wondered what decision they
should make.
Discussion Questions
1 Should the team consider any other costs or benefits from implementing
the WMA? If so, what are they and why did they arise?
2 Should the team consider any other costs or benefits from implementing
the TMS? If so, what are they and why did they arise?
3 What are the advantages and disadvantages of implementing both tech-
nologies simultaneously?
4 If both technologies are adopted, what changes, if any, should occur in the
relationships among Angela’s firm and the suppliers of components and
her transportation providers? Discuss.
Chapter 2 References
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ness Logistics, 71–85.
Bernstein, P. A. (2009). Principles of transaction processing. Burlington, MA: Morgan Kaufmann Publishers.
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Gao, Q. (2020). Simulation analysis of supply chain risk management system based on IoT information
platform. Enterprise Information Systems, 1354–1378.
Global Knowledge. (2020, March 5). Global knowledge: 12 challenges facing IT professionals. Retrieved from
https://www.globalknowledge.com/us-en/resources/resource-library/articles/12-challenges-facing-
it-professionals/#gref
Kache, F. (2017). Challenges and opportunities of digital information at the intersection of big data ana-
lytics and supply chain management. International Journal of Operations & Production Management, 10–36.
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pyramid model in practice. The Information Society, 93–104.
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change. MIS Quarterly, 137–156.
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Another random document with
no related content on Scribd:
How Sir Richard Neuill Earle of
Warwicke, and his brother Iohn, Lord
Marquise Montacute, through their too
much boldnesse were slaine at
Barnet, the 14 of Aprill, Anno 1471.
[1118]
1.
Among the heauy heape of happy knightes,

Whome fortune stald vpon her staylesse stage,
Oft hoyst on hie, oft pight in wretched plights,
Behold mee, Baldwine, a per se of my age,
Lord Richard Neuill, earle by maryage
Of Warwicke duchy, of Sarum by discent,
Which erst my father through his mariage hent.
2.
Wouldst thou beholde false fortune in her kinde?

Note well my selfe, so shalt thou see her naked:
Full faire before, but too too foule behinde,
Most drowsy still whan most shee seemes awaked:
My fame and shame her shift full oft hath shaked,
By enterchaunge, alow, and vp aloft,
The lysard like, that chaungeth hew full oft.
3.
For while the duke of Yorke in life remaynde,

Mine vncle deare, I was his happy hand:
In all attempts my purpose I attaynde,
Though king, and queene, and most lordes of the land,
With all their power did often mee withstand:
For God gaue fortune, and my good behauiour
Did from their prince steale mee the people’s fauour.
4.
So that through mee in fieldes right manly fought,

By force myne vncle tooke king Henry twise:
As for my cosin Edward I so[1119] wrought,
When both our siers were slaine through rash aduice,
That hee atchiefde his father’s enterprise:
For into Scotland king and queene wee chased,
By meane whereof the kingdome hee embraced.
5.
Which after hee had enioyed[1120] in quiet peace,

(For shortly after was king Henry take,
And put in prison)[1121] his power to encrease,
I went to Fraunce and match[1122] him with a make
The French kinge’s daughter, whome hee did forsake:
For while with paine I brought this sute to passe,
Hee to a widdowe rashely wedded was.
6.
This made the French king shrewdly to mistrust,

That all my treaties had but ill pretence,
And when I sawe my king so bent to lust,
That with his fayth hee past not to dispence,
Which is a prince’s honour’s chiefe defence:
I could not rest till I had found a meane
To mend his misse, or els to marre him cleane.
7.
[Wherefore] I mee allied[1123] with his brother George,

Incensing him his brother to maligne,
Through many a tale I did against him forge:
So that through power that wee from[1124] Calais bring
And found at home, wee frayed so the king,
That hee did flie to[1125] Freseland ward amayne,
Whereby king Henry had the crowne againe.
8.
Than put wee th’earle[1126] of Worcester to death,

King Edward’s friend, a man to foule[1127] defamed:
And in the while came Edward into breath:
For with the duke of Burgoine so hee framed,
That with the power that hee to him had named,
Unlooked for hee came to England streight,
And got to Yorke, and tooke the towne by sleight.
9.
And after through the sufferaunce of my brother,

