Logistics: A Total Systems 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.

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

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

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

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.

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

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

(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).