Logistics Logistics is the art and science of managing and controlling the flow of goods,energy, information and other

resources like products,services, and people, fromthe source of production to the marketplace. It is difficult to accomplish anymarketingor manufacturingwithout logistical support. It involves the integrationof information,transportation,inventory,warehousing, material handling, and packaging. The operating responsibility of logistics is the geographica repositioning of raw materials, work in process, and finished inventories whererequired at the lowest cost possible. 1. O verwiew of Logistics

The word of logistics originates from the ancientGreek logos ( ), whichmeans

ratio, word, calculation, reason, speech, oration .Logistics as a concept is considered to evolve from the military's need to supplythemselves as they moved from their base to a forward position. In ancient Greek,Roman and Byzantine empires, there were military officers with the title Logistikas who were responsible for financial and supply distribution matters.The Oxford English dictionary defines logistics as: The branch of military sciencehaving to do with procuring, maintaining and transporting material, personnel and facilities. Another dictionary definition is: "The time related positioning of resources." As such, logistics is commonly seen as a branch of engineeringwhich creates " people systems " rather than "

machine systems ". Military logistics Inmilitary logistics, expertsmanagehow and when to move resources to the places they are needed. In military science, maintaining one's supply lines whiledisrupting those of the enemy is a crucialsome would say the most crucial element of military strategy, since an armed force without food, fuel andammunition is defenseless.The Iraq war was a dramatic example of the importance of logistics. It had becomevery necessary for the US and its allies to move huge amounts of men, materialsand equipment over great distances. Led by Lieutenant GeneralWilliam Pagonis,Logistics was successfully used for this movement. The defeat of the British in theAmerican War

of Independence, and the defeat of RommelinWorld War II, have been largely attributed to logistical failure. The historical leadersHannibal BarcaandAlexander the Greatare considered to have been logistical geniuses. 2. Logistics Management Logistics Management is that part of thesupply chainwhich plans, implements andcontrols 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' requirement Business logistics Logistics as a business concept evolved only in the 1950s. This was mainly due tothe increasing complexity of supplying one's business with materials and shippingout products in an increasingly globalized supply chain, calling for experts in thefield who are called Supply Chain Logisticians. This can be defined as having theright item in the right quantity at the right time for the right price and is thescience of process and incorporates all industry sectors. The goal of logistic work is to manage the fruition of project life cycles,supply chainsand resultantefficiencies.In business, logistics may have either internal focus(inbound logistics), or externalfocus (outbound logistics) covering the flow and storage of materials from point of origin to point of consumption (seesupply chain management). The main functionsof a logistics manager includeInventory

Management, purchasing,transport,warehousing, and the organizing and planningof these activities. Logisticsmanagers combine a general knowledge of each of these functions so that there is acoordination of resources in an organization. There are two fundamentally differentforms of logistics. One optimizes a steady flow of material through a network of transportlinks and storage nodes. The other coordinates asequenceof resources tocarry out some project. Logistics as a concept is considered to evolve from themilitary's need to supply themselves as they moved from their base to a forward position. In ancient Greek, Roman and Byzantine empires, there were militaryofficers with the title Logistikas who were responsible for financial and supplydistribution matters. Production logistics The term is used for describing logistic processes within an industry. The purposeof production logistics is to ensure that each machine and workstation is being fedwith the right product in the right quantity and quality at the right point in time.The issue is not the transportation itself, but to streamline and control the flowthrough the value adding processes and eliminate non-value adding ones.Production logistics can be applied in existing as well as new plants.Manufacturing in an existing plant is a constantly changing process. Machines areexchanged and new ones added, which gives the opportunity to improve the production logistics system accordingly. Production logistics provides the means toachieve customer response and capital efficienc 3.Commercial vehicle operation Commercial Vehicle Operations is an application of Intelligent TransportationSystemsfor trucks.A typical system would be purchased by the managers of a trucking company. Itwould have asatellite navigation system, a smallcomputer and a digital radio ineach truck. Every fifteen minutes the computer transmits where the truck has been.The digital radio service forwards the data to the central office of the truckingcompany. A computer system in the central office manages thefleetin real timeunder control of a team of dispatchers.In this way, the central office knows where its trucks are. The company tracksindividual loads by using barcoded containersand palletsto track loads combinedinto a larger container. To minimize handling-expense, damage and waste of vehicle capacity, optimal-sized pallets are often constructed at distribution points togo to particular destinations.A good loadtracking system will help deliver more than 95% of its loads via truck,on planned schedules. If a truck gets off its route, or is delayed, the truck can bediverted to a better route, or urgent loads that are likely to be late can be diverted toair freight. This allows a trucking company to deliver a true premium service atonly slightly higher cost. The best proprietary systems, such as the one operated byFedEx, achieve better than 99.999%

