Logistics is the means of getting from Point A to Point B.
All the elements represent a chain to deliver a payload from the origination point to the final destination.
- Sometimes, the package will travel through required intermediate points (e.g., border guard).
- If the journey is particularly long, it may change conveying vessels (e.g., ship hands off to truck).
Most logistical systems incorporate a few components:
- A conveying vessel (e.g., truck, freight car, ship)
- Replenishing system for the conveying vessel and operators/passengers (e.g., dry dock, yard, gas station, mechanic shop)
- Transfer system between conveying vessel and nodes (e.g., cargo crane, forklift)
The flow of a payload is always similar pattern:
- If contracted and not directly the carrier, the consignor gives the payload to the carrier with the delivery order. The obligations, costs, and risks are transferred at this time to the carrier.
- Carrier places the payload safely within the conveying vessel and give delivery order to vehicle operator, either manually or with a transfer system.
- If needed, use the replenishing system along the way to restock and give psychological stress relief.
- If conveying on a different vessel, repeat Steps 2-3.
- If necessary, change to a more accessible system for the last mile (e.g., a truck).
- When arriving at destination, move payload safely from conveying vessel manually or with transfer system.
- If contracted, give delivery order to consignee who signs for it. This transfers obligations, costs, and risks to the consignor and completes the contract.
The pace and severity of the work depends very heavily on the role:
- The designers of the logistical system have the tremendous mental burden of assessing the flow of objects and engineering it to maximize productivity, similarly to software design.
- The logistics dispatcher has the harrowing, fast-paced task of directing vehicle operators, which typically involves intuitively balancing loads and potential future needs the systems designer may not have considered.
- Warehouse and storage workers have a comparatively boring task of filling up and emptying containers within the replenishing system. The same applies to the steward/concierge/conductor role, but with the additional aspect of customer service.
- The operator of the vehicle (train, ship, truck) has a relaxing and somewhat antisocial role of safely navigating their vehicle to avoid the worst possible conditions caused by weather and other vehicles.
The project management triangle applies heavily in logistics, and there are constant tradeoffs between the 6 criteria that define logistics quality (the 6 R’s):
- The right inventory
- At the right time
- In the right quantity/composition
- In the right quality/condition
- At the right cost/price
- At the right place
There are a few others that creep up:
- With the right information
- With the right packaging
- For the right customer
For that reason, improving each delivery in logistics is its own personal challenge:
- Shorten the delivery time
- Increase the range of preferred delivery times or locations
- Increase the quality of the delivery (either by increasing its safety or security)
- Communicate the status of the delivery more effectively
These core components express constant relationships with each other:
- Obviously, logistics expects the conveyance from Point A to Point B (inventory + place).
- Safely carrying freight requires moving more slowly (quality vs. time).
- Larger or more freight requires much more time to load or unload (quantity vs. time).
- Raw goods are generally less volatile and heavier, while finished goods are lightweight and fragile (quality vs. quantity).
- Everything can be done better, but costs more money (everything vs. cost).
Further tradeoffs arise from regional barriers:
- Labor might be cheaper in another region, but with more corruption.
- The cost of fuel may offset an affordable vehicle cost.
All the systems serve to reinforce the role of the conveying vessel. It is the singular most important component in a logistics network as a collective, even though each one is technically the least important individually.
Maritime vessels typically use an engine to convey across a body of water.
- They’re typically within the water, except for hovercraft.
- In the past, they were conventionally powered by direct wind power (i.e., sails) when they were smaller, but are almost exclusively powered by engines now.
- Their largest risk of capsizing and submerging if they take on too much water due to weather, which is magnified by the open surface of the water, and there’s a tremendous risk of losing all the cargo in the process.
- They have geographical constraints tied to bodies of water (including terrain risks), but also large-scale water currents that make the vessel easier to flow towards one direction.
Land vessels travel along terrain surfaces.
- They typically employ an engine and the simple energy-conserving design of the wheel.
- Unlike bodies of water, landsails aren’t reliable because terrain differences slow down and shift the air.
- Rail vehicles don’t need wheels, but always run on a track, which must be built beforehand.
- It’s not the most cost-effective solution compared to other options, and works best on flat surfaces when you have to rapidly move large volumes of product.
- Their largest risk comes from the rails being directly destroyed anywhere along their future path.
- Every time you raise the grade by 1/4%, you have to reduce the load by half to accommodate the extra energy required to scale the road.
