The criteria of logistics systems


  1. The problem of criteria is concentrated on the question why system can be called logistic.
  2. In many practical situations we can point out attributes, which system should posses to enable us to reach our goals. These attributes are easily recognized in systems we use. But sometimes we are astonished with what system is doing. As it has happened to Mr. Philip Knight - the chief exec of NIKE - who seeing disturbances made by their new distribution system asked "So this is what we get for EURO 400 millions ?".
    The reason for such a surprise is that we don't know whether a system is logistic or not, before that system is running.
  3. But trying to answer such a question we get into the vicious circle defining system by activity being defined.
    The only way to cut this loop is to use a definition of logistics.
  4. But problem arise which is this ?

  5. We have a good example of searching for a proper definition. It was already sure, that the definition made by The Council of Logistics Management at 1984 was very good and useful. However it was changed at 1997, and I think it was a real reason to do it. It has brought us to that understanding of logistics as ancient Greeks did, i.e. as using science in practice.
  6. Thanks to that we can do a short step to formulate what logisticians do indeed. This is conditioning of delivering goods of all kinds (material, social and even spiritual).
  7. Basing on such a definition we can derive attributes that a logistic system should fulfill to enable realizing three functions of logistics.
    This means, that if any system have to enable planing, implementing, and controlling, it has to confirm such criteria.
    From the next part of the definition we know that flows mast be efficient and effective. This qualification must be established not during the flow but before it starts. So before anything starts to flow we have to guarantee that the system is logistic. That is why such criteria are useful.
    However having fulfilled such criteria the logistician cannot guarantee the success but he will be able to avoid disaster when bad circumstances would happen.
  8. This way we look at a logistics as an activity effecting the world through a logistic system, that should enable its functions be realized.

  10. As an example of not satisfying the mentioned criteria can be shown a "Maiden Voyage" of giant RMS "TITANIC" at 1912.
    Having so many lacks, from today's point of view, it was very risky to expect success in bringing passengers to their destination. The last point - integrity - means that proper things are on proper place at proper moment. The chart shows the efficiency of utilizing of 20 lifeboats during this disaster.

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Abstract: Logistics development is aided with various information systems addressed towards subordination of good flows to the sale prognosis of commodities. At the first view, a success is reached by using more modern information methodology making a source of logistics successes. In literature there are reported surprising everybody the "disasters" of businesses operating using the supply chain processes aided by the Internet. In view of that, logistics should re-adapt its approach. Today more and more strongly come to light the principles of logistic systems, so far, covered by the use of spectacular fast methodologies referred to computer systems. They impose an analysis of disadvantages of present logistics in view using a new strategy as only it can assure progress of logistics.
In the paper the new criteria describing operating functions of logistic systems are formulated. They are addressed toward fast growing logistics implementations requiring the new approach of supporting them the information systems.

Logistics development in recent years came over by characteristic phases. One can notice that in years when the present visage of logistics was shaped, the various implementations of information systems were used from the subordination of good flows to the sale prognosis of commodities. Unfortunately, information systems in these particular applications didn't reach satisfied level of commercial standards in spite of using the sophisticated software methods. In consequence, in commercial environment for the customer a free choice of possible offers was left unmatched as existing logistic systems can't precisely meet the customer's individual fancies, preferences and justifications [1]. Under such circumstances, in logistic solutions there is desirable looking for a new approach of business information flow creating more strong information ties, which can more rigorously define the supply chain well matched to customer needs [2].
The example can be the Internet assuring effective and short linking to customers: all elements of created supply chain are strongly put together satisfying the supplier expectations in terms of fast interfacing customer needs. At the first view, then, a success is reached by using more modern information system, which becomes a source of logistics successes. Unfortunately, this is deceiving conclusion [3]. Such spectacular logistics development took place under conditions of the excess of commodities determining the one-sided development of logistics not satisfying all aspects of logistics. In literature there are reported surprising everybody the "disasters" of businesses operating using the supply chain processes aided by the Internet [4]. For time to time even more painful in regards of a fact that mis-functioning of single business, that can't co-operate each another. Frequently, the efforts pull off "by force" produced commodities to customers result in excess of commodities in the stores.
So, a new strategy of computer system support of logistics has to be developed in view of wide understood the benefits and satisfaction of real customer needs and demands.

