Logistics: A Total System s Approach Benjamin S. Blanchard Professor-Emeritus, Virginia Tech

Transcription

1 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 disposal have 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 the acquisition, 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 without causing 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 the system 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 the distribution, 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 in Figure 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 and international competition is increasing worldwide.

2 Figure 1. Total cost visibility 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 to the 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. Experience has 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

3 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 be initiated 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 logistics 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

4 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 utilization of 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-related activities identified in Figure 4. Figure 3. System operation and maintenance support flow

5 Figure 4. Logistics 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 accomplish its 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" supplyoriented 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 phaseout, recycling, and/or disposal.

6 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 attempt to identify and classify these elements into specific functional groups. Figure 6. The basic elements of logistic support

7 While these elements may be identified separately, they are closely interrelated and these interrelationships must be thoroughly understood. More specifically, it is important to thoroughly 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 the ultimate system configuration becomes defined. Referring to Figure 7, logistics requirements

8 (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 support infrastructure are developed, top-down allocations are accomplished, and (hopefully) a wellbalance and cost-effective infrastructure will be developed for operational use. In other words, 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 related activities 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; and to 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).