2.

Logistics complement
2.1 Handling and Order Processing
Unit loads for transportation of luggage at the airport, in this case the unit load has
protective function.
Unit loads are combinations of individual items which are moved by handling
systems, usually employing a pallet of normed dimensions.
Handling systems include: trans-pallet handlers, counterweight handler, retractable
mast handler, bilateral handlers, trilateral handlers, AGV and stacker handlers.
Storage systems include: pile stocking, cell racks (either static or movable),
cantilever racks and gravity racks.
Order processing is a sequential process involving: processing withdrawal list,
picking (selective removal of items from loading units), sorting (assembling items
based on destination), package formation (weighting, labeling and packing), order
consolidation (gathering packages into loading units for transportation, control and
bill of lading).
Picking can be both manual or automated. Manual picking can be both man to goods,
i.e. operator using a cart or conveyor belt, or goods to man, i.e. the operator
benefiting from the presence of a mini-load ASRS, vertical or horizontal carousel or
from an Automatic Vertical Storage System (AVSS). Automatic picking is done
either with dispensers or depalleting robots.
Sorting can be done manually through carts or conveyor belts, or automatically
through sorters.
2.2 Transportation
Cargo, i.e. merchandise being transported, can be moved through a variety of
transportation means and is organized in different shipment categories. Unit loads
are usually assembled into higher standardized units such as: ISO containers, swap
bodies or semi-trailers. Especially for very long distances, product transportation
will likely benefit from using different transportation means: multimodal transport,
intermodal transport (no handling) and combined transport (minimal road transport).
Operators involved in transportation include: all train, road vehicles, boats, airplanes
companies, couriers, freight forwarders and multi-modal transport operators.

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Merchandise being transported internationally is usually subject to the Incoterms
standards issued by the International Chamber of Commerce.
2.3 Configuration and management
Similarly to production systems, logistic systems need to properly configured and
managed. Actually a number of methodologies have been directly borrowed from
operations management such as using Economic Order Quantity models for
managing inventory in the nodes of the network. Distribution resource planning
(DRP) is similar to MRP, except that it doesn't concern activities inside the nodes of
the network but planning distribution when moving goods through the links of the
network.
Traditionally in logistics configuration may be at the level of the warehouse (node)
or at level of the distribution system (network).
Regarding a single warehouse, besides the issue of designing and building the
warehouse, configuration means solving a number of interrelated technical-
economic problems: dimensioning rack cells, choosing a palletizing method (manual
or through robots), rack dimensioning and design, number of racks, number and
typology of retrieval systems (e.g. stacker cranes). Some important constraints have
to satisfied: fork and load beams resistance to bending and proper placement of
sprinklers. Although picking is more of a tactical planning decision than a
configuration problem, it is important to take it into account when deciding the racks
layout inside the warehouse and buying tools such as handlers and motorized carts
since once those decisions are taken they will work as constraints when managing
the warehouse, same reasoning for sorting when designing the conveyor system
and/or installing automatic dispensers.
Configuration at the level of the distribution system concerns primarily the problem
of location of the nodes in a geographic space and distribution of capacity among
the nodes. The first may be referred to as facility location (with the special case of
site selection) while the latter to as capacity allocation. The problem of outsourcing
typically arises at this level: the nodes of a supply chain are very rarely owned by a
single enterprise. Distribution networks can be characterized by numbers of levels,
namely the number of intermediary nodes between supplier and consumer:
-Direct store delivery, i.e. zero levels
-One level network: central warehouse

