Business logistics

Abstract

Business logistics has recently been defined as 'the process of managing all activities required to strategically move raw ma­ terials, parts, and finished inventory from vendors, between enterprise facilities, and to customers' . Many other definitions are available but this definition (1) stresses the fact that logistics concerns the strategical management level in the first place because of the over-all character of logistics and its long-term aspects; too long, emphasis has been laid on the operational aspects of logistics. The heart of the logistics concept is an integrated approach where cost savings are identified by considering the total costs of the system. This approach already implies the need for over-all management since the decisions about the different elements of the logistics system (transportation, inventories, facilities, unitization, communications) are traditionally made within different functions or departments. However, the need for over-all management becomes more stringent where the effectiveness of the company as a whole is considered i. e. where the logistics system has to be brought into balance with the production system and the marketing system (e. g. inventory levels vs. production-run lengths and customer service levels) . All elements of the logistiCS system have long-term aspects which have to be put into a planning system, c.q. the planning of a new transportation method, the planning of a new distribution centre.