on-time delivery.Load-tracking systems usequeuing theory,linear programmingandminimumspanning treelogic to predict and improve arrival times. The exact means of combining these are usually secret recipes deeply hidden in the software. The basicscheme is that hypothetical routes are constructed by combining road segments,and then poor ones are eliminated using linear programming.The controlled routes allow a truck to avoid heavy traffic caused by rush-hour,accidents or road-work. Increasingly, governments are providing digitalnotification when roadways are known to have reduced capacity.A good system lets the computer, dispatcher and driver collaborate on finding agood route, or a method to move the load. One special value is that the computer can automatically eliminate routes over roads that cannot take the weight of thetruck, or that have overhead obstructions.Usually, the drivers log into the system. The system helps remind a driver to rest.Rested drivers operate the truck more skillfully and safely When these systems were first introduced, some drivers resisted them, viewingthem as a way for management to spy on the driver.A well-managed intelligent transportation system provides drivers with hugeamounts of help. It gives them a view of their own load and the network of roadways. Components of CVO include: Fleet Administration Freight Administration Electronic Clearance Commercial Vehicle Administrative Processes InternationalBorder Crossing Clearance Weigh-In-Motion (WIM)

Roadside CVO Safety On-Board Safety Monitoring CVO Fleet Maintenance Hazardous MaterialPlanning and Incident Response Freight In-Transit Monitoring Freight Terminal Management 4.CONTAINERIZATION Containerization is a system of intermodal freight transport cargo transportusingstandard ISOcontainers (known as Shipping Containers or Isotainers ) that can be loaded and sealed intact ontocontainer ships,railroad cars, planes, andtrucks. Containerization is also the term given to the process of determining the bestcarton, box or pallet to be used to ship a single item or number of items. ISO Container dimensions and payloads

There are five common standard lengths, 20-ft(6.1m), 40-ft (12.2 m), 45-ft (13.7m), 48-ft (14.6 m), and 53-ft (16.2 m).United Statesdomestic standard containersare generally 48-ft and 53-ft (rail and truck). Container capacity is measured in twenty-foot equivalent units ( TEU , or sometimes teu ). A twenty-foot equivalent unit is a measure of containerized cargo capacity equal to one standard 20 ft(length) 8 ft (width) 8 ft 6 in (height) container. In metric units this is 6.10 m(length) 2.44 m (width) 2.59 m (height), or approximately 38.5 m. These sellat about US$2,500 inChina, the biggest manufacturer.Most containers today are of the 40-ft (12.2 m) variety and are known as 40-footcontainers. This is equivalent to 2 TEU. 45-foot (13.7 m) containers are alsodesignated 2 TEU. Two TEU are equivalent to one forty-foot equivalent unit ( FEU ). High cube containers have a height of 9 ft 6 in (2.9 m), while half-heightcontainers, used for heavy loads, have a height of 4 ft 3 in (1.3 m). Whenconverting containers to TEUs, the height of the containers typically is notconsidered.The use of US measurements to describe container size (TEU, FEU) despite thefact the rest of the world uses the metric system reflects the fact that US shippingcompanies played a major part in the development of containers. Theoverwhelming need to have a standard size for containers, in order that they fit allships, cranes, and trucks, and the length of time that the current container sizeshave been in use, makes changing to an even metric size impractical.The maximum gross mass for a 20-ft dry cargo container is 24,000 kg, and for a40-ft, (inc. the 2.87 m (9 ft 5 in) high cube container), it is 30,480 kg. Allowing for the tare mass of the container, the maximum payload mass is there reduced toapprox. 21,600 kg for 20-ft, and 26,500 kg for 40-ft containers.

Shipping Container History A container ship being loaded by a portainer crane in Copenhagen Harbour Twistlocks which capture and constrain containers. Forklifts designed tohandle containers have similar devices.A container freight train in the UK . Containers produced a huge reduction in port handling costs, contributingsignificantly to lower freight charges and, in turn, boosting trade flows. Almostevery manufactured product humans consume spends some time in a container.Containerization is an important element of the innovations inlogisticsthatrevolutionized freight handling in the 20th century.Efforts to ship cargo in containers date to the 19th century. By the 1920s,railroads on several continents were carrying containers that could be transferred to trucks or ships, but these containers were invariably small by today's standards. From 1926to 1947, theChicago North Shore and Milwaukee Railwaycarried motor carrier vehicles and shippers' vehicles loaded onflatcarsbetweenMilwaukee, Wisconsin andChicago, Illinois. Beginning in 1929,Seatrain Linescarried railroad boxcars on its sea vessels to transport goods between New York and Cuba. In the mid-1930s, theChicago Great Western Railwayand then the New Haven Railroad began "piggy-back" service (transporting highway freight trailers on flatcars)limited to their own railroads. By 1953, theCB&Q, theChicago and EasternIllinoisand theSouthern Pacificrailroads had joined the innovation. Most carswere surplus flatcars equipped with new decks. By 1955, an additional 25 railroadshad begun some form of piggy-back trailer service.The first vessels purpose-built to carry containers began operation inDenmark in1951. Ships began carrying containers betweenSeattleandAlaskain 1951. Theworlds first truly intermodal container system used purpose-built container ship the