- Road vehicles travel on various degrees of paved roads, and represent most conveying vessels in modern society (e.g., trucks).
- Their largest risk comes from hazards directly on the road, which includes other road vehicles.
- They’re highly versatile, since they can accomplish long-distance and last-mile delivery.
- Geographical constraints are the worst with land vessels, and moving across biomes can sometimes be challenging.
Aircraft navigate through the air.
- At one time, airships operated well to rapidly move a payload, but haven’t been fashionable since the early 1900’s.
- Presently most aircraft are winged jet engines and, in more remote or risky areas, airplanes and helicopters.
- Their largest risk comes from their need to stay airborne and the hazards from dropping out of the sky, and aircraft tend to be more expensive than any of the other vehicles.
Spacecraft navigate outside the boundaries of our atmosphere.
- They’re mostly theoretical and tourism-only right now.
- Their largest risk comes from the hopelessly empty vacuum of space destroying all life and existence with its void.
- They are prohibitively expensive, and slight miscalculations or low-quality design can cause the vehicle to erupt in a rapid unscheduled disassembly.
Quite a bit of political power is tied to energy due to its ability to convey payloads.
- Highly refined fuel permits vehicles to travel more with comparatively less fuel.
- While free market economics will direct carriers to use whatever fuel is most affordable, governments can slow the flow of affordable logistical systems for other reasons.
In theory, there would be no downtime in a self-replenishing system (e.g., solar cells).
- However, it’s very hard to replace the raw power that comes from petroleum-based Internal Combustion Engine (ICE) conveyance.
- The engineering tradeoff for making more efficient fuel typically creates more gains than brand-new technologies.
The ecological impact of replenishing systems, at scale, is the basis of most climate activism.
- Ecologically-friendly technologies are typically trading off power, cost, or may cause other secondary ecological effects (e.g., batteries require rare-earth metals).
Stopping to avoid adverse weather or replenish is not free.
- Expect to pay quay rent for any time you’re harbored.
- Often, the downtime can incur additional costs if it violates any service-level agreements.
Most transfer systems are very efficient.
- They must keep all the payloads organized, but also grouped apart for each consignee and destination region.
Any improvements to a transfer system are highly reproducible.
- Even at scale, reliable logistical systems that capture all possible issues can scale as well.
- Most computer design, as well as their distributed systems, were inspired by with logistics.
Safety procedures are critical for transporting cargo.
- Always place the payload in a container with sufficient securement and padding to prevent damage to the cargo.
- Always ensure the conveying vessel has a firm grip on the container.
- Avoid making any sudden movements with the vessel or transfer system that may jar or damage the payload.
The scope of carriage and needs connects intimately with the type of payload being carried.
People are the highest-maintenance payload to transport, but always have the exact same requirements.
- Regulated air for breathing, and preferably at room temperature.
- Room to move around in.
- Bathroom needs.
- For a trip surpassing 2-4 hours, food and drink needs.
Animal payloads has the same requirements as people, but typically less severe.
- Conveying livestock generally leans tradeoffs toward conditions that favor more over better.
All transportation has several periods of time:
- An ideal amount of time to transport the product, assuming no interruptions (which is never attainable).
- An approximate time the product will actually be transported within, (~20-50% longer than the ideal).
- A maximum time, which is the length of time from an unobstructed departure to the time when the product must arrive by to fulfill the contract (preferably twice the duration of the ideal time).
Every aspect of duration is subject to the weather:
- Adverse weather conditions slow down transit and decrease the chances of the product being delivered safely.
- Further, even when the conveying vessel is unaffected, the transfer systems are often impaired from it.
When the work is sourced to someone else, it may have a few forms:
- Multisourcing – Multiple suppliers compete with each other for the customer’s contracts.
- Prime Contractor – the client holds one entity responsible, and the rest are subcontractors to that client.
- Client Model – the client is the only one primarily responsible, and everyone else is the subcontractor, who may have their own sub-subcontractors.
- One-sourcing – an exclusive contract of carriage, often with a service agreement involved (e.g., a contract for a duration of months or years).
- Mail carriers (e.g., USPS, FedEx)
- Trucking companies
- Shipping and cargo companies
Performance Based Contracting (PBC) or Performance Based Logistics (PBL) defines payment to the carrier by a measurable aspect (e.g., quantity of goods delivered). It’s effective enough, but has to consider elements like RMAs and doesn’t address Goodhart’s Law.