Which like a beast occasion fouly lost,
Hee came to London safe with many other,
And tooke the towne to good king Henrie’s cost:
Who was through him from post to piller tost,
Till th’earle[1128] of Oxforde, I, and other more,
Assembled power his freedome to restore.
10.
Whereof king Edward warned came with speede,

And camped with his hoast in Barnet towne,
Where wee right fearce encountred him in deed
On Easter day, right earely, on the downe:
There many a man was slaine and stricken downe,
On eyther side, and neither part did gaine,
Till that I and my brother both were slaine.[1129]
11.
For wee to hart[1130] our ouermatched men,

Forsooke our steedes, and in the thickest throng
Ran preacing forth on foote, and fought so then
That downe wee draue them were they neuer[1131] so
strong:
But ere this lucke[1132] had lasted very long
With nomber and force wee were so fouly cloyed,[1133]
And rescue faylde, that quite wee were destroyed.
12.
Now tell mee, Baldwine, hast thou heard or read

Of any man that did as I haue done?
That in his time so many armies led,
And victory at euery voyage won?
Hast thou euer[1134] heard of subiect vnder sonne,
That plaast and baast his soueraignes[1135] so oft
By enterchaunge, now low, and than aloft?
13.
Perchaunce thou thinkst my doinges were not such

As I and other doe affirme they were:
And in thy minde I see thou musest much
What meanes I vsde, that should mee so prefer:
Wherein, because I will thou shalt not erre,
The truth of all I will at large recyte,
The short is this: I was no hypocrite.
14.
I neuer did nor sayd saue what I ment,

The common weale was still my chiefest care:
To priuate gayne or glory was I neuer bent,[1136]
I neuer past[1137] vpon delicious fare:
Of needefull food my bourd was neuer bare,
No creditour did curse mee day by day,
I vsed playnnesse, euer pitch and pay.
15.
I heard poore[1138] souldiers and poore workemen whine

Because theyr dutyes were not truely[1139] payde:
Agayne I saw how people did repine
At those through whom theyr payment was[1140] delayde:
And proofe did oft assure (as scripture sayd)
That God doth wreke the wretched people’s greues,
I saw the polls cut of fro polling theues.
16.
This made mee alway iustly for to deale,

Which whan the people playnly vnderstoode,
Because they saw mee mynd the common weale,
They still endeuoured how to doe mee good,
Ready to spend theyr substaunce, life, and bloud,
In any cause where to I did them moue:
For sure they were it was for theyr behoue.
17.
And so it was: for when the realme decayed

By such as good king Henry sore abused,
To mend the state I gaue his enemies ayde:
But when king Edward sinfull prankes still vsed,
And would not mend, I likewise him refused,
And holp Henry, better[1141] of the twayne,
And in his quarell (iust I thinke) was slayne.
18.
And therefore, Baldwine, teach by proofe of mee,

That such as couet people’s loue to get,
Must see theyr workes and wordes in all agree,
Liue liberally and keepe them out of det,
On common welth[1142] let all theyr care be set:
For vpright dealing, dets payd, poore sustayned,
Is meane whereby all heartes are throwly gayned.[1143]
[As soone as the earle had ended this admonition: “Sure,”
sayd[1144] one, “I thinke the earle of Warwicke (although hee were a
glorious man) hath sayd no more of himselfe then what is true. For if
hee had not had notable good vertues, or vertuous qualities, and
vsed laudable meanes in his trade of life, the people would neuer
haue loued him as they did: but God be with him, and send his soule
rest, for sure his body neuer had any. And although he dyed, yet ciuil
warres ceased not. For immediately after his death came queene
Margaret with a power out of Fraunce, bringing with her her yong
son prince Edward: and with such friends as she found here, gaue
king Edward a battayl at Tewkesbury, where both she and her son
were taken prisoners with Eadmund duke of Somerset her chiefe
captayne: whose son lord Iohn, and the earle of Deuonshyre were
slayn in fight,[1145] and the duke himselfe with diuers other
immediately beheaded. Whose infortunes are worthy to be
remembred, chiefly prince Edward’s, whome the king for speaking
trueth cruelly stroke with his gauntlet, and his brethren
tyrannously[1146] murdered. But seing the time so far spent, I will
passe them ouer, and with them Fauconbridge that ioly rouer
beheaded at Southampton: whose commotion made in Kent, was
cause of sely Henrye’s destruction. And seing king Henry himselfe
was cause of the destruction of many noble princes, being of all
other most infortunate himselfe, I will declare what I haue noted in
his vnlucky life: who wounded in prison with a dagger, may lament
his wretchednesse in maner following.”]
How King Henry the sixte, a vertuous
Prince, was, after many other
miseries, cruelly murdered in the
Tower of London, the 22 of May, Anno
1471.[1147]
1.
If euer woefull wight had cause to rue his state,

Or by his ruefull plight to moue men mone his fate,
My piteous plaint may please my mishap to reherse,
Whereof the least most lightely heard, the hardest hart
may perce.
2.
What hart so hard can heare of innocence opprest

By fraud in worldly goods, but melteth in the brest?
Whan guiltlesse men bee spoilde, imprisoned for their
owne,
Who waileth not their wretched case to whom the case is
knowen?
3.
The lyon licks[1148] the sores of seely wounded shepe,

The dead man’s corse may[1149] cause the crocodile to
wepe,
The waues that waste the rocks refresh the rotten redes,
Such ruth the wrack of innocence in cruell creatures
bredes.
4.
What hart is then so hard but will for pity blede,

To heare so cruell lucke so cleare a life succede?
To see a seely soule with wo and sorrow sounst,[1150]
A king depriude, in prison pent, to death with daggers
dounst.[1151]
5.
Would God the day of birth had brought me to my bere,

Then had I neuer felt the chaunge of fortune’s chere:
Would God the graue had gript me in her greedy
woumbe,
Whan crown in cradle made me king with oyle of holy
thoumbe.
6.
Would God the rufull tombe had bene my royall throne,

So should no kingly charge haue made me make my
mone:
O that my soule had flowen to heauen with the ioy,
Whan one sort cryed, God saue the king, another, Viue le
Roy.
7.
So had I not bene washt in waues of worldly wo,

My minde to quiet bent, had not bene tossed so:
My frendes had ben aliue: my subiects not opprest:[1152]
But death, or cruell destiny, denied me this rest.
8.
Alas, what should we count the cause of wretches cares,
The starres do stirre them vp, astronomy declares:
Our[1153] humours, sayth the leache, the double true
deuines
To th’[1154] will of God, or ill of man, the doubtfull cause
assignes.
9.
Such doltish heades as dreame that all things driue by

haps,
Count lacke of former care for cause of after claps,
Attributing to man a power fro God bereft,
Abusing vs, and robbing him, through their most wicked
theft.
10.
But God doth guyde the world, and euery hap by skill,
Our wit, and willing power, are payzed by his will:
What wit most wisely wardes, and will most deadly vrkes,
Though all our powre would presse it downe, doth dash
our warest workes.
11.
Than desteny, our sinne, God’s will, or else his wreake,

Doe worke our wretched woes, for humours be too
weake,
Except wee take them so, as they prouoke to sinne,
For through our lust by humours fed all vicious deedes
beginne.
12.
So sinne and they be one, both working like effect,

And cause the wrath of God to wreake the soule infect,
Thus wrath and wreake deuine, man’s sinnes and
humours ill,
Concurre in one, though in a sort, ech doth a course
fulfill.
13.
If likewise such as say the welkin fortune warkes,

Take fortune for our fate and starres thereof the markes,
Then desteny with fate and God’s will all bee one:
But if they meane it otherwise, skath causers skies be
none.
14.
Thus of our heauy haps, chiefe causes bee but twayne,

Whereon the rest depend, and vnder put remayne:
The chiefe the will deuine, calde desteny and fate,
The other sinne, through humour’s holpe, which God
doth highly hate.
15.
The first apoynteth payne for good men’s exercise,