Clifford J. Rodgers built inMontrealin 1955 and owned by theWhite Pass andYukon Route. Its first trip carried 600 containers between North Vancouver, BritishColumbiaandSkagway, Alaskaon November 26, 1955; in Skagway, the containerswere unloaded to purpose-builtrailroad carsfor transport uk north to theY on, in thefirstintermodalservice using trucks, ships and railroad cars. Southboundcontainers were loaded by shippers in the Yukon, moved by truck, rail, ship andtruck to their consignees, without opening. This first intermodal system operatedfrom November 1955 for many years.The U.S. container shipping industry dates to 1956, when trucking entrepreneur MalcomMcLean put 58 containers aboard a refitted tanker ship, the "Ideal-X," andsailed them from Newark to Houston. What was new about McLean's innovationwas the idea of using large containers that were never opened in transit betweenshipper and consignee and that were transferable on an intermodal basis, amongtrucks, ships and railroad cars. McLean had initially favored the construction of "trailerships" - taking trailers from large trucks and stowing them in a ships cargohold. This method of stowage, referred to asroll-on/roll-off , was not adopted because of the large waste in potential cargo space onboard the vessel, known as broken stowage. Instead, he modified his original concept into loading just thecontainers, not the chassis, onto the ships, hence the designation container ship or "box" ship.See also pantechniconvanandtrolley and lift van.During the first twenty years of growth containerization meant using completelydifferent, and incompatible, container sizes and corner fittings from one country toanother. There were dozens of incompatible container systems in the U.S. alone.Among the biggest operators, theMatson Navigation Companyhad a fleet of 24-foot containers whileSea-Land Service, Incused 35-foot containers. The standardsizes and fitting and reinforcement norms that exist now evolved out of a series of compromises between international shipping companies,Europeanrailroads, U.S.railroads, and U.S. trucking companies. The bulk of the discussions occurred in thelate 1960s and the first draft of the resulting ISO standards were prepared for publication in 1970.A social cost arises as a result of the high cost of trasporting the empty containers back to the original shipping point by agents. This cost, often greater than that of containers themselves, results in large areas in ports and warehouses to beoccupied by empty containers left when at the destination. In 2004 in the US thishas ironically generated a contest addressed to those that present the best projectfor alternative use of these abandoned containers.In the United States, at first, containerization grew despite the unfavorableregulatory structure of the 1960s. But the United States' present fully integratedsystems became possible only after theInterstate Commerce Commission'sregulatory oversight was cut back (and later abolished in 1995), trucking and railwere deregulated in the 1970s and maritime rates were deregulated in 1984.Containerization has revolutionized cargo shipping. Today,

approximately 90% of non- bulk cargoworldwide moves by containers stacked on transport ships; 26% of all containers originate fromChina.As of 2005, some 18 million total containersmake over 200 million trips per year. There are ships that can carry over 14,500TEU ("Emma Mrsk ", 396 m long, launched August 2006). It has even been predicted that, at some point, container ships will be constrained in size only by theStraits of Malacca one of the world's busiest shipping laneslinking theIndianOceanto thePacific Ocean. This so-calledMalaccamaxsize constrains a ship todimensions of 470 m in length and 60 m wide (1542feet* 197feet).However, few initially foresaw the extent of the influence containerization would bring to the shipping industry. In the 1950s,Harvard UniversityeconomistBenjamin Chinitz predicted that containerization would benefit NewYork byallowing it to ship industrial goods produced there more cheaply to theSouthernUnited Statesthan other areas, but did not anticipate that containerization mightmake it cheaper to import such goods from abroad. Most economic studies of containerization merely assumed that shipping companies would begin to replaceolder forms of transportation with containerization, but did not predict that the process of containerization itself would have some influence on producers and theextent of trading. A converted container used as an office at a building site . The widespread use of ISO standard containers has driven modifications in other freight-moving standards, gradually forcing removable truck bodies or swap bodies into the standard sizes and shapes (though without the strength needed to bestacked), and changing completely the worldwide use of freight palletsthat fit intoISO containers or into commercial vehicles.Improved cargo security is also an important benefit of containerization. The cargois not visible to the casual viewer and thus is less likely to be stolen and the doorsof the containers are generally sealed so that tampering is more evident. This hasreduced the "falling off the truck" syndrome that long plagued the shippingindustry.Use of the same basic sizes of containers across the globe has lessened the problems caused by incompatiblerail gaugesizes in different countries. Themajority of the rail networks in the world operate on a 1,435mm(4ft8in) gaugetrack known asstandard gaugebut many countries likeRussia,FinlandandSpain use broader gauges while other many countries inAfricaandSouth Americausenarrower gauges on their networks. The use of container trains in all thesecountries makes trans-shipment between different gauge trains easier, withautomatic or semi-automatic equipment.Some of the largest global companies containerizing containers today are Patrick Global Shipping, Bowen Exports and Theiler & Sons Goods, LLC. Loss at sea of ISO Containers

