Logistic engineering

From Wikipedia, the free encyclopedia

This article does not cite any references or sources. (June 2008)
Please help improve this article by adding citations to reliable sources. Unverifiable material may be challenged and removed.

This article or section needs to be wikified to meet Wikipedia's quality standards.
Please help improve this article with relevant internal links. (June 2008)

Logistic Engineering deals with the science of Logistics. Logistics is about the purchasing, transport, storage, distribution, warehousing of raw materials, semi-finished/work-in-process goods and finished goods. Managing all these activities efficiently and effectively for an organisation is the main question at the back of the mind of any logistic engineer.

Different performance measures are used to examine the efficiency of an organisation's logistics. The most popular and widely used performance measure is the landed cost. The landed cost is the total cost of purchasing, transporting, warehousing and distributing raw materials, semi-finished and finished goods.

Another performance measure equally important is the end customer fillrate. It is the percentage of customer demand which is satisfied immediately off-shelf. Logistics is generally a cost-center service activity, but it provides value via improved customer satisfaction. It can quickly lose that value if the customer becomes dissatisfied. The end customer can include another process or work center inside of the manufacturing facility, a warehouse where items are stocked or the final customer who will use the product.

Another much more popular derivative and a complete usage of the logistic term which has appeared in recent years is the supply chain. The supply chain also looks at an efficient chaining of the supply / purchase and distribution sides of an organisation. While Logistics looks at single echelons with the immediate supply and distribution linked up, supply chain looks at multiple echelons/stages, right from procurement of the raw materials to the final distribution of finished goods up to the customer. It is based on the basic premise that the supply and distribution activities if integrated with the manufacturing / logistic activities, can result in better profitability for the organisation. The local minima of total cost of the manufacturing operation is getting replaced by the global minima of total cost of the whole chain, resulting in better profitability for the chain members and hence lower costs for the products.

"Logistics Engineering" as a discipline is also a very important aspect of system engineering that includes reliability engineering. It is the science and process whereby reliability, maintainability, and availability are designed into products or systems. It includes the supply and physical distribution considerations above as well as more fundamental engineering considerations. For example, if we want to produce a system that is 95% reliable (or improve a system to achieve 95% reliability), a logistics engineer understands that total system reliability can be no greater than the least reliable subsystem or component. Therefore our logistics engineer must consider the reliability of all subcomponents or subsystems and modify system design accordingly. If a subsystem is only 50% reliable, one can concentrate on improving the reliability of that subsystem, design in multiple subsystems in parallel (5 in this case would achieve approximately 97% reliability of that subsystem), purchase and store spare subsystems for rapid change out, establish repair capability that would get a failed subsystem back in operation in the required amount of time, and/or choose any combination of those approaches to achieve the optimal cost vs. reliability solution. Then the engineer moves onto the next subsystem.

Logistics Engineers work with complex mathematical models that consider elements such as Mean Time Between Failures (MTBF), Mean Time To Failure (MTTF), Mean Time to Repair (MTBR), Failure Mode and Effects Analysis(FMEA), arcane statistical distributions, queing theory, and a host of other considerations. Obviously, logistics engineering is a complex science that considers tradeoffs in component/system design, repair capability, training, spares inventory, demand history, storage and distribution points, transportation methods, etc., to ensure the "thing" is where it's needed, when it's needed, and operating the way it's needed all at an acceptable cost.