Logistic engineering
Encyclopedia
Logistics engineering is a branch of systems engineering
dedicated to the scientific organization of the purchase, transport
, storage, distribution
, and warehousing of materials and finished goods.
Logistics is generally a cost centre
service activity, but provides value via improved efficiency and customer satisfaction. It can quickly lose that value if the customer becomes dissatisfied. The end customer can include another process or work center inside of the manufacturing facility, a warehouse where items are stocked or the final customer who will use the product.
Another much more popular derivative and a complete usage of the logistic term which has appeared in recent years is the supply chain
. The supply chain also looks at an efficient chaining of the supply / purchase and distribution sides of an organisation. While Logistics looks at single echelons with the immediate supply and distribution linked up, supply chain looks at multiple echelons/stages, right from procurement of the raw materials to the final distribution of finished goods up to the customer. It is based on the basic premise that the supply and distribution activities if integrated with the manufacturing / logistic activities, can result in better profitability for the organisation. The local minimum of total cost of the manufacturing operation is getting replaced by the global minima of total cost of the whole chain, resulting in better profitability for the chain members and hence lower costs for the products.
Logistics engineering as a discipline is also a very important aspect of systems engineering
that includes reliability engineering
. It is the science and process whereby reliability, maintainability, and availability are designed into products or systems. It includes the supply and physical distribution considerations above as well as more fundamental engineering considerations. For example, if we want to produce a system that is 95% reliable (or improve a system to achieve 95% reliability), a logistics engineer understands that total system reliability can be no greater than the least reliable subsystem or component. Therefore our logistics engineer must consider the reliability of all subcomponents or subsystems and modify system design accordingly. If a subsystem is only 50% reliable, one can concentrate on improving the reliability of that subsystem, design in multiple subsystems in parallel (5 in this case would achieve approximately 97% reliability of that subsystem), purchase and store spare subsystems for rapid change out, establish repair capability that would get a failed subsystem back in operation in the required amount of time, and/or choose any combination of those approaches to achieve the optimal cost vs. reliability solution. Then the engineer moves onto the next subsystem.
Logistics engineers work with complex mathematical models that consider elements such as mean time between failures (MTBF), mean time to failure (MTTF), mean time to repair
(MTTR), failure mode and effects analysis
(FMEA), statistical distributions, queueing theory
, and a host of other considerations. Obviously, logistics engineering is a complex science that considers tradeoffs in component/system design, repair capability, training, spares inventory, demand history, storage and distribution points, transportation methods, etc., to ensure the "thing" is where it's needed, when it's needed, and operating the way it's needed all at an acceptable cost.
Another performance metric equally important is the end customer fill rate. It is the percentage of customer demand which is satisfied immediately off-the-shelf (from on-site inventory). An alternative to fill rate, is system availability
.
In recent years, the United States Department of Defense
(DoD) has advocated the use of performance-based logistics (PBL) contracts to manage costs for support of weapon system
s.
Systems engineering
Systems engineering is an interdisciplinary field of engineering that focuses on how complex engineering projects should be designed and managed over the life cycle of the project. Issues such as logistics, the coordination of different teams, and automatic control of machinery become more...
dedicated to the scientific organization of the purchase, transport
Transport
Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...
, storage, distribution
Distribution (business)
Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...
, and warehousing of materials and finished goods.
Logistics is generally a cost centre
Cost centre
In business, a cost centre or cost center is a division that adds to the cost of an organization, but only indirectly adds to its profit. Typical examples include research and development, marketing and customer service. There are some significant advantages to classifying simple, straightforward...
service activity, but provides value via improved efficiency and customer satisfaction. It can quickly lose that value if the customer becomes dissatisfied. The end customer can include another process or work center inside of the manufacturing facility, a warehouse where items are stocked or the final customer who will use the product.
Another much more popular derivative and a complete usage of the logistic term which has appeared in recent years is the supply chain
Supply chain
A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...
. The supply chain also looks at an efficient chaining of the supply / purchase and distribution sides of an organisation. While Logistics looks at single echelons with the immediate supply and distribution linked up, supply chain looks at multiple echelons/stages, right from procurement of the raw materials to the final distribution of finished goods up to the customer. It is based on the basic premise that the supply and distribution activities if integrated with the manufacturing / logistic activities, can result in better profitability for the organisation. The local minimum of total cost of the manufacturing operation is getting replaced by the global minima of total cost of the whole chain, resulting in better profitability for the chain members and hence lower costs for the products.