No question, that the final effect of logistic operations is dependent on the customers in sense of customer desires assuring him benefits, differentiated by random manner from customer to customer. No information systems, even the best, which can decide what customer, suppose to buy, as he decides on it by himself. So, no way to build the information system, which is going to change the customer will, related to purchasing of the goods.
In view of that, logistics should re-adapt its approach in view of focusing on widening the customer interests. Subsequently, supporting computer system is not acceptable till it no takes under consideration all customer benefits. Even, observed at the commerce the new better rules if introduced to logistic systems frequently shadowed by the spectacular computer methods uncritically introduced to logistics. In view of such disadvantages a new approach of logistics assuring its progress should be considered.
Standard relation between producer and customer is realised by the use of the goods - a given article item is delivered to the consumer on his demand. Third party of this relation is a logistician assuring effective and smooth flow of goods. This creates problem to formulate the system criteria, which should be fulfilling to satisfy logistic effective work.
The close fitting of a supply stream to demand stream in MRPII (Manufacturing Resource Planning) was predominated for many recent years just by the interest paid to the flow of the goods. The customers - main actors of a supply scene had been seen either through the demand prognosis and the production capacities or just subject of neglected of supply condition. When those days have gone a new manner handle logistic problems have appeared, they became oriented toward deep interest of customers [5].
Unexpectedly, the customers have shown themselves as not only capricious and demanding but also unsteady and ungrateful. So, the special computer programs should be prepared not only to predict the consumer needs but also to catch them into precious sets of categories. In this area the special software packets so called CRM (Consumer Relationship Management) are developed. The software of this type meets not only good market acceptation but also has a good prognosis for the future [6].
Nevertheless, this is insufficient proof that by this way can be controlled the temporal customs of the consumers. Open question is also hard implementation of those programs. Full recognition of customer needs requires some co-operation of customers but this isn't simple. Customer observing continuous readiness of producer to fulfil his needs is oriented on the escalation of his requirements, and no one should stop him or blame him for this. The interest has to be for both sides: customer and producer, however, different and seemingly excluding each another. So, before the goods will be put on the market some compromise of such interests should be find. The logistician keeps himself interest can do this by imposing right distribution rules. There is opinion that the interest of customer should overcome the interest of producer and suppliers. This determines the basic frame of providing operations of goods to customers. At first view the customer decisions how the goods should be provided to him are rational. This makes a one universal rule, while the other approaches make just unavoidable distortions. There are known the historical periods, in which frequently the customers were neglected on the market decisions. E.g. putting on the market the cars with the colour chosen by manufacturer, let say black Ford T, can be interpreted as neglecting of customer needs and imposing own manufacturing rules.
Therefore, in operations putting on the market of the goods the principle of customer domination as one side has to be assumed not only as a result of temporal business outlook but also as a conscious choice. This is a reason for looking of more universal principle better matched to the business opportunities, in general, reinforcing customer choice.
Commonly accepted the superiority of customer interest influences also the modern definition of logistics e.g. given by the CLM [7]. In this definition the three formulas satisfying customer needs in supplying processes are used planning, implementing, and controlling. They define not only the basic aspects, in which logistics should be considered but also the operating conditions of logistic information systems.

If the logistic system is understood as the technical system supporting the distribution operations, the five criteria can define its logistic feature requirements. They can be based on analysis of planing, implementing and controlling, as the result of combining common aspects of three pairs of these functions. If to consider them separately (1|3) can be formulated the first logistic criterion called the heterogeneity. The second one criterion called the integrity can be formulated similarly, if mentioned above logistic features are considered together (3|3) making one common formula. Combining pairs of them (2|3) formulate three other proposed criteria of logistic system: the connectivity, the accessibility and the transparency (fig.1).
Each of such criterion can evaluate the performance of logistic system independently while a set of all them make the basic criteria set describing main aspects of logistics. Using them can be evaluated helpfulness of technical support of logistics, also, the information logistic system operations, which using this way can be tailored closer to real world logistic operations.