The carrier may be held liable for the value of the product and stuck owning it themselves (or returning it) if a few conditions aren’t met:
- The product didn’t arrive in time.
- The product was damaged in transit.
- There was an error in what was supposed to be picked up or delivered.
For that reason, carriers can insure against it or resell the product to recuperate the damages. Alternately, they can subcontract to give others the responsibility (and liability) to convey something instead.
When there are multiple conveyors, the entire string of logistical arrangements is called a supply chain, and it’s a relatively newer concept compared strictly to logistics (similar to UX versus interface/control mechanisms, or customer relationship management versus sales).
Supply chains can break down, so they need several more aspects beyond the elegant simplicity of high-quality logistics:
- Slack – Room for delays and disruptions in the supply chain.
- Redundancy – if one method of conveyance fails, have at least one contingency plan.
Most supply chains are vastly complex because every organization has an inherent selfishness. This means they only feel comfortable conveying what they know they’ll be contractually paid to convey.
For whatever reason, the product may not safely make its way to its intended destination. In those situations, most contracts make a reverse logistics arrangement in the form of a Return Merchandise Authorization (RMA). It generally involves a smaller-scale transit system (typically borrowing from the original system) with a destination designed for defective/unwanted products. Sometimes, it’s Return to Vendor (RTV), where the destination is farther up the chain than the seller.
The entire process of getting and keeping something must be considered in phases:
- Materiel Solutions Analysis (MSA)
- aka brainstorming, pre-planning, scouting, imagining
- Begins with getting your mind around the problem you need and the required resources for it.
- Completed when you know exactly what you need.
- Technology Maturation & Risk Reduction (TMRR)
- aka planning, allocating, scoping out
- Begins when considering risks, costs, and programs that cut down on possible bad things happening.
- Completed when you know exactly what to measure to track performance.
- Engineering & Manufacturing Development (EMD)
- aka testing, system design, prototyping
- The first actual “things that happen”.
- Begins with creating a system that gets something going, consists of 2 interconnected sub-phases:
- A. Integrated System Design (ISD) – a clear system that makes the previous phase happen.
- B. System Capability & Manufacturing Process Demonstration (SC&MP) – a straightforward test of that system.
- Completed when it’s reliable enough to start working with it.
- Production & Deployment (PD)
- aka first run, trial run, getting up to speed
- Begins with a 2-stage approach to creating results:
- A. Low-Rate Initial Production (LRIP) – testing to be sure it can handle a continuous flow.
- B. Full-Rate Production Decision Review (FRPDR) – running at full speed.
- Completed when it can operate indefinitely without further tweaking.
- Operations & Support (OS)
- aka maintenance, sustainability, break-fix
- Begins once everything has been tested and verified and uses Life-Cycle Sustainment and Disposal to maintain everything.
- Completed when the system is fully terminated.
Between any two points, it almost always makes sense to travel with cargo. Traveling empty is typically a waste of resources (e.g., fuel, staffing costs, wear-and-tear) so there are a couple ways to resolve it:
- Use a daisy-chained network that links the vehicles into a string of mostly-connected loads.
- This is rare, but can be highly lucrative when someone discovers one.
- The Atlantic Slave Trade from the 16th to 19th centuries started in Europe, transported finished goods to trade with Africans, transported enslaved Africans to the Americas, then moved raw goods to Europe.
- Have a substantial set of consignors on a map indicated with arrows, with a substantial set of consignees, then link them together.
- Most modern trucking industries run this way, with the loads distributed according to whoever sets a reasonable bid to transport it.
- While the job roles move around somewhat, this is the basis of how Uber, Lyft, DoorDash, etc. work.
While it’s much more in the domain of project management, there are a few efficiency-enhancing supply chain systems. They all have strengths and weaknesses.
Materials Requirement Planning (MRP) is a “push” system that tries to fulfill requirements its given.
- Assumes an uneven demand for things.
- Requires a precise demand forecast for each product and tries to anticipate possible delays or shortages.
- Demands every single creation and delivery is accurate.
- Requires constant communication, by everyone, about anything which could change the timing of the situation.
- Needs many clearly-defined lines of communication and detailed auditing procedures.
- It can’t tolerate “informal systems” to get the job done, so employees may hate it and managers often feel hampered by it.
- Most popular in mass-production assembly lines.
Kanban, or Just In Time (JIT) is a “pull” system that doesn’t permit extra production or inventories.
- Assumes the production rate at the final stage has an even, unchanging flow.