Containers occasionally fall from the ships that carry them, something that occursan estimated 2,000 to 10,000 times each year. For instance, on November 30, 2006, acontainer washed ashoreon the Outer Banks of North Carolina, along withthousands of bags of its cargo of tortilla chips. Containers lost at sea do notnecessarily sink, but seldom float very high out of the water, making them ashipping hazard that is difficult to detect. Freight from lost containers has providedoceanographerswithunexpected opportunitiesto track globalocean currents. Double-stack containerization Part of aUnited Statesdouble-stack container train loaded with53 ft (16.2 m) containers. A railroad car with a 20' tank container and a conventional 20' container. Mostflatcarscannot carry more than one standard 40 foot container, but if the rail line has been built with sufficient vertical clearance, awell car can accept a container and still leave enoughclearance for another container on top. This usually precludes operation of double-stackedwagons on lines with overhead electric wiring (exception:Betuweroute). Double stacking has been used in North America since American President Lines introduced this "double stack" principle under the name of "Stacktrain" rail service in 1984. It saved shippers money and nowaccounts for almost 70 percent of intermodal freight transportshipments in the United States, in part due to the generous vertical clearances used by US railroads. Other container systems Haus-zu-Haus(Germany)RACE (container)(Australia) Determining the best carton, box or palletWhile the creation of the best container for shipping of newly created product iscalled "Containerization", the term also applies to determining the right box andthe best placement inside that box inorder fulfillment. This may be planned bysoftware modules in awarehouse management system. Thisoptimizationsoftwarecalculates the best spatial position of each item withing such constraints asstackability and crush resistance. 5.CROSS DOCKING Cross-docking is a practice inlogisticsof unloading materials from an incomingsemi-trailer truck or rail car and loading these materials in outbound trailers or railcars, with little or no storage in between. This may be done to change type of conveyance, or to sort material intended for different destinations, or to combinematerial from different origins.In purest form this is done directly, with minimal or nowarehousing. In practicemany "cross-docking" operations require

large staging areas where inboundmaterials are sorted, consolidated, and stored until the outbound shipment iscomplete and ready to ship. If the staging takes hours or a day the operation isusually referred to as a "cross-dock" distribution center. If it takes several days or even weeks the operation is usually considered a warehouse.Crossdocking is used to decrease inventory storage by streamlining the flow between the supplier and the manufacturer. Typical applications "Hub and spoke" arrangements, where materials are brought in to one centrallocation and then sorted for delivery to a variety of destinations Consolidation arrangements, where a variety of smaller shipments are combinedinto one larger shipment for economy of transportDeconsolidation arrangements, where large shipments (e.g. railcar lots) are brokendown into smaller lots for ease of delivery. Factors influencing the use of cross-docks Customer and supplier geography -- particularly when a single corporate customer has many multiple branches or using pointsFreight costs for the commodities being transportedCost of inventory in transitComplexity of loadsHandling methodsLogistics software integration between supplier(s), vendor, and shipper Tracking of inventory in transit 6. DISTRIBUTION Distribution is one of the four aspects of marketing. A distributor is themiddlemanbetween the manufacturer and retailer. After a product is manufacturedit is typically shipped (and usually sold) to a distributor. The distributor then sellsthe product toretailersor customers.The other three parts of themarketing mixare product management, pricing, and promotion.Traditionally, distribution has been seen as dealing withlogistics: how to get the productor serviceto the customer. It must answer questions such as:Should the product be sold through aretailer ?Should the product be distributed throughwholesale?Shouldmulti-level marketingchannels be used?How long should the channel be (how many members)?Where should the product or service be available?When should the product or service be available?Should distribution be exclusive, selective or extensive?Who should control the channel (referred to as the channel captain)?Should channel relationships be informal or contractual?

