Logistics

There are two basically different forms of logistics. One optimizes a steady flow of material through a network of transportation links and storage nodes. The other coordinates a sequence of resources to carry out some project.

Steady-state flow systems are usually optimized for one of several goals: avoid shortages of the object (in military systems, especially for fuel and ammunition), minimize transportation cost, minimum time to obtain an object, or minimum total storage (time and amount) of objects (to minimize the interest losses of in-storage inventory).

A recent trend in large distribution chains is to assign these goals to individual stock items, rather than optimizing the entire system for one goal. This is possible because the plans usually describe stock amounts to be stored at particular locations, and these vary depending on the strategy.

The basic method of optimizing a steady-state distribution system is to use a minimum spanning tree to characterize the transport network, and then place storage locations at the nodes, sized to handle the minimum, average, or maximum demand of items.

Quite often, the demand is limited by the transportation capacity out of the node's storage location. When the transportation out of a storage node exceeds its storage or incoming capacity, the storage is useful only to even out the amount of transportation per unit of time, to reduce peak loads on the transportation system.

Project logistics experts discover the sequence in which a project will use particular resources. They then arrange to send the resources so that they will arrive when needed. Generally, these plans use critical path analysis.

Many haulage organisations in Europe include the word "logistics" in their company name. The largest privately owned British haulage company is Eddie Stobart Ltd.

See also: supply chain management, intelligent transportation system, commercial vehicle operations, transport, distribution, marketing, logistics automation

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