LOGISTICS MANAGEMENT

ACM 25th SECTION-II

1. INTRODUCTION: Logistics is approached from a total system perspective and includes all the activities associated with the
initial design for logistics and supportability; the procurement and acquisition of the elements of support;
the supply, materials handling, and physical distribution of components; the transportation and
warehousing of products; and the maintenance and support of systems throughout their planned period of
utilization. Logistics, to include the various aspects of supply chain management and the follow-on
maintenance and support of systems.
Logistics must be considered as an inherent element in the system design process, as it constitutes a major
activity in the construction and/or production of a system and its components.
A logistics and support capability must be in place and effective throughout the period when the system is
in operational use, and logistics includes a necessary element of support when the system is retired and its
various components are processed for either recycling or disposal.

2. SCOPE OF LOGISTICS: Historically, the principles and concepts of logistics stem from specifics facets of activity within both the
commercial and defense sectors of management.
According to the American Heritage Dictionary, logistics is defined as the aspect of military operations
that deals with the procurement, distribution, maintenance and replacement of material and personnel.
Webster defines it as the aspect of military science dealing with the procurement, maintenance and
transportation of military material, facilities and personnel.
In the New Oxford American Dictionary, logistics is the detailed coordination of complex operations
involving many people, facilities and supplies.
In the commercial sector, where the emphasis is on the business-oriented activities associated primarily
with the distribution of relatively small products (e.g. consumables), logistics can be defined as that part
of the supply chain process that plans, implements, and controls the efficient, effective forward and
reverse flow and storage of goods, services, and related information between the point of origin and the
point of consumption in order to meet customers requirements. In this context, logistics activities
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include (1) the identification and management of suppliers, procurement and order processing, and
physical supply of materials/services from the sources of supply to the manufacturer or producer; (2) the
materials handling and inventory management of materials/services during and throughout the
manufacturing process; and (3) the sub-sequent transportation and physical distribution of products from
the manufacturer to the ultimate consumer (i.e. customer). These activities reflect only the forward flow.
Additionally, there is a reverse flow, which includes those activities that are required when materials and
products are retired, recycled/disposed of, and phased out of the inventory; that is, the flow of items from
the consumer back to the point of disposal. This reverse flow is known as reverse logistics.
Logistics in the commercial sector has traditionally been oriented toward managing the physical flow of
materials and products among organizations. Activities such as transportation and warehousing have been
available to ensure that the movement of products has been continuous and reliable. Purchasing
departments have been responsible for the procurement and acquisition of materials, and marketing
groups have been responsible for providing information to the customers both before and after each
transaction. In essence, the spectrum of logistics has (in many instances) included a number of different
organizational elements, working toward a given objective yet operating somewhat independently.