Should channel members shareadvertising(referred to as co-op ads)?Should electronic methods of distribution be used?Are there physical distributionand logistical issues to

deal with?What will it cost to keep an inventory of products on store shelves and in channelwarehouses (referred to as filling the pipeline )? The distribution channel Frequently there may be a chain of intermediaries, each passing the product downthe chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of theelements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user. Channels A number of alternate 'channels' of distribution may be available:Selling direct, such as via mail order, Internet and telephone salesAgent, who typically sells direct on behalf of the producer Distributor (also called wholesaler), who sells to retailersRetailer (also called dealer), who sells to end customersAdvertisement typically used for consumption goodsDistribution channels may not be restricted to physical products alone. They may be just as important for moving a service from producer to consumer in certainsectors, since both direct and indirect channels may be used. Hotels, for example,may sell their services (typically rooms) directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation systems, etc.There have also been some innovations in the distribution of services. For example, there has been an increase in franchising and in rental services - the latter offering anything from televisions through tools. There has also been someevidence of service integration, with services linking together, particularly in thetravel and tourism sectors. For example, links now exist between airlines, hotelsand car rental services. In addition, there has been a significant increase in retailoutlets for the service sector. Outlets such as estate agencies and building societyoffices are crowding out traditional grocers from major shopping areas.. Channel members Distribution channels can thus have a number of levels. Kotler defined the simplestlevel, that of direct contact with no intermediaries involved, as the 'zero-level'channel.The next level, the 'one-level' channel, features just one intermediary; in consumer goods a retailer, for industrial goods a distributor, say. In small markets (such assmall countries) it is practical to reach the whole market using just one- and zero-level channels.In large markets (such as larger countries) a second level, a wholesaler for example, is now

mainly used to extend distribution to the large number of small,neighbourhood retailers.In Japan the chain of distribution is often complex and further levels are used, evenfor the simplest of Channel

structure To the various `levels' of distribution, which they refer to as the `channel length',Lancaster and Massingham also added another structural element, the relationship between its members:'Conventional or free-flow - This is the usual, widely recognized, channel with arange of `middle-men' passing the goods on to the enduser.Single transaction - A temporary `channel' may be set up for one transaction; for example, the sale of property or a specific civil engineering project. This does notshare many characteristics with other channel transactions, each one being unique.Vertical marketing system (VMS) - In this form, the elements of distribution areintegrated. The internal market Many of the marketing principles and techniques which are applied to the externalcustomers of an organization can be just as effectively applied to each subsidiary's,or each department's, 'internal' customers.In some parts of certain organizations this may in fact be formalized, as goods aretransferred between separate parts of the organization at a `transfer price'. To allintents and purposes, with the possible exception of the pricing mechanism itself,this process can and should be viewed as a normal buyer-seller relationship. Less obvious, but just as practical, is the use of `marketing' by service andadministrative departments; to optimize their contribution to their `customers' (therest of the organization in general, and those parts of it which deal directly withthem in particular). In all of this, the lessons of the non-profit organizations, indealing with their clients, offer a very useful parallel. Channel Decisions Channel strategy Product (or service)<>Cost<>Consumer location Channel management The channel decision is very important. In theory at least, there is a form of trade-off: the cost of using intermediaries to achieve wider distribution is supposedlylower.

Indeed, most consumer goods manufacturers could never justify the cost of selling direct to their consumers, except by mail order. In practice, if the producer is large enough, the use of intermediaries (particularly at the agent and wholesaler level) can sometimes cost more than going direct.Many of the theoretical arguments about channels therefore revolve around cost.On the other hand, most of the practical decisions are concerned with control of theconsumer. The small company has no alternative but to use intermediaries, oftenseveral layers of them, but large companies 'do' have the choice.However, many suppliers seem to assume that once their product has been soldinto the channel, into the beginning of the distribution chain, their job is finished.Yet that distribution chain is merely assuming a part of the supplier's responsibility;and, if he has any aspirations to be market-oriented, his job should really beextended to managing, albeit very indirectly, all the processes involved in thatchain, until the product or service arrives with the end-user. This may involve anumber of decisions on the part of the supplier:Channel membershipChannel motivationMonitoring and managing channels Channel membership Intensive distribution - Where the majority of resellers stock the `product' (withconvenience products, for example, and particularly the brand leaders in consumer goods markets) price competition may be evident.Selective distribution This is the normal pattern (in both consumer and industrialmarkets) where `suitable' resellers stock the product.Exclusive distribution - Only specially selected resellers (typically only one per geographical area) are allowed to sell the `product'.