Figure. 1. Basic logistic relations referred to proposed criteria

If a given system supporting logistic operations meets proposed criteria it assures high effectiveness of work, in information system this is equivalent to right specification of functional properties of such system.
Let we consider how these criteria work. First one the heterogeneity is equivalent in the logistic system allowing to evaluate all subsystems and elements characterize themselves the different structures and various manufacturing places. Some times their unification, convenient for the producers of the goods, in fact, causes limits either logistic operations or system development as such approach is unmatched to the new concepts successfully coming in the time and determining progress of information systems. A good example illustrating this is the Internet system accepting variety cooperating solution of information systems.
Next one connectivity criterion imposes in working environment on the system elements the ability to receiving and transmitting the business communicates at any time. This can considered as the system feature directly exploited or to be the potential feature for system development. The example can be wireless very useful for mobile operations the business trunking systems not existing in the past.
The accessibility criterion means that each logistic system element should be accessible during logistic operations. This assures full system control at each level of operations. A lack of such feature in typical hierarchical management structures is inconvenient. For increasing the effectiveness of operations in modern systems the hierarchical management pattern should be modified into more elastic management solutions. This is extremely important mainly for unusual operations affecting and blocking the smoothness of logistic operations.
In turn, the transparency criterion resolves itself to satisfying by the logistic system the feature of obtaining by the logistician the real operation picture of a whole logistic system, in which single, even correct, operations not overshadowing others.
The reporting systems are the example of such system affecting. Obtained aggregated data, frequently, create the unrealistic characteristics of system, if they process the data according to inadequate principles. The other example of such understanding a lack of transparency the Internet terminals are. For fast sale they present, frequently, unrealistic picture of the Internet shops plenty, simple to be reached goods, while behind of this, in fact, ineffective distribution system makes impossible simple purchase.
The integrity criterion means assuring proper information on each logistics subject at any time in each location. In logistic system this is referred to operating functions that in a whole system should well describe the reality realized by logistic processes, especially, if they are referred to satisfaction of customer needs. This is possible to be reached just in such configuration of logistic structure, which consists of from proper logistic sub-systems and subjects.
The example can be using of PDF (Portable Data File) labeling system, which information capacity allows for synchronized and smooth flow of goods in situations where a lack of this can be a disaster.

Right business information flow in the system supporting the logistic operation can be build only if such system satisfy all described above criteria. They are not only important but also hard to be simultaneously fulfilled by the systems. Thus, in the logistic system its evaluation makes equivalent to checking which and how of proposed criteria are satisfied. Having fulfilled such criteria before anything starts to flow the logistician can guarantee avoiding disaster when disadvantages occur.
Observing contemporary successes of logistic enterprises can be rather seen not as a result of fulfilling introduced criteria but favorable till now circumstances, in which they can operate. Growing market competition imposes also the changes on logistic solutions, which have to be not only more advanced and elastic but also simultaneously satisfying the all proposed criteria. Otherwise the logistic system just begins to generate the losses conditioned the circumstances. Such approach plays, first off all, a key role for the information systems as they are build, in general, not only for the logistic purposes, with exception, may be, manufacturing or store operating systems. So, straight using such information systems in logistics, frequently, isn't excellent. At the building such systems for logistics purposes to obtain their high effectiveness have to be followed the introduced criteria otherwise the economical results using of such systems will be far away from expectations.
At the using logistic systems it seems to be more reasonable to look over what to do when identified information system criteria aren't fulfilled then to try to fulfill all of them. The Internet example is good proof that a lack the accessibility and transparency for this system don't stop logistic operations as long as will be obtained confirmed orders. The Internet supposed to be used in logistics just as a tool, which should be supported in more logistic justified hardware and software systems, especially, for goods distribution purposes. Under given condition the Internet is well adjusted to logistics in other it isn't. So, a proper way handling these problems is justification the functional logistic processes before building a given information system as fulfilling proposed criteria in a given information system isn't a proof that criteria will work for another system.
For the information system in logistics the safety of business data make also important problem, however, independent from the logistic criteria problems.

In the paper the working criteria of functionality for the logistic systems are proposed. A reason to do that is an effort to complete describe such systems, mostly, in view to avoid some problems, which frequently used to meet the logistic systems in spite of using advanced supporting information systems. Proposed criteria characterize themselves full description functionality of logistic operations that are a source of formulation of proper requirements for the information supporting systems as requirements well describing the real world. The open question reminds, however, which measures and tests to use for each of such criterion.
There is not question that fulfilling proposed criteria by a given logistic system is responsible for effectiveness of logistic operations. They demonstrate, also, a key role of the logisticians, no the other professionals, in proper arranging the supply chain process. Moreover, there is rather necessary to keep such professionals away from logistic operations, as fragmentary successes in whole logistic enterprises can overshadow the real logistic results.

[1] Tulip S. "The ghost of e-Christmas yet to come", Logistics Europe, May 2000
[2] Charbel Abou-Jaoude: "Network execution", Logistics Europe. March 2001
[3] Tulip S. "The future? - forget it", Logistics Europe. March 2001
[4] Lewis C., Allen N. "Inventory alarm". Logistics Europe, March 2001
[5] Metz P.J. "Demystifying Supply Chain Management", Supply Chain Management Review, Winter 1998
[6] Tulip S. "King of the chain", Logistics Europe. February 2001
[7] The Council of Logistics Management - definition of logistics [online] 2001 July 09 last updated [cited 2001 July 15]. Available from URL: