Handbook of Logistics and Supply-Chain Management

Book Preface

Freight transportation is both a major industry in its own right and a core input into the production process. It is therefore important to understand how commodities, including raw materials and semi-finished products, are moved about in a modern economy in a manner that serves the needs of business more generally. Important changes in technology, markets, institutional structures, and management theory have led to new ways of thinking about this process and to the development of ways of more closely tying transportation into the larger production process.

Logistics was initially a military activity concerned with getting men and munitions to the battlefront in time for the fight. It was seen as important but not vital for military prowess; Alexander the Great excelled at it, while Napoleon was dismal. But it is now appreciated as being an integral part of the modern production process. While only a few years ago it was virtually unheard of for companies to have logistics experts on boards of large manufacturing companies (homage being paid to financial and production management), this has now changed considerably. There are now also many more specialized companies that offer a full range of logistics services to meet the needs of companies which find it more efficient to out-source that part of their needs. The quality of transport logistics is now recognized as often being vital to the success of many organizations. Nationally, the ability to transport goods quickly, safely, economically, and reliably is now seen as vital to a nation’s prosperity and capacity to compete in a rapidly globalizing economy.

What has brought this change about? Certainly there have been technology changes both in the strict transport hardware that is used and in the supporting hardware such as packaging (modern logistics would not take its current form without the advent of the container). There have also been massive changes in the information technology field which, in simple terms, allow a closer matching of the needs of transport users with suppliers, both within businesses and outside. But there have also been institutional changes, often neglected in the management literature, such as the deregulation of transportation, financial, and communications markets and the liberalization of international trade regimes. Perhaps of most importance, however, have been the speed and the ingenuity shown by management in taking advantage of these developments to restructure and reformulate the notion of logistics.