The second doth deserue due punishment for vice:
This witnesseth the wrath, and that the loue of God,
The good for loue, the bad for sinne, God beateth with
his rod.
16.
Although my sondry sinnes doe place mee with the

worst,
My haps yet cause mee hope to bee among the fyrst:
The eye that searcheth all and seeth euery thought,
Is iudge how sore I hated sinne, and after vertue sought.
17.
The solace of my soule my chiefest pleasure was,
Of worldly pomp, of fame, or game, I did not passe:
My kingdomes nor my crowne I prised not a crum:
In heauen were my riches heapt, to which I sought to
com.
18.
Yet were my sorrowes such as neuer man had like,

So diuers stormes at once, so often did mee strike:
But why, God knowes, not I, except it were for this,
To shewe by paterne of a prince, how brittle honour is.
19.
Our kingdomes are but cares, our state deuoide of stay,

Our riches ready snares, to hasten our decay:
Our pleasures priuy prickes, our vices to prouoke,
Our pompe a pumpe, our fame a flame, our power a
smouldring smoke.
20.
I speake not but by proofe, and that may many rue,

My life doth cry it out, my death doth try it true:
Whereof I will in brefe rehearse the[1155] heauy hap,
That, Baldwine, in his woefull warpe, my wretchednes
may wrap.
21.
In Windsore borne I was, and bare my father’s name,

Who wonne by warre all Fraunce to his eternall fame,
And left to mee the crowne, to bee receiued in peace
Through mariage made with Charles his heyre, vpon his
life’s decease.
22.
Which shortly did ensue, yet died my father furst,
And both the[1156] realmes were mine, ere I a yeare were
nurst:
Which as they fell too soone, so faded they as fast:
For Charles, and Edward, got them both or forty yeares
were past.
23.
This Charles was eldest sonne of Charles my father in

lawe,
To whome as heire of Fraunce, the Frenchmen did them
draw,
But Edward was the heire of Richard duke of Yorke,
The heyre of Roger Mortimer, slaine by the kerne of
Korke.
24.
Before I came to age Charles had recouered Fraunce,

And kild my men of warre, so happy was his chaunce:
And through a mad contract I made with Raynerd’s
daughter
I gaue and lost all Normandy, the cause of many a
slaughter.
25.
First of mine vncle Humfrey, abhorring sore this act,

Because I thereby brake a better precontract:
Than of the flattering duke that first the mariage made,
The iust rewarde of such as dare theyr princes ill
perswade.
26.
And I poore sely wretch abode the brunt of all,

My mariadge lust so sweete was mixt with bitter gall:
My wife was wise and good, had she ben rightly sought,
But our vnlawfull getting it, may make a good thing
nought.
27.
Wherefore warne men beware how they iust promise

breake,
Least proofe of paynfull plagues do cause them wayle
the wreake,
Aduise well ere they graunt, but what they graunt
performe:
For God will plague all doublenes although we feele no
worme.
28.
I falsly borne in hand, beleued I did well,

But all thinges bee not true that learned men doe tell:
My clergy sayd a prince was to no promise bound,
Whose wordes to be no gospell tho, I to my griefe haue
found.
29.
For after mariage ioynde queene Margaret and mee,

For one mishap afore, I dayly met with three:
Of Normandy and Fraunce, Charles got away my
crowne,
The duke of Yorke and other sought at home to put mee
downe.
30.
Bellona rang the bell at home and all abroade,

With whose mishaps amayne fell fortune did mee lode:
In Fraunce I lost my forts, at home the foughten field,
My kinred slayn, my friendes opprest, my selfe enforst to
yeeld.
31.
Duke Richard tooke mee twise, and forste mee to resine

My crowne and titles, due vnto my father’s lyne:
And kept mee as a warde, did all thinges as him list,
Till that[1157] my wife through bloudy sword had tane me
from[1158] his fist.
32.
But though we[1159] slew the duke my sorrowes did not

slake,
But like to Hydrae’s head still more and more awake:
For Edward, through the ayde of Warwicke and his
brother,
From one field draue mee to the Scots, and toke me in
another.
33.
Then went my friendes to wracke, for Edward ware the

crowne,
From[1160] which for nine yeares space his pryson held
me downe:
Yet thence through Warwicke’s worke I was agayne
releast,
And Edward driuen fro the realme, to seeke his friendes
by east.
34.
But what preuayleth paine, or prouidence of man,