3. ELEMENTS OF LOGISTICS: The objective of logistics management is to define logistics and to relate the various activities to the flow
process. Here, the goal is to provide the right balance of resources applied throughout the system support
infrastructure In determining the resource requirements for the implementation of these activities, it can
be seen that there are needs for personnel, transportation, spares/repair parts and related inventories, test
and support equipment, facilities, data/documentation, computer resources and various combinations
thereof. In the planning, design and implementation of logistics, one needs to ensure that these resources
are fully integrated, as the interactions among these various elements are many. A brief description of
each of the elements is presented below: 1. Logistics and maintenance support planning: - These are those ongoing and iterative planning,
organization, and management activities necessary to ensure that the logistics requirements for any given
program are properly coordinated and implemented. Initial planning and analyses lead to the
establishment of requirements for logistics and the overall support of the system throughout its life cycle.
Maintenance planning should result in the integration of the various elements of support with the prime
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mission-related elements of the system and should lead to the definition and development of the
infrastructure. A comprehensive logistics plan needs to be implemented through the establishment of an
organizational structure, along with the necessary management and control functions to ensure that the
plan is properly carried out. The key objective here is to integrate the elements with the activities.
2. Logistics, maintenance and support personnel: - Personnel required to perform unique logistics and
system maintenance activities are included in this category. Such activities include the initial provisioning
and procurement of items of support, production-related logistics functions, the installation and checkout
of the system and its elements at the users operational site, customer service functions (field service), the
sustaining support of the system (prime mission-related elements and elements of the maintenance and
support infrastructure) throughout its planned period of use, and those functions required for the
retirement and recycling/disposal of material. Personnel at all levels of maintenance, mobile teams and
operators/maintainers at special test facilities and calibration laboratories are included.
3. Training and Training Support: - This category includes all personnel, equipment, facilities,
data/documentation and associated resources necessary for the training of operational and maintenance
personnel, to include both initial and replenishment (replacement) training.
4. Supply Support spares/repair parts and associated inventories: - This element includes all spares
(repairable units, assemblies etc.), repair parts (non-repairable components), consumables (liquids,
lubricants, gases, and disposable items), special supplies and related inventories needed to maintain the
prime mission-related equipment, computers and software, test and support equipment, transportation and
handling equipment, training equipment, communications equipment and facilities/utilities.
5. Computer resources (hardware and software): - This category covers all computers, associated
software, connecting components, networks and interfaces necessary to support the day-to-day flow of
information for all logistics functions, scheduled and unscheduled maintenance activities, and special
monitoring and reporting requirements such as those pertaining to access to CAD/CAM/CAS data, the
implementation of condition monitoring programs, and in support of system diagnostic capabilities.
6. Technical data, reports and documentation: - Technical data may include system installation and
checkout procedures, operating and maintenance instructions, inspection & calibration procedures,
overhaul instructions, facilities data, logistics provisional and procurement data, engineering design data
(specifications, drawings etc.), system modification instructions, supplier data, system operational &
maintenance data, and supporting databases.
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7. Maintenance and support facilities & utilities: - This category includes all special facilities that are
unique and required to support logistics activities, to include storage buildings and warehouses and
maintenance facilities at all levels. Physical plant, portable buildings, mobile vans, personnel housing
structures, intermediate-level maintenance shops, calibration laboratories and special repair shops (depot,
overhaul, material suppliers) must be considered.
8. Packaging, handling, storage/warehousing and transportation (distribution): - This category of
logistics includes all materials, equipment, special provisions, containers (reusable and disposable), and
supplies necessary to support the packaging, safety and preservation, storage, handling, and/or
transportation of the prime mission-related elements of the system, personnel, spares and repair parts, test
& support equipment, technical data, computer resources and mobile facilities.
9. Test, measurement, handling and support equipment: - This category includes all tools, condition
monitoring equipment, diagnostic and checkout equipment, special test equipment, metrology and
calibration equipment, maintenance fixtures and stands, and special handling equipment required to
support operational and maintenance functions throughout the forward and reverse flows.
10. Logistics information: - This item refers to the resources necessary to ensure that an effective and
efficient logistics information flow is provided throughout and to the organizations responsible for all the
activities. This flow includes the necessary communication links among the customer, producer (prime
contractor), subcontractors, suppliers and supporting maintenance organizations. It is essential that the
proper type and amount of information be provided to the appropriate organizational elements, in the
proper format, and in a reliable and timely manner, with the necessary security provisions included.

4. SCHEDULING OF LOGISTICS TASKS: The scheduling of logistic tasks may be accomplished using one or a combination of techniques such as
the simple bar chart, milestone chart, program network, gantt chart and line of balance.
Bar Chart/Milestone Chart
A simple bar chart includes the presentation of tasks in a sequential format showing the time span of
effort for each activity. The milestone chart includes a presentation of program events in terms of required
start and completion times, specific identifiable outputs. This technique is one of the most popular
scheduling techniques for engineering design and early logistic support activities , this technique does not

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always force the integration of the many and varied tasks required in fulfilling the requirement for most
logistics programs.
Program Network scheduling
The program evaluation and review technique (PERT) is a scheduling approach that combines events and
activities into a program network. This technique is ideally suited to early planning where precise time
data are not readily available and is effective in showing the interrelationships of combined activities.

5. COST ESTIMATING AND CONTROL: One of the major challenges in logistics management constitutes the development of cost information for
the logistics tasks. In preparation of cost estimates extreme care must be exercised to ensure that the
following area is properly addressed: 1. A logistic program includes a number of tasks that are initiated during the conceptual design
phase, and are progressively updated as the system development effort evolves through the
preliminary system design and detail design and development phases.
2. Within the overall logistic domain, there are many tasks that , although they are oriented to
different end items, share some commonalty in their completion.
3. The full implementation of logistics tasks may involve a significant amount of supplier activity,
particularly for large scale systems, and a major portion of this activity may be of an international
nature.
4. The implementation of a logistic program is often accomplished through a matrix type of
organization structure. if care is not taken, this approach can result in additional costs.
Good cost control is important to any organization regardless of size. This is particularly true in our
current environment where resources are limited and competition is high. Cost control implies good
overall cost management, which includes cost estimating, cost accounting , cost monitoring, cost analysis,
reporting , and the necessary control functions . more specifically , the following activities are applicable.
1. Define the element of work.
2. Integrate tasks into the work breakdown structure.

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3. Develop cost estimates for each project task.

