Logistics - A Total System’s Approach - Benjamin S Blanchard

7/18/2019 Logistics - A Total System’s Approach - Benjamin S Blanchard

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Logistics: A Total System’s Approach

Benjamin S. Blanchard

Professor-Emeritus, Virginia Tech

A Historical Perspective

The subject of logistics can be approached from several different perspectives. The most

common approach, practiced in the commercial sector, deals with the "business-oriented"functions of procurement (purchasing), material flow, transportation, warehousing,

distribution, and related activities associated with supply chain management. These activities

have primarily been directed toward the acquisition and delivery of relatively small

consumable items and the functions of product design, maintenance and support, and disposalhave not been included in most instances. Further, these various activities have not been well

integrated, and a total system's life-cycle approach has not been assumed.

Conversely, in the defense sector, the spectrum of logistics has been directed toward theacquisition, distribution, sustaining support, and retirement (phase-out) of systems. In addition

to procurement, material flow, transportation, and distribution functions, activities dealing

with product design, maintenance and support, and material recycling/disposal have been predominant. A system must first be designed such that it can be easily acquired and

transported/distributed to the user's (consumer's) operating site(s); it must be configured so

that it can be effectively and efficiently maintained and supported throughout its planned life

cycle; and, when retired, its material elements must be recycled and/or disposed of withoutcausing any degradation to the environment. The emphasis here has been applied primarily to

large, complex, and highly sophisticated defense systems, with a life-cycle orientation.

To date, these somewhat different approaches to logistics have not been all-inclusive (in

terms of including all of the applicable life-cycle activities necessary), have not been

addressed from a total system's perspective, the different elements have not been very well

integrated, and logistics has basically been considered "after-the-fact" and downstream in thesystem life cycle. As a result (and based on experience), many of the systems in use today are

not very cost-effective in terms of their operation and support. Further, one often finds that

there is a lack of total cost visibility at the times early in the system life cycle when decisions

are made relative to future logistics requirements. For many systems, the costs associated

with the initial design and development, construction, the initial procurement of capital

equipment, production, etc., are relatively well known. However, the costs associated with thedistribution, utilization, and sustaining maintenance and support of the system throughout its

planned life cycle are somewhat hidden. In other words, the "iceberg" effect, as illustrated inFigure 1, often prevails, and the total life-cycle cost for a given system may not become

visible until after-the-fact. This is happening at a time when the demands for logistics (in the

future) are increasing while, at the same time, available resources are dwindling andinternational competition is increasing worldwide.



Figure 1. Total cost visibilit y

Logistics In The System Life Cycle

In response to some of today's challenges, logistics and its related support infrastructure must be considered as a major element of a "system," and not as a separate and independent entity.

A system, which may constitute an integrated mix of components (e.g., equipment, software,

people, facilities, data, information, etc.) must have a functional purpose and be directed tothe accomplishment of some designated mission objective. If a system is to ultimately

accomplish its intended purpose, there must be a logistic support infrastructure in place and

dedicated to the fulfillment of mission objectives. Further, this overall support infrastructure

must be addressed from the beginning in the life cycle when system requirements are initially

defined and the early stages of planning and conceptual design are in progress. Experiencehas indicated that a significant portion of the life-cycle cost for a system (i.e., the hidden costs

reflected in the "iceberg" in Figure 1) stem from the consequences of decisions made during



the early phases of advanced planning and conceptual design. Decisions pertaining to the

selection of technologies, the selection of materials, equipment packaging schemes, the

design of a manufacturing process, the design of a maintenance and support infrastructure,etc., have a great impact on the "downstream" costs and, hence, life-cycle cost. Thus,

including life-cycle considerations (and the elements of logistics) in the decision-making process from the beginning is critical. Referring to Figure 2, while improvements can beinitiated for cost-reduction purposes at any stage, it can be seen that the greatest impact on

life-cycle cost (and hence logistics and maintenance support costs) can be realized during the

early phases of system design and development.