To help him to good hap, whom destiny doth ban?
Who moyleth to remoue the rocke out of the mud,
Shall myre himselfe, and hardly scape the swelling of the
flud.
35.
This all my friendes haue founde, and I haue felt it so,

Ordaynd to be the touch of wretchednes and woe:
For ere I had a yeare possest my seat agayne,
I lost both it and liberty, my helpers all were slaine.
36.
For Edward first by stelth, and sith by gathred strength,

Arriude, and got to Yorke and London at the length:
Tooke mee and tyed mee vp, yet Warwicke was so stout,
Hee came with power to Barnet fielde, in hope to helpe
mee out:
37.
And there, alas, was slaine, with many a worthy knight:

O Lord, that euer such lucke should hap in helping right:
Last came my wife and sonne, that long lay in exile,
Defied the king, and fought a fielde, I may bewaile the
while.
38.
For there mine onely sonne, not thirteene yeares of age,

Was tane, and murdered straight by Edward in his rage:
And shortly I my selfe, to stint all furder strife,
Stabde with his brother’s bloudy blade in prison lost my
life.
39.
Lo, here the heauy haps which happened mee by heape,

See here the pleasaunt fruites that many princes reape,
The painefull plagues of those that breake theyr lawfull
bandes,
Their meede which may and will not saue their friendes
fro bloudy handes.
40.
God graunt my woefull haps, too greeuous to rehearce,

May teach all states to knowe, howe deepely daungers
pearce,
How fraile all honours are, how brittle worldly blisse,
That warned through my fearefull fate, they feare to doe
amisse.[1161]
[This tragedy ended, another sayd: “Either you or king Henry are
a good philosopher, so narowly to argue the causes of misfortunes?
but there is nothing to experience which taught, or might teach the
king this lesson. But to proceede in our matter, I finde mention here,
shortly after the death of this king, of a duke of Excester found dead
in the sea betweene Douer and Calais, but what hee was, or by what
aduenture hee died, maister Fabian hath not shewed, and maister
Hall hath ouerskipped him: so that except wee be friendlier vnto him,
hee is like to be double drowned, both in sea, and in the gulfe of
forgetfulnes.” About this matter was much talke, but because one
tooke vpon him to seeke out that story, that charge was committed to
him. And to bee occupied in the meane while, I haue found the story
of one drowned likewise, and that so notably, though priuely, that all
the world knew of it: wherefore I sayd: “Because night approacheth,
and that wee will lose no time, yee shall heare what I haue noted
concerning the duke of Clarence, king Edward’s brother, who all to
bee washed in wine, may bewayle his infortune after this maner.”]
How George Plantagenet, third sonne
of the Duke of Yorke, was by his
brother King Edward wrongfully
imprisoned, and by his brother
Richard miserably murdered the 11 of
Jan. An. 1478.[1162]
1.
The foule is fowle, men say, that files the nest:

Which makes me loth to speke now, might I chuse,
But seyng time vnburdened hath her brest,
And fame blowne vp the blast of all abuse,
My silence rather might my life accuse
Than shroude our shame, though fayne I would it so,
For truth will out, although the world say no.
2.
And therefore, Baldwine, hartely I[1163] thee beseche

To pause a while vpon my heauy playnt,
And vnneth though[1164] I vtter speedy speche,
No fault of wit nor folly makes[1165] mee faynt:
No heady drinkes haue gieuen my tongue attaint
Through quaffing craft: yet wine my witts confound,
Not of which I dranke,[1166] but wherein I drownd.[1167]
3.
What prince I am, although I neede not shewe,
Because my wine betrayes mee by the smell:
For neuer creature was[1168] soust in Bacchus dew
To death, but I, through fortune’s rigour fell:
Yet that thou maist my story better tell,
I will declare as briefly as I may,
My welth, my woe, and causers of decay.
4.
The famous house surnamde Plantagenet,