4. Develop a cost data collection and reporting capabilities.
5. Develop a procedure for evaluation and corrective action.
The extent to which a manager will be able to control the program depends on the visibility that he or she
has in assessing the various program elements, particularly those involving high risk.

6 .MAJOR INTERFACES WITH OTHER PROGRAM ACTIVITIES

The number of interfaces that exist between logistics and other program activities are numerous. Logistic
with its highly interdisciplinary nature, is dependent on many other organizations. An effective
communication link between the ILSP and other key program plans must be provided. Of particular
interest are the following
1. System engineering management plan (SEMP). It is the process of bringing a system into being
and includes the integration of design disciplines into the overall engineering effort.
2. Configuration management plan. Configuration management constitutes the process that
identifies the functional and physical characteristics of an item during its life cycle, controls
changes to these characteristics, and records the reports the processing of changes in their
implementation status.
3. Test and evaluation master plan (TEMP). this plan , usually develop for most large scale
programs during the conceptual design phase, identifies the need for system test and evaluation ,
describes test and evaluation requirements , identifies testing procedures , define resource
requirements, and describes data recording analysis and reporting requirements.
4. Production/manufacturing plan.

A production plan is developed as the system design

configuration is defined and make or buy decision lead to the identification of production
requirements. Production requirements not only include prime mission oriented system
components, but selected elements of support.
5. Total quality management plan (TQMP). This plan covers the requirement for total quality
control (TQC), quality assurance , statistical quality control (TQC), quality assurance, statistical
quality control (SQC), statistical process control (SPC), and all of those activities that support the
overall quality of the system and its components .
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LOGISTICS MANAGEMENT

ACM 25th SECTION-II

7. LOGISTICS PROGRAM PLANNING:

Logistics In System Life Cycle: The life cycle will evolve from the definition of need and progress through a series of phases.
These phases reflect distinct categories of activity, leading from the initial determination of
system requirements to the description of a specific design configuration, the production and
construction of the system, system utilization by the customer, sustaining maintenance and
support, and ultimate system retirement.
Although the acquisition process for all systems, whether large or small, will involve transition
through these basic phases, the specific format and depth of activity may vary from program to
program, depending on the type of system and its mission, the extent to which new design is
required and its complexity, schedule and budget

constraints, and many other related factors.

Thus, the detailed requirements for a program must be appropriately tailored to the particular
need.

Development Of Specifications: There are different classes of specifications as one proceeds through the life cycle. A brief
description of each class is presented.
1. System specification: Includes the technical, performance, operational, and support
characteristics for the system as an entity. Operational requirements, the maintenance
concept, the results from the feasibility analysis, and a description of system requirements
in functional terms are presented.
2. Development specification: Includes the technical requirements for any element or
component below the system level where research, design, and development are
accomplished.
3. Product specification: Includes the technical requirements for any item below the top
system level that is currently in the inventory and can be procured off the shelf.
4. Process specification: Includes the technical requirements that cover a process associated
with any element or component of the system.
5. Material specification: Includes the technical requirements that pertain to raw materials,
mixtures, and semi fabricated materials that are used in the manufacture and assembly of
a product.

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Development Of Planning Documentation: Logistics planning is initiated early in the conceptual design phase when the technical
requirements for the system are being defined. Although these technical requirements for the
system are presented through system specification, the program planning requirements are
identified through development of a preliminary integrated logistic support plan. This document
is a living plan, updated on a progressive basis and leads to the preparation of a formal ILSP
during the preliminary design phase.

Logistics planning begins with the identification of program objectives and projected tasks by
phase. Typical tasks for a large scale program have following objectives:

1. Define the requirements and plan for logistics;

2. Design the system for supportability;
3. Identify, acquire, and distribute the required elements of logistics for the sustaining lifecycle support of the system during operational use;
4. Measure and evaluate, or assess, the effectiveness of the system supportability throughout
the consumer use period.
For the purpose of further clarification, a list of selected sections of proposed document content
follows.

Detailed Maintenance Plan

Supportability Analysis Plan(SAP)

Reliability and Maintenance Plan

Supply Support Plan

Test and Support Equipment Plan

Personnel and Training Plan

Technical Data Plan

Packaging, Handling, Storage, and Transportation Plan

Facilities Plan

Computer Resources Plan

Distribution and Customer Support Plan

Postproduction Support Plan

System Retirement Plan

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Development of A Work Breakdown Structure (WBS)