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-Two level network: central and peripheral warehouses
This distinction is more useful for modeling purposes, but it relates also to a tactical
decision regarding safety stocks: considering a two level network, if safety inventory
is kept only in peripheral warehouses then it is called a dependent system (from
suppliers), if safety inventory is distributed among central and peripheral
warehouses it is called an independent system (from suppliers). Transportation from
producer to the second level is called primary transportation, from the second level
to consumer is called secondary transportation.
Although configuring a distribution network from zero is possible, logisticians more
usually have to deal with restructuring existing networks due to presence of an array
of factors: changing demand, product or process innovation, opportunities for
outsourcing, change of government policy toward trade barriers, innovation in
transportation means (both vehicles or thoroughfares), introduction of regulations
(notably those regarding pollution) and availability of ICT supporting systems (e.g.
ERP or e-commerce).
Once a logistic system is configured, management, meaning tactical decisions, takes
place, once again, at the level of the warehouse and of the distribution network.
Decisions have to be made under a set of constraints: internal, such as using the
available infrastructure, or external, such as complying with given product shelf lifes
and expiration dates.
At level of the warehouse, the logistician must decide how to distribute merchandise
over the racks. Three basic situations are traditionally considered: shared storage,
dedicated storage (rack space reserved for specific merchandise) and class based
storage (class meaning merchandise organized in different areas according to their
access index).
Picking efficiency varies greatly depending on the situation. For man to goods
situation, a distinction is carried out between high level picking (vertical component
significant) and low level picking (vertical component insignificant). A number of
tactical decisions regarding picking must be made:
Routing path: standard alternatives include transversal routing, return routing,
midpoint routing and largest gap return routing
Replenishment method: standard alternatives include equal space supply for each
product class and equal time supply for each product class.

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At the level of the distribution network, tactical decisions involve mainly inventory
control and delivery path optimization. Note that the logistician may be required to
manage the reverse flow along with the forward flow.
2.4 Production logistics
The term production logistics describes logistic processes within an industry.
Production logistics aims to ensure that each machine and workstation receives the
right product in the right quantity and quality at the right time. The concern is not
the transportation itself, but to streamline and control the flow through value-adding
processes and to eliminate non–value-adding processes. Production logistics can
operate in existing as well as new plants. Manufacturing in an existing plant is a
constantly changing process. Machines are exchanged and new ones added, which
gives the opportunity to improve the production logistics system accordingly.[16]
Production logistics provides the means to achieve customer response and capital
efficiency.
Production logistics becomes more important with decreasing batch sizes. In many
industries (e.g., mobile phones), the short-term goal is a batch size of one, allowing
even a single customer's demand to be fulfilled efficiently. Track and tracing, which
is an essential part of production logistics due to product safety and reliability issues,
is also gaining importance, especially in the automotive and medical industries.
2.5 Logistics management
Logistics management is that part of the supply chain 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 customer requirements. A professional working in the
field of logistics management is called a logistician.

Materials management
Channel management
Distribution (or physical distribution)
Supply-chain management

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The Chartered Institute of Logistics and Transport (CILT), established in the United
Kingdom in 1919, received a Royal Charter in 1926. The Chartered Institute is one
of the professional bodies or institutions for the logistics and transport sectors that
offers professional qualifications or degrees in logistics management. CILT
programs can be studied at centers around UK, some of which also offer distance
learning options. The institute also have overseas branches namely The Chartered
Institute of Logistics & Transport Australia (CILTA) in Australia and Chartered
Institute of Logistics and Transport in Hong Kong (CILTHK) in Hong Kong.
2.6 Warehouse management systems and warehouse control systems
Although there is some overlap in functionality, warehouse management systems
(WMS) can differ significantly from warehouse control systems (WCS). Simply put,
a WMS plans a weekly activity forecast based on such factors as statistics and trends,
whereas a WCS acts like a floor supervisor, working in real time to get the job done
by the most effective means. For instance, a WMS can tell the system that it is going
to need five of stock-keeping unit (SKU) A and five of SKU B hours in advance, but
by the time it acts, other considerations may have come into play or there could be
a logjam on a conveyor. A WCS can prevent that problem by working in real time
and adapting to the situation by making a last-minute decision based on current
activity and operational status. Working synergistically, WMS and WCS can resolve
these issues and maximize efficiency for companies that rely on the effective
operation of their warehouse or distribution center.
2.7 Logistics automation
ASRS used by the U.S. military, also used by business in conjunction with manual
picking.
Logistics automation is the application of computer software and/or automated
machinery to improve the efficiency of logistics operations. Typically this refers to
operations within a warehouse or distribution center, with broader tasks undertaken
by supply chain management systems and enterprise resource planning systems.
Industrial machinery can typically identify products through either Bar Code or
RFID technologies. Information in traditional bar codes is stored as a sequence of
black and white bars varying in width, which when read by laser is translated in a
binary sequence, which according to fixed rules can be converted in a decimal
number. Sometimes information in a bar code can be transmitted through radio
frequency, more typically radio transmission is used in RFID tags. An RFID tag is