Channel motivation It is difficult enough to motivate direct employees to provide the necessary salesand service support. Motivating the owners and employees of the independentorganizations in a distribution chain requires even greater effort. There are manydevices for achieving such motivation. Perhaps the most usual is `bribery': thesupplier offers a better margin, to tempt the owners in the channel to push the product rather than its competitors; or a competition is offered to the distributors'sales personnel, so that they are tempted to push the product. At the other end of the spectrum is the almost symbiotic relationship that the all too rare supplier in thecomputer field develops with its agents; where the agent's personnel, support aswell as sales, are trained to almost the same standard as the supplier's own staff. Monitoring and managing channels

In much the same way that the organization's own sales and distribution activitiesneed to be monitored and managed, so will those of the distribution chain.In practice, of course, many organizations use a mix of different channels; in particular, they may complement a direct salesforce, calling on the larger accounts,with agents, covering the smaller customers and prospects. Vertical marketing This relatively recent development integrates the channel with the original supplier producer, wholesalers and retailers working in one unified system. This may arise because one member of the chain owns the other elements (often called `corporatesystems integration'); a supplier owning its own retail outlets, this being 'forward'integration. It is perhaps more likely that a retailer will own its own suppliers, this being 'backward' integration. (For example, MFI, the furniture retailer, ownsHygena which makes its kitchen and bedroom units.) The integration can also be by franchise (such as that offered by McDonald's hamburgers and Benettonclothes) or simple cooperation (in the way that Marks & Spencer co-operates withits suppliers).Alternative approaches are `contractual systems', often led by a wholesale or retailco-operative, and `administered marketing systems' where one (dominant) member of the distribution chain uses its position to co-ordinate the other members'activities. This has traditionally been the form led by manufacturers.The intention of vertical marketing is to give all those involved (and particularlythe supplier at one end, and the retailer at the other) 'control' over the distributionchain. This removes one set of variables from the marketing equations.Other research indicates that vertical integration is a strategy which is best pursuedat the mature stage of the market (or product). At earlier stages it can actuallyreduce profits. It is arguable that it also diverts attention from the real business of the organization. Suppliers rarely excel in retail operations and, in theory, retailersshould focus on their sales outlets rather than on manufacturing facilities ( Marks& Spencer , for example, very deliberately provides considerable amounts of technical assistance to its suppliers, but does not own them). Horizontal marketing A rather less frequent example of new approaches to channels is where two or more non-competing organizations agree on a joint venture - a joint marketingoperation -

because it is beyond the capacity of each individual organization alone.In general, this is less likely to revolve around marketing synergy. LOGISTICS IN FOOD DISTRIBUTION Food distribution , a method of distributing (or transporting) food from one placeto another, is a very important factor in publicnutrition. Where it breaks down,famine,malnutritionor illnesscan occur. During some periods of Ancient Rome,food distribution occurred with the policy of giving free bread to its citizens under the provision of acommon good.There are three main components of food distribution:

Transportinfrastructure, such asroads,vehicles,rail transport,airports, and ports.Food and handling technology and regulation, such asrefrigeration, storage,warehousing.Adequate source and supplylogistics, based ondemandandneed. Information logistics In general, it is exactlylogisticsof information.The field of information logistics aims at developing concepts, technologies andapplications for need-oriented information supply. Information-on-demand servicesare a typical application area for information logistics, as they have to fulfil user needs with respect to content, location, time and qualityInformation Logistics consists of two words - information and logistics.Information can mean a lot of things, but usually is text (syntax with a semanticmeaning) and logistics which is the transportation of sth from point A to point B. Ina simplified sense is a newsletter information logistics, also an e-mail or even theordinary mail you receive.Information logistics is concerned with the supply of information to individualsand aims to optimize it by targeted delivery in accordance with requirements insuch a way that the substantively correct and actually necessary information isavailable where and when it is needed. This information should be transformed inline with users' needs, depending on the communication media and users' preferences, in order to aid custom processing of it.Information is created throughout the entire product creation process. The goal of information logistics is to optimize the content and format of the information,reduce throughput times and achieve a high degree of parallel processing. Our approach is such that information can be created and reused in a structured manner all along the value creation chain. This requires the use of an information model,an overall product tree and a graphic design concept. The deployed system mustmeet these requirements optimally.