Given the identification of logistics program tasks, it is appropriate to integrate these tasks into a
work breakdown structure (WBS). The WBS is a product oriented family tree that leads to the
identification of the activities, functions, tasks, work packages. Individual work packages are then
identified with specific blocks in the WBS.
The WBS is a logical separation of work- related units, linking objectives and activities with
resources. During the early stages of program planning, a summary work breakdown structure is
generally prepared by the customer and is included in a request for proposal or in an invitation for
bid. This structure is developed from the top down for budgetary and reporting purposes, covers
all program functions, and generally includes three levels of activity. As program planning
progresses and individual contract negotiations are consummated between the customer and the
contractor, the WBS is developed further and adapted to a particular contract or procurement
action, resulting in a contract work breakdown structure. It is tailored for each phase of program
activity.
Work packages can be shown by different blocks and blocks are then related to organization
groups, departments, branches, suppliers, and so on. Costs are estimated for each work package
and identified by WBS block. The WBS is structured and coded in such a manner that program
cost may be initially targeted and then collected against each block. Costs may be accumulated
both vertically and horizontally to provide summary figures for various categories of work. The
cost data, combined with the appropriate schedules, provide management with the necessary tools
for project evaluation and control.

8. Organisation of logistics:Organization is the combining of resources in such a manner as to fulfill a need. Organisation comprise
group of individuals of varying levels of expertise combined into a social structure of some type to
accomplish one or more functions. Organizational will vary with the functions to be performed and the
results will depend on the established goals and objectives, the resources available, the communication
and the working relationships of the individual participants, motivation and many other factors.

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In logistics acquiring and maintaining the proper balance of resources to meet the stated objectives is a
challenge .The non-homogeneity of functions and the diversity of personnel background and skills
necessitates a well integrated, highly inter-disciplinary, controlled team approach. The logistics
organisation may take the form of a pure functional structure.

Customer, Producer, and supplier Relationships

To address the subject of organisation for logistics one need to understand the environment in
which the logistics functions are performed. For a relatively large project the logistics may appear
at several levels. Always the question is : who is responsible and has the authority to perform the
logistics functions as defined?
In some instances , the consumer may assume full responsibility for the overall design and
integration of the system. Top system level-design , preparation of system specifications ,
preparation of the ILSP and completion of tasks are accomplished by the customers organisation.
In other cases , although the customer provides overall guidance in terms of issuing a general
statement of work (SOW) or an equivalent contractual document , the producer or prime
contractor is held responsible for the system design and integration.

Customer Organisation and functions (consumer)

The customer/consumer organisation may range from one small group of individuals to an
industrial firm , a commercial business , an academic institution , a governmental lab, or a
military service. The customer may be the ultimate user of the system or may be the procuring
agency for a user.
There are variety of approaches and associated organisational relationships, involved in the
design and development of new systems. The objective is to identify the overall program manager
and to pinpoint the responsibility and authority for logistics management.
In the event that the logistics responsibility is delegated to the producer, the customer must
support this decision by providing the necessary top-down guidance and managerial backing. The
challenge for the customer is to prepare a good comprehensive, well written , and a clear
statement of work (SOW) to be implemented by the producer. This SOW in turn forms the basis
for the negotiation of a contractual arrangement between the customer and the producer or
contractor.

Producer Organisation and functions (contractors)

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For most large scale projects the producer (or the contractor) will undertake the bulk of activities
associated with the design and development of a new system. The customer will specify systemlevel and program requirements through the preparation of a request of proposal (RFP) or an
invitation for bid (IFB) and various industrial firms will respond in terms of a formal proposal. As
there may be a number of responding proposals a formal competition is initiated , individual
proposals are reviewed and evaluated , negotiations are consummated and a selection is made.
The successful contractor will then proceed with the proposed project.
In addressing the requirements, it is essential that the successful contractor have access to all
information and data leading up to the requirements specified in the technical portions of
RFP/IFB . In several instance, the RFP will include a system specification covering the technical
aspects of system design and development, along with a SOW directed towards program tasks
and the management aspects of system design and development along with a SOW directed
towards program tasks and the management aspects of a program.
The organisational patterns are discussed in the section follows
Functional organisation structure
Enables the development of a better technical capability for the organisation. Specialists
can be grouped to share knowledge . Experiences from one project can be transferred to
other projects though personnel exchange. Cross training is relatively easy. The
organisation can respond more quickly to a specific requirement through the careful
assignment of personnel in the organisation with the required skills in a given area . The
manager has a greater degree of flexibility in the use of personnel and a broader labor
base with which to work. Greater technical control can be maintained . It is difficult to
maintain an identify with a specific project . No single individual is responsible for the
total project or the integration of its activities. It is hard to pinpoint specific project
responsibilities. Concepts and techniques tend to be functionally oriented with little
regard towards project requirements. The tailoring of technical requirements to a
particular project is discouraged.
Product- line / project organisation structure
As industrial firms grow and there are more products being developed, it is often
convenient to classify these products into common groups and to develop a product-line
organisation structure. The line of authority and responsibility for a given project are
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LOGISTICS MANAGEMENT