Whereat dame fortune frowardly did frowne,
While Bolenbroke vniustly sought to set
His lord king Richard quite beside the crowne,
Though many a day it wanted due renowne,
God so preserved[1169] by prouidence and grace,
That lawfull heyres did neuer fayle the race.
5.
For Lionell, king Edwarde’s eldest childe,[1170]

Both eame[1171] and heyr to Richard yssulesse,
Begot a daughter Phillip, whom[1172] vndefilde[1173]
The earle of March espousde, and God did blesse
With fruite assinde the kingdom to possesse:
I meane syr Roger Mortimer, whose heyre,
The earle of Cambridge, maried Anne the fayre.
6.
This earle of Cambridge, Richard clept by name,

Was sonne to Edmund Langley duke of Yorke:
Which Edmund was fift brother to the same
Duke Lionell, that all this lyne doth korke:
Of which two howses ioyned in a forke,
My father Richard, prince Plantagenet,
True duke of Yorke, was lawfull heyr beget.

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Managing Logistics Systems: Planning

and Analysis for a Successful Supply

John M. Longshore is Associate Professor of Management within the David B. O’Maley

Angela L. Cheatham is Assistant Professor of Management within the David B. O’Maley

John M. Longshore and

1 An Overview of the Logistics System 1

2 Logistics System Information Technology 19

3 The Measures of Supply Chain and Logistics System Support 35

4 Demand Management, Order Management, and Customer

5 Supply Chain and Logistics Systems Efficiency and

7 Packaging, Containerization, and Materials Handling 111

8 Warehouse Management and Operations 136

9 Transportation Systems Management 155

10 Supply Chain and Logistics System Network Design:

11 Aggregate Planning and Master Scheduling 197

12 Reverse Logistics and Sustainability 217

The Scope of Logistics

Industrial Logistic Support

Physical Supply Manufacturing Physical Distribution

Figure 1.1 Logistics Flows During the Production Process.

Production Sourcing Sales/Marketing Finance Logistics

Figure 1.2 Generic Logistics Organizational Structure.

Manpower and Design Interface and

Figure 1.3 Integrated Logistics Support Elements.

The Economic Impact of Logistics

Country Logistics as a Percentage of GDP Nominal GDP (2020)

The United States 8.5 20,936,600

The Increased Importance of Logistics

Changes in Consumer Behavior

A Reduction in Economic Regulation

The Systems and Total Cost Approaches to Logistics

Raw materials, parts, and Initial processing or Distribution to

Materials Management Physical Distribution

Relationships Within the Organization

Operations Cost Product Distribution Cost

Test and Support

Supply Support Cost

Retirement and Disposal

Figure 1.5 The Need For Total Cost.

1 Improving methods for defining system requirements as related to true customer

Life Cycle Project Commitment Cost (cumulative)

Opportunity Impact Cost Effectiveness

Figure 1.6 Impact of Logistics and Life-Cycle Cost-Effectiveness.

1 The initial definition of product/system support requirements.

System Design and Development Production and Deployment Operation

Program without Early Support Emphasis

Program with Early Emphasis on Supportability

Product/system Development Time frame

Chapter 1 Concept Questions

Information and Logistics Systems Topologies

To sustain competitiveness, organizations must successfully implement and exploit the

The Different Types of Information Management Systems

Office Support Systems

Management Information Systems

Explicit Knowledge Decision Support Systems

Information Management Information Systems

Transactional Processing Systems

Transactional Processing Systems

Data Warehouse Reader/Transceiver Tag

Figure 2.3 Standard RFID Configuration.

Management Information Systems

Order Management System Warehouse Management System Transportation Management System

Figure 2.4 Overview of a Logistics Information System.

1 An Overview of the Logistics System 1

2 Logistics System Information Technology 19

3 The Measures of Supply Chain and Logistics System Support 35

4 Demand Management, Order Management, and Customer

5 Supply Chain and Logistics Systems Efficiency and

7 Packaging, Containerization, and Materials Handling 111

8 Warehouse Management and Operations 136

9 Transportation Systems Management 155

10 Supply Chain and Logistics System Network Design:

11 Aggregate Planning and Master Scheduling 197

12 Reverse Logistics and Sustainability 217