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card containing a memory chip and an antenna which transmits signals to a reader.
RFID may be found on merchandise, animals, vehicles and people as well.
2.8 Logistics outsourcing
Logistics outsourcing involves a relationship between a company and an LSP
(logistic service provider), which, compared with basic logistics services, has more
customized offerings, encompasses a broad number of service activities, is
characterized by a long-term orientation, and thus has a strategic nature.
Outsourcing does not have to be complete externalization to a LSP, but can also be
partial:
A single contract for supplying a specific service on occasion
Creation of a spin-off
Creation of a joint venture
Third-party logistics
Third-party logistics (3PL) involves using external organizations to execute logistics
activities that have traditionally been performed within an organization
itself.According to this definition, third-party logistics includes any form of
outsourcing of logistics activities previously performed in house. For example, if a
company with its own warehousing facilities decides to employ external
transportation, this would be an example of third-party logistics. Logistics is an
emerging business area in many countries.
Fourth-party logistics
The concept of a fourth-party logistics (4PL) provider was first defined by Andersen
Consulting (now Accenture) as an integrator that assembles the resources,planning
capabilities, and technology of its own organization and other organizations to
design, build, and run comprehensive supply chain solutions. Whereas a third-party
logistics (3PL) service provider targets a single function, a 4PL targets management
of the entire process. Some have described a 4PL as a general contractor that
manages other 3PLs, truckers, forwarders, custom house agents, and others,
essentially taking responsibility of a complete process for the customer.

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2.9 Emergency logistics
Emergency logistics is a term used by the logistics, supply chain, and manufacturing
industries to denote specific time-critical modes of transport used to move goods or
objects rapidly in the event of an emergency. The reason for enlisting emergency
logistics services could be a production delay or anticipated production delay, or an
urgent need for specialized equipment to prevent events such as aircraft being
grounded (also known as "aircraft on ground"—AOG), ships being delayed, or
telecommunications failure. Emergency logistics services are typically sourced from
a specialist provider.
As a profession
A logistician is a professional logistics practitioner. Professional logisticians are
often certified by professional associations. One can either work in a pure logistics
company, such as a shipping line, airport, or freight forwarder, or within the logistics
department of a company. However, as mentioned above, logistics is a broad field,
encompassing procurement, production, distribution, and disposal activities. Hence,
career perspectives are broad as well. A new trend in the industry are the 4PL, or
fourth-party logistics, firms, consulting companies offering logistics services.
Some universities and academic institutions train students as logisticians, offering
undergraduate and postgraduate programs. A university with a primary focus on
logistics is Kühne Logistics University in Hamburg, Germany. It is non profit and
supported by Kühne-Foundaton of the logistics entrepreneur Klaus Michael Kühne.
The International Association of Public Health Logisticians (IAPHL) is a
professional network that promotes the professional development of supply chain
managers and others working in the field of public health logistics and commodity
security, with particular focus on developing countries. The association supports
logisticians worldwide by providing a community of practice, where members can
network, exchange ideas, and improve their professional skills.
Logistics museums
There are many museums in the world which cover various aspects of practical
logistics. These include museums of transportation, customs, packing, and industry-
based logistics. However, only the following museums are fully dedicated to
logistics:

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General logistics:
Museum of Logistics (Tokyo, Japan)
Logistics Museum (Saint Petersburg, Russia)
Military logistics:
Royal Logistic Corps Museum (Surrey, England, United Kingdom)
The Canadian Forces Logistics Museum (Montreal, Canada)