ACM 25th SECTION-II

clearly defined. Project participants work directly for the project manager ,
communication channels within the project are strong and there is no question as
priorities. A good project orientation is provided. There is a strong customer orientation ,
a company focal point is readily identified and the communication processes between the
customer and the contractor are relatively easy to maintain. A rapid response to customer
needs is realised.
The application of new technologies tends to suffer without strong functional groups and
the opportunities for technical interchange between projects. As projects go on and on ,
those technologies that are applicable at project inception continue to be applied on a
repetitive basis. There is no perpetuation of technology and the introduction of new
methods and procedures is discouraged.
Matrix organisation structure
The project manager can provide the necessary strong controls for the project while
having ready access to the resources from many different functionally oriented
departments. The functional organisation exists primarily as support for the projects. A
strong technical capability can be developed and made available in response to project
requirements in an expeditious manner.
Each project organisation operates independently . In an attempt to maintain an identity ,
separate operating procedures are developed , separate personnel requirements are
identified and so on . Extreme care must be taken to guard against possible duplication of
efforts. From a company viewpoint , the matrix structure may be more costly in terms of
administrative requirements. Both the project and the functional areas of activity require
similar administrative controls.
Logistics Organisation
The project manager can provide the necessary strong controls for the project while
having ready access to the resources from many different functionally oriented
departments. The functional organisations exist primarily as support for the projects. A
strong technical capability can be developed and made available in response to project
requirements in an expeditious manner.
Each project organisation operates independently. In an attempt to maintain an identity ,
separate operating procedures are developed , separate personnel requirements
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LOGISTICS MANAGEMENT

ACM 25th SECTION-II

identified and so on. Extreme care must be taken to guard against possible duplication of
efforts. From a company viewpoint , the matrix structure may be more costly in terms of
administrative requirements . Both the project and the functional areas of activity require
similar administrative controls.

9. STAFFING THE ORGANISATION: The interdisciplinary nature of logistics is such that a broad spectrum of personnel backgrounds and skills
is required for the staffing of a logistics organization. There are planning and management functions,
details design engineering functions, analysis functions, technical writing functions, provisioning and
procurement functions, transportation and distribution functions, maintenance and customer service
functions, and so on.
Logistics management is the planning, implementation and control of the processes involved in the flow
and storage of materials from the point of origin (as raw materials) through the various value-added stages
to the point of consumption (as finished goods). It has been estimated that logistics costs account for 30%
of the cost of doing business. Effective logistics management can lower costs, provide better customer
service and quality, which translate into strategic competitive advantage and profitability for the
company. This course provides an introduction to Logistics Management. Topics covered include the
strategic important of logistics management, logistics network design, location and layout planning,
production and transportation planning, benchmarking a supply chain, international logistics issues, and
new trends in distribution and logistics management.
Management and control
Successful program implementation includes the day to day managerial functions associated with the
influencing. Todays competitive industry environment is characterized by unpredictable and changing
world-wide markets. Mass production can no longer capture market shares and gain higher profits by
producing large volumes of standard products. Companies are forced to search for sustainable strategies
for surviving and thriving within the global competition. Mass customization has received much attention.
Mass customization is the use of flexible processes and organizational structures to produce varied and
often individually customized products and services at the price of standardized, mass-produced
alternatives. It seems to be an unreachable ideal until recent advances in product design, e-manufacturing
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and information technologies made this change possible. Those enabling technologies significantly
enlarge the application field of mass customization in many ways. A wide range of industries including
textiles, automotive, engineering, aerospace, consumer products, food, as well as firms in distribution and
logistics, have been influenced by this innovative strategy. It not only changes the way customers make
purchases, but also has strong influence on how products can be made. Mass customization has been
viewed as a new business paradigm that can be used as a cornerstone for a new strategic approach.
Business Week 2000 said, The mass market of the 20th century is giving way to a market of one: mass
customization. The realization of mass customization implies an integrated system, as depicted. Design
For Mass Customization (DFMC) is based on the concept of Product Family Architecture and
postponement of product variety, which involves delaying activities throughout the supply chain until
customer orders are received with the intention of customizing products. Success in Mass Customization
Manufacturing (MCM) is achieved by swiftly reconfiguring operations, processes, and business
relationships with respect to customers individual needs and dynamic manufacturing requirements. A
new level of information integration is required both within the organization and with external parties. It
means sharing of information to deliver value to the customer all the way from distribution back through
manufacturing and design.

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