ABSTRACT
The logistics concept, defined as the integrated management of the forecasting, inventory-control, transportation, warehousing, order-entry and customer service, and production planning functions, is taking hold and is broadly accepted in a growing number of companies. Companies that have embraced “integrated logistics management,” or the “total cost concept,” have attained attractive competitive positions. The people in these functions become experts and seek to achieve superior performance in their function—what the author call “functional excellence”—as measured by higher sales, lower transportation costs, lower inventories, or better control of operations. An increasing number of companies are beginning to look at their operations in terms of a pipeline that manages the flow of materials from source to ultimate consumer. The great benefit of supply chain management is that when all of the channel members—including suppliers, manufacturers, distributors, and customers—behave as if they are part of the same company, they can enhance performance significantly across the board.
