Logistics Everywhere:

Can a Logistical Approach

Charles Tresser
Mathematical Sciences Department
IBM Thomas J. Watson Research Center, USA
tresser@us.ibm.com
Gilles Paché
Centre de Recherche sur le Transport
et la Logistique
Université de la Méditerranée
Aix – Marseille II, France
pache@iut.univ-aix.fr
help Tackle the Majority
of Managerial Problems?
It is now an accepted fact that logistics management aims to provide
service quality, cost reduction and efficient after-sales support through
an effective monitoring of supply chain operations. In order to achieve
these goals, logisticians have learned to define clearly the problems they
have to manage in terms of product flows optimization and to use
methods that are both rigorous and rational in order to solve them.
In this paper, we propose that it should be possible to apply and to
generalize the logistical approach to other fields, including those as
improbable as advertising and knowledge management

Since it began to be used by certain More precisely, we claim that there

large US manufacturing firms after
World War II, logistics management
has become increasingly effective.
After the initial attempts which met
with varying degrees of success,
both the definition and applications
of logistics management now seem
to be quite settled: “Logistics refers
to the systematic management of the
various activities required to move
benefits from their point of
production to the customer…The
concept of benefits is a multifaceted
one that goes beyond the product or
service itself to include issues regarding
timing, quantity, supporting services,
location and cost. So a basic definition
of logistics is the continuous process
of meeting customer needs by ensuring
the availability of the right benefits
for the right customer, in the quantity
and condition required by that
customer, at the time and place the
customer wants them” (Gourdin,
2001:2). Our aim is therefore not to
try to question the traditional
approach of logistics management,
but rather to expound the thesis
that it is possible to significantly
enlarge the scope of logistics
management in order to include
other fields. These comprise some
(and probably many) issues that
have an important bearing on the
management sciences as a whole.
are several examples of disciplines
which could each be reformulated,
at least in part, and which should
be reexamined as problems in
logistics management. In this first
paper devoted to expounding this
thesis, we focus for the most part
on two aspects of management
sciences chosen essentially
at random: advertising and
knowledge management. These
disciplines, or domains of activity,
are usually considered to be
quite far removed from logistics as
well as from each other. However,
we claim that the basic problems
in these disciplines can be
represented as instances of a quite
basic and general formulation of
logistics management, where one
can focus even more than usual on
the basic concepts of optimization
and flows. Defending such a thesis
requires two components: one
analytic and the other synthetic.
For the whole approach to make
sense, the analysis needs to reduce
logistics management to its very
core, and this core needs to be
expressed in a way that is universal
enough for it to be detected as an
essential part of the make-up of
other disciplines. At this very
early stage of our thinking, the
synthetic part is limited to the

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case study of the two examples
that have been previously
mentioned.
This paper examines the
foundations of logistics management,
starting with the original aims
and continuing up to the
most recent approaches and
strategies (including supply chain
process integration). More than
just reviewing the subject, we will
explain our belief that, despite its
obvious evolution and the progress
that has been made, logistics
management has not changed in a
fundamental way, and has not
undergone any radical change since
it began to be considered as
belonging to the management
sciences. A typical MBA course
on logistics management would
profess “to increase the
manufacturing firm’s profitability,
thus responding to the
expectations of the shareholders”
but this motivation hides the basic
thinking behind it. In other words,
logistics (supply chain)
management, which today is still
limited to playing a supporting role
in helping to improve
manufacturing and selling, is in
essence organized around the
concepts of optimization and flows.
One must also identify the
objectives that are to be optimized
and under what constraints such
an optimization must be performed
(or approximated). We would like
to emphasize that the two
disciplines which are taken as
examples have been chosen at
random. We simply wanted one
unusual example to discuss briefly
and one example which we could
discuss at greater length at this
early stage of the research and
which would provoke a debate. As
this paper is interdisciplinary, we
have made an effort to spell out all
technical acronyms, even those
that are standard in logistics
management. 1
An “orthodox” view
of logistics
Logistics management, which has
been subjected to a slow
maturation process, firstly in the
USA and then in Europe, is deeply
Supply Chain Forum An International Journal
rooted in the military sciences, the
transition happening when the
soldiers who had been working on
its development as a modern
science came back to civilian
business life after World War II.
Until quite recently, it was founded
on product flows optimization, a
perspective that has been
challenged by the new trends
towards supply chain process
integration advanced by some
researchers. We take the view that
this challenge is not motivated by
When considering
disciplines where the
methods of logistics
(supply chain)
management have not
previously been
applied, it is
necessary to identify
the entities that need
to flow, to where they
must flow and to
what benefit.
any serious breakdown in the role
of logistics management, as its
evolution over recent years has
confirmed the presence of one
major objective: to optimize
inbound and outbound logistical
operations in order to increase the
firm’s profitability and thus
respond to the shareholders’
expectations. In fact, the
commonalities of the problem
solving methods of logistics
management are so broad that not
only do they apply to both recent
and historical trends, but they also
apply to fields quite distant from
product flows optimization.
Vol. 4 - N°1 - 2003 37
Product flows optimization
Historians have recently shown
that supplying cities with food from
distant lands in order to avoid
famine is a problem with a clear
“logistical” nature, which arose in
Europe at least as far back as the
Middle Ages (see, for instance,
Abad [2002]). Should we take this,
therefore, as the first step towards
the development of a logistical
approach? Certainly not, as it is
impossible to identify any real
global thinking aiming towards the
betterment of the means of
distribution of provisions: mankind
was at that time most often
powerless in the face of random
factors over which it had no
control. So, while it is certain that
logistical problems existed, and to
some extent were routinely solved
locally through necessity, the very
idea of “logistics management” was
still to be born. It appears much
later and its origins are
undoubtedly military. Any
encyclopedia would refer to it
primarily as the combination of
transportation, provisioning, and
accommodation designed to ensure
the success of troops in combat. If
detailed enough, the encyclopedia
would probably add that the father
of military logistics is the
Napoleonic General Antoine-Henri
Jomini, the author of the famous
Précis de l’art de la guerre, ou
nouveau tableau analytique des
principales combinaisons de la
stratégie, de la grande tactique et de
la politique militaire, published in
1838, in which he presents logistics
1. After a first version of the paper had been
circulated, we received very encouraging
comments from Alan Hoffman, Bill Grey,
Nicholas Zissos, and from an anonymous
reviewer of Supply Chain Forum: An
International Journal. We also received useful
information from Naoki Abe, John Forrest, and
John Tomlin about various uses of the methods
of logistics in aspects of advertising operations.
What these colleagues, now all from IBM’s
Research Center, have taught us is that several
authors have, for instance, used optimization
techniques to make a better choice in the
distribution of advertisements, in classical
settings and more recently on the World Wide
Web. However, it seems that here we are
postulating a new approach, which in the case
of advertising aims to reformulate the
discipline in a holistic way as a problem of
logistics management. On the other hand,
these comments given to us on the applications
of optimization methods in advertising lead us
to expect that the approach developed here
should bear fruit at some stage in the future and
not just remain a philosophical perspective.
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as being one of the six parts of the
art of war (Jomini, 2001).
Throughout the twentieth century,
the field of military logistics
underwent spectacular developments,
culminating in Operation Overlord,
the landing of the Allied troops on
the occupied European Continent
on June 6, 1944. The French
coastline was fortified and
defended by particularly well-
equipped German troops, therefore
it was essential to plan the different
stages of the invasion meticulously
in order to avoid a repeat of the
cruel failure of Operation Jubilee,