Logistics engineering as a discipline is also a very important aspect of systems engineering
Systems engineering
Systems engineering is an interdisciplinary field of engineering that focuses on how complex engineering projects should be designed and managed over the life cycle of the project. Issues such as logistics, the coordination of different teams, and automatic control of machinery become more...
that includes reliability engineering
Reliability engineering
Reliability engineering is an engineering field, that deals with the study, evaluation, and life-cycle management of reliability: the ability of a system or component to perform its required functions under stated conditions for a specified period of time. It is often measured as a probability of...
. It is the science and process whereby reliability, maintainability, and availability are designed into products or systems. It includes the supply and physical distribution considerations above as well as more fundamental engineering considerations. For example, if we want to produce a system that is 95% reliable (or improve a system to achieve 95% reliability), a logistics engineer understands that total system reliability can be no greater than the least reliable subsystem or component. Therefore our logistics engineer must consider the reliability of all subcomponents or subsystems and modify system design accordingly. If a subsystem is only 50% reliable, one can concentrate on improving the reliability of that subsystem, design in multiple subsystems in parallel (5 in this case would achieve approximately 97% reliability of that subsystem), purchase and store spare subsystems for rapid change out, establish repair capability that would get a failed subsystem back in operation in the required amount of time, and/or choose any combination of those approaches to achieve the optimal cost vs. reliability solution. Then the engineer moves onto the next subsystem.
Logistics engineers work with complex mathematical models that consider elements such as mean time between failures (MTBF), mean time to failure (MTTF), mean time to repair
Mean time to repair
Mean time to repair is a basic measure of the maintainability of repairable items. It represents the average time required to repair a failed component or device. Expressed mathematically, it is the total corrective maintenance time divided by the total number of corrective maintenance actions...
(MTTR), failure mode and effects analysis
Failure mode and effects analysis
A failure modes and effects analysis is a procedure in product development and operations management for analysis of potential failure modes within a system for classification by the severity and likelihood of the failures...
(FMEA), statistical distributions, queueing theory
Queueing theory
Queueing theory is the mathematical study of waiting lines, or queues. The theory enables mathematical analysis of several related processes, including arriving at the queue, waiting in the queue , and being served at the front of the queue...
, and a host of other considerations. Obviously, logistics engineering is a complex science that considers tradeoffs in component/system design, repair capability, training, spares inventory, demand history, storage and distribution points, transportation methods, etc., to ensure the "thing" is where it's needed, when it's needed, and operating the way it's needed all at an acceptable cost.
Performance metrics
Different performance metrics (measures of performance) are used to examine the efficiency of an organisation's logistics. The most popular and widely used performance metric is the landed cost. The landed cost is the total cost of purchasing, transporting, warehousing and distributing raw materials, semi-finished and finished goods.Another performance metric equally important is the end customer fill rate. It is the percentage of customer demand which is satisfied immediately off-the-shelf (from on-site inventory). An alternative to fill rate, is system availability
Availability
In telecommunications and reliability theory, the term availability has the following meanings:* The degree to which a system, subsystem, or equipment is in a specified operable and committable state at the start of a mission, when the mission is called for at an unknown, i.e., a random, time...
.
In recent years, the United States Department of Defense
United States Department of Defense
The United States Department of Defense is the U.S...
(DoD) has advocated the use of performance-based logistics (PBL) contracts to manage costs for support of weapon system
Weapon system
Weapon System is a United States military term that designated, along with a weapon system number , military experimental systems prior to official naming Weapon System is a United States military term that designated, along with a weapon system number (e.g., WS-110), military experimental (MX)...
s.
See also
- physical distributionDistribution (business)Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...
, not to be confused with a statistical distribution - Document automationDocument automationDocument automation is the design of systems and workflow that assist in the creation of electronic documents. These include logic based systems that use segments of pre-existing text and/or data to assemble a new document. This process is increasingly used within certain industries to assemble...
- Industrial engineeringIndustrial engineeringIndustrial engineering is a branch of engineering dealing with the optimization of complex processes or systems. It is concerned with the development, improvement, implementation and evaluation of integrated systems of people, money, knowledge, information, equipment, energy, materials, analysis...
- logisticsLogisticsLogistics is the management of the flow of goods between the point of origin and the point of destination in order to meet the requirements of customers or corporations. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and...
- Liquid logisticsLiquid LogisticsLiquid Logistics is a special category of logistics that relates to liquid products, and is used extensively in the "Supply Chain for Liquids" discipline....
- Logistics support analysis
- Operations researchOperations researchOperations research is an interdisciplinary mathematical science that focuses on the effective use of technology by organizations...
- Supply chain managementSupply chain managementSupply chain management is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers...
External links
- The Council of Logistics Engineering Professionals
- SOLE] – The International Society of LogisticsInternational Society of LogisticsThe International Society of Logistics is a non-profit organization devoted to the development and promotion of logistics, including improvements in technology, education and management...
- Definition of Landed Cost by 3CE