The result is automated configuration of fully scalable information for a widevariety of target group perspectives (e.g. by sector or area of application). Thecustomer can simply navigate through the information. The information anddocumentation creation process is made easier, safer and more efficient. 7.JUST IN TIME CONCEPT Just In Time ( JIT ) is an inventory strategy implemented to improve thereturn oninvestmentof a businessby reducing in-processinventoryand its associated costs.The process is driven by a series of signals, or Kanban, that tell production processes to make the next part. Kanban are usually simple visual signals, such asthe presence or absence of a part on a shelf. When implemented correctly, JIT canlead to dramatic improvements in a manufacturing organization'sreturn oninvestment, quality, and efficiency. New stock is ordered whenstock reaches the re-order level. This saveswarehouse space and costs. However, one drawback of the JIT system is that the re-order levelis determined by historicaldemand. If demand rises above the historicalaverage planning duration demand, the firm could deplete inventory and causecustomer serviceissues. To meet a 95%service ratea firm must carry about 2standarddeviationsof demand in safety stock. Forecasted shifts in demand should be planned for around the Kanban until trends can be established to reset theappropriate Kanban level. In recent yearsmanufacturershave touted a trailing 13week average as a better predictor than most forecastors could provide. A related term isKaizenwhich is an approach to productivityimprovement literally meaning "continuous impr History of JIT The technique was first used by theFord Motor CompanyThis describes theconcept of "dock to factory floor" in which incoming materials are not even storedor warehoused before going into production. The concept needed an effectivefreight management system (FMS); Ford's TodayandTomorrow (1926) describesone.The technique was subsequently adopted and publicised byToyota Motor Corporationof Japanas part of itsToyota Production System(TPS).

Japanese corporations cannot afford large amounts of land to warehouse finished products and parts. Before the1950s, this was thought to be a disadvantage because it reduced the economic lot size. (An economic lot size is the number of identical products that should be produced, given the cost of changing the production process over to another product.) The undesirable result was poor returnon investment for afactory.The chief engineer at Toyota in the1950s,Tc iO n , examined ah h o i accountingassumptions and realized that another method was possible. The factory could bemade more flexible, reducing the overhead costs of retooling and reducing theeconomic lot size to the available warehouse space.Over a period of several years, Toyota engineers redesigned car models for commonality of tooling for such production processes as paint-spraying andwelding. Toyota was one of the first to apply flexible robotic systems for thesetasks. Some of the changes were as simple as standardizing the hole sizes used tohang parts on hooks. The number and types of fasteners were reduced in order tostandardize assembly steps and tools. In some cases, identical subassemblies could be used in several models.Toyota engineers then determined that the remaining critical bottleneck in theretooling process was the time required to change the stamping dies used for body parts. These were adjusted by hand, using crowbars and wrenches. It sometimestook as long as several days to install a large (multiton) die set and adjust it for acceptable quality. Further, these were usually installed one at a time by a team of experts, so that the line was down for several weeks.Toyota implemented a strategy calledSingle Minute Exchange of Die(SMED),developed byShigeo Shingo. With very simple fixtures, measurements weresubstituted for adjustments. Almost immediately, die change times fell to abouthalf an hour. At the same time, quality of the stampings became controlled by awritten recipe, reducing the skill required for the change. Analysis showed that theremaining time was used to search for hand tools and move dies. Proceduralchanges (such as moving the new die in place with the line in operation) anddedicated tool-racks reduced the die-change times to as little as 40 seconds. Dieswere changed in a ripple through the factory as a new product began flowing.After SMED, economic lot sizes fell to as little as one vehicle in some Toyota plants. Carrying the process into parts-storage made it possible to store as little as one partin each assembly station. When a part disappeared, that was used as a signal to produce or order a replacement. Philosophy Just-in-time (JIT) inventory systems are not just a simple method that a companyhas to buy in to; it has a whole philosophy that the company must follow. The ideasin this philosophy come from many different disciplines including; statistics,industrial engineering, production management and behavioral science. In the JITinventory philosophy there are views with respect to how inventory is looked upon,what it

