ABSTRACT
To realize its objectives, an organization has to make decisions on four com ponents. The first is logistics infrastructure, which is a model of the physical flow of goods, services and information of an organization. Incorporated in the model are decisions relating to the locations of the primary functions in the transformation process, from purchasing through production and distribution to the customer (van Goor et al. 2003). These decisions determine the structure of the supply chain network from supplier to end consumer, i.e. its topology. Once the logistical infrastructure is in place, the planning and control over the flow of goods and information through the pipeline of the infrastructure has to be arranged for. Each link in the supply chain should realize an optimal customer service to its customers in the next link. This has to be planned in advance, and the execution of this plan has to be controlled in real time. The third component is logistics information. Ever increasing information flows and demand for real-time information have created a need for greater information processing capacity. In this respect, the past decade has shown an enormous technological progress. Computer elements have become faster, smaller and more robust, giving them a wider applicability. Computers are increasingly used in networks with faster connections, allowing an increase in information processing capability. More and better satellites make a global, wireless communication network possible. The emergence of small, networked RFID tags, ‘intelligent agents’, and Network Enabled Capabilities (NEC) are telling examples of this trend (Carrico and Greaves 2007). The design of an optimal logistics organization, the fourth component, is based on the other components of the ILC. The quality of the logistics planning and
control system and supporting information systems determine the type of personnel organization an organization needs. Improvements make it possible for logistic managers to manage the whole supply chain instead of its nodes. This needs a dif ferent type of logistic manager. As a supply chain manager, one must be able to deal with chain problems, realize that decisions have a higher impact and need more translation, and finally one must react more quickly to prevent shortfalls in the supply chain. This demands detailed knowledge of the logistics processes at differ ent levels of the whole supply chain. It needs true logistic professionals instead of warehouse, distribution, and transportation managers. Once the designed logistics concept has been implemented, and each element operates in a day today environment, the performance of the logistics system can be monitored. ‘Logistics cost’ is an example of an aggregated performance measure. Comparison of the real performance and the norm for performance is a managerial reporting mark for the company. If the deviation is too large, the organization has to re-plan the business or readjust the operation. If the deviation is structural, then one or more elements of the logistics concept have to be redesigned.