Figure 2. Opportunity for impacting log istics and system cost-effectiveness

When addressing the system life cycle, it can be assumed that the different phases will

include design and development , construction and/or production, utilization (system



operation and support), and retirement (material phase-out and recycling/disposal). Referring

to Figure 3, there is a "forward" flow of activities which constitutes the process of evolving

from an identified need to the design and development, delivery, installation, and utilizationof a system throughout its planned life cycle. Within the context of this flow, and particularly

in support of the construction/production and distribution phases, are the supply chain-relatedactivities identified in Figure 4.

Figure 3. System operation and maintenance support f low



Figure 4. Logist ics activities in production/construction

At the same time, there is a "reverse" (or backward) flow. Given that a system/product will

likely fail at some point in time during its operation, some maintenance will then be required

in order to restore the system to normal operational use so that it can continue to accomplishits mission. Such maintenance activities may be performed at the user's operational site, at

some intermediate-level shop, at the producer's factory, at a "third-party" maintenance

facility, and/or a combination thereof. The accomplishment of these activities, reflected as a"reverse" flow in Figure 5, requires the consumption of certain supporting resources in the

form of maintenance personnel, spare parts and associated inventories, test equipment,

transportation, facilities, data/information, and related services (reflecting a "forward" supply-

oriented flow as part of the overall maintenance and support infrastructure). In other words,

one needs to address ALL of the activities in the life cycle for a given system, to include not

only what is presented in Figures 4 and 5 but those activities which support material phase-out, recycling, and/or disposal.



Figure 5. System maintenance and support infrastructure

The Design For Logistics And System Support

The basic elements of logistics, as reflected through the "flows" in Figures 4 and 5, must be

properly integrated throughout the system life cycle. Figure 6 shows the results of an attemptto identify and classify these elements into specific functional groups.

Figure 6. The basic elements of logistic support



While these elements may be identified separately, they are closely interrelated and these

interrelationships must be thoroughly understood. More specifically, it is important tothoroughly understand the relationships between the design characteristics of the system (e.g., packaging concepts, levels of built-in diagnostics) and the various elements of logistics, along

with the interrelationships among the different elements of support (e.g., quantities of

spare/repair parts/inventory requirements and the modes/speed of transportation). With the

on-going introduction of many new technologies (e.g., electronic commerce methods,information technology, database structures, global positioning systems, multi-dimensional

bar coding methods), the requirements for and nature of logistics are rapidly changing.

Figure 7. The major steps in system design and development

Additionally, the proper integration of these elements must be accomplished early in the

system design and development process as system-level trade-offs are accomplished and theultimate system configuration becomes defined. Referring to Figure 7, logistics requirements



(and the maintenance support infrastructure) must be initially addressed as part of conceptual

design as the system operational requirements and the maintenance concept are developed.

Given a set of system top-level requirements, design criteria for the logistic supportinfrastructure are developed, top-down allocations are accomplished, and (hopefully) a well-

balance and cost-effective infrastructure will be developed for operational use. In otherwords, the logistic support infrastructure must be developed as an integral part of the systems

engineering process and considered as a major element of the system from the beginning.

This constitutes a top-down "pull" process versus the more traditional bottom-up "push"

process which has been predominant in the past.

Summary

The purpose herein is to provide a brief overview of logistics as it is being practiced today,

both in the commercial and defense sectors; to identify the various logistics and relatedactivities being accomplished in different phases of a system life cycle; to suggest that these

logistics activities could be integrated and considered as a major "element" of the system; andto recommend that the logistics and support infrastructure be addressed as an inherent part of

the systems engineering process, applied in the development of systems from the beginning.In other words, the subject of logistics must be addressed from a total system's life-cycle

perspective from the beginning.

Reference

Blanchard, B.S., Logistics Engineering and Management , 5th Ed., Prentice-Hall, 1998 (the

figures in this paper were extracted from this text).

Logistics - A Total System’s Approach - Benjamin S Blanchard

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