says about the management within the company, and the main principle behind JIT.Inventory is seen as incurring costs instead of adding value, contrary to traditionalthinking. Under the philosophy, businesses are encouraged to eliminate inventorythat doesnt add value to the product. Secondly, it sees inventory as a sign of sub par management as it is simply there to hide problems within the productionsystem. These problems include backups at work centres, lack of flexibility for employees and equipment, and inadequate capacity among other things.In short, the just-in-time inventory system is all about having the right material, atthe right time, at the right place, and in the exact amount. Effects Some of the results at Toyota were unexpected. A huge amount of cash appeared,apparently from nowhere, as in-process inventory was built out and sold. This byitself generated tremendous enthusiasm in upper management.Another surprising effect was that the response time of the factory fell to about aday. This improved customer satisfaction by providing vehicles usually within aday or two of the minimum economic shipping delay.Also, many vehicles began to be built to order, completely eliminating the risk theywould not be sold. This dramatically improved the company's return on equity byeliminating a major source of risk.Since assemblers no longer had a choice of which part to use, every part had to fit perfectly. The result was a severe quality assurance crisis, and a dramaticimprovement in product quality. Eventually, Toyota redesigned every part of itsvehicles to eliminate or widen tolerances, while simultaneously implementing carefulstatistical controls. (SeeTotal Quality Management). Toyota had to test andtrain suppliers of parts in order to assure quality and delivery. In some cases, thecompany eliminated multiple suppliers.When a process problem or bad parts surfaced on the production line, the entire production line had to be slowed or even stopped. No inventory meant that a linecould not operate from in-process inventory while a production problem was fixed.Many people in Toyota confidently predicted that the initiative would beabandoned for this reason. In the first week,line stopsoccurred almost hourly. But by the end of the first month, the rate had fallen to a few line stops per day. After six months, line stops had so little economic effect that Toyota installed anoverhead pull-line, similar to a bus bell-pull, that permitted any worker on the production line to order a line stop for a process or quality problem. Even with this,line stops fell to a few per week.The result was a factory that became the envy of the industrialized world, and hassince been widely emulated.The Just in Time

philosophy was also applied to other segments of thesupplychainin several types of industries. In the commercial sector, it meant eliminatingone or all of thewarehousesin the link between a factory and a retailestablishment. Benefits As most companies use an inventory system best suited for their company, theJust-InTime Inventory System (JIT) can have many benefits resulting from it. Themain benefits of JIT are listed below.Set up times are significantly reduced in the warehouse. Cutting down the set uptime to be more productive will allow the company to improve their bottom line tolook more efficient and focus time spent on other areas that may needimprovement.The flows of goods from warehouse to shelves are improved. Having employeesfocused on specific areas of the system will allow them to process goods faster instead of having them vulnerable to fatigue from doing too many jobs at once andsimplifies the tasks at hand. Employees who possess multiple skills are utilized more efficiently. Havingemployees trained to work on different parts of the inventory cycle system willallow companies to use workers in situations where they are needed when there isa shortage of workers and a high demand for a particular product.Better consistency of scheduling and consistency of employee work hours. If thereis no demand for a product at the time, workers dont have to be working. This cansave the company money by not having to pay workers for a job not completed or could have them focus on other jobs around the warehouse that would notnecessarily be done on a normal day.Increased emphasis on supplier relationships. No company wants a break in their inventory system that would create a shortage of supplies while not havinginventory sit on shelves. Having a trusting supplier relationship means that you canrely on goods being there when you need them in order to satisfy the company andkeep the company name in good standing with the public.Supplies continue around the clock keeping workers productive and businessesfocused on turnover. Having management focused on meeting deadlines will makeemployees work hard to meet the company goals to see benefits in terms of jobsatisfaction, promotion or even higher pay. Problems Within a JIT System The major problem with Just In Time operation is that it leaves the supplier anddownstream consumers open tosupply shocks. In part, this was seen as a featurerather than a bug by Ohno, who used the analogy of lowering the level of water ina river in order to expose the rocks to explain how removing inventory showedwhere flow of production was interrupted. Once the barriers were exposed, theycould be removed; since one of the main barriers was rework, lowering inventoryforced each

shop to improve its own quality or cause a holdup in the nextdownstream area. Just In Time is a means to improving performance of the system,not an end.With shipments coming in sometimes several times per day, Toyota is especiallysusceptible to an interruption in the flow. For that reason, Toyota is careful to usetwo suppliers for most assemblies. As noted in Liker (2003), there was anexception to this rule that put the entire company at risk by the1997 Aisin fire. However, since Toyota also makes a point of maintaining high quality relationswith its entire supplier network, several suppliers immediately took up productionof the Aisinbuilt parts by using existing capability and documentation. Thus, astrong, long-term relationship with a few suppliers is preferred to short-term, price- based relationships with competing suppliers. Within a raw material stream As noted by Liker (2003) and Womack and Jones (2003), it would ultimately bedesirable to introduce flow and JIT all the way back through the supply stream.However, none of them followed this logically all the way back through the processes to the raw materials. With present technology, for example, an ear of corn cannot be grown and delivered to order . The same is true of most rawmaterials, which must be discovered and/or grown through natural processes thatrequire time and must account for natural variability in weather and discovery.