- Tries to reduce work-in-process to an absolute minimum, as well as reducing lead/setup times.
- The daily schedule for everything must stay nearly the same every day.
- Tries to minimize any idle equipment, facilities, or workers for the purpose of making low-cost, high-quality, on-time results.
- Once implemented, any revisions to the situation must be small, and it can’t tolerate load fluctuations beyond ±10%.
- It presumes workers will perform at their best when they’re given increasing responsibility and authority (i.e., high-conscientiousness personality).
- Each worker has the right stop everything in their domain when they’re falling behind or discover a defective component.
- It also assumes workers will help other workers when they fall behind, and that each person is capable of doing different types of jobs to help out.
- Most kanban systems use quality circles to maximize efficiency (e.g., cut down on sizes when possible, reduce lead/setup times, minimize losses).
- Workers are highly encouraged to give their own suggestions.
- It takes a few years to adapt, but takes 5-10 years to maximize results.
- Its weakness is its rigidity.
- Faraway suppliers, poor-quality components, unreliable systems, and worker resistance can all devastate a JIT system.
- Any communication breakdown can cause a JIT system to fail, especially if it’s a massive order without much lead time.
- Weather can devastate a JIT system, and it contributed to a severe logistics breakdown for a few years after the COVID-19 lockdowns.
- One simple solution to JIT’s weaknesses is Just In Case (JIC).
- It adds a “push” aspect by stockpiling things at different intermediate stages of the flow.
- The extra costs can be 20-30% of inventory, which can create costs if inventory stagnates or demand slows down.
Optimized Production Technology (OPT) hunts for bottlenecks, then maximizes them to the fullest extent possible.
- Considers account priorities and capacities, then calculates the near-optimum schedule and sequence of operations for each system.
- Uses a set of “management coefficients”, which are weighted functions that presume a fixed batch size and use a wide variety of important criteria for data analysis:
- Ideal product mix, due dates, necessary safety stocks, use of bottleneck machines
- Inventory levels, product structures, routings, setup/operation timings for every procedure of each component, production/transit efficiency, transfer system/plant capacity, work in process, substitutions, overlapping batches, subcontracts, safety stocks
- The factors sit on a 9-dimensional graph to provide a near-optimum combination.
- The system breaks the entire system into separate stages and searches for the best possible detailed schedule.
- Technically, only the bottleneck stages need severe planning, with the rest only requiring general plans.
- No schedule can be perfect, and it doesn’t always accommodate certain “human” issues:
- Break times will often have to be staggered to keep bottleneck machines running constantly.
- Some workers may have to stand idle when certain components aren’t necessary at that moment.
- Most cost-accounting systems must be revamped to accommodate realistic operational/inventory costs.
- It doesn’t require changing worker attitudes or involving managers, but does require a lot of effective analysis beforehand.
- It takes about 2-3 months to implement in a large company.
- Minor disruptions don’t require an OPT re-run, but theoretically large ones require re-running OPT each time.
Flexible Manufacturing Systems (FMS) is a highly computerized system that involves planning and controlling machinery with integrated-control data systems.
- The system is vastly complex to accommodate many tasks including loading, unloading, storing parts, changing tools automatically, machining, and just about anything else that’s highly repetitive you can think of.
- They have built-in production planning routines, parts-programming routines, materials-handling routines for parts/tools/accessories, and inventory/stock control.
- Further, they also have subroutines like alternatively routed batches, statistical quality monitoring and control, and balancing assembly tasks among individual FMS stations.
- Most of FMS involves the manager deciding performance criteria and constraints, then letting the computer prioritize and schedule individual batches/deliveries.
- While system works great with computers (and especially well with artificial intelligence), it has absolutely no use within a hybrid of human/machine workers.
Due to customer service or business-to-business communication needs, most logistics systems tend to separate out the “last mile logistics” as a separate domain for management.
- This permits the very unpleasant work performed by the people who would be least visually presentable to another organization.
The domain of energy dominance is one of the most significant political battles of modern society.
- If someone has control of all the means of conveyance, they operate as an incessant middle for just about everything.
- Amazon’s corporate growth has been through serving the middle of just about everything, but angled toward a business perspective (e.g., retail, computer hosting).
In war, supply chains become highly focused on time management. Every aspect of delivering even the smallest components becomes intensely critical toward a war effort. It’s a huge reason why wars are so expensive, along with the fact that supply chain disruption is also a major component of military strategy (i.e., it needs extra defense and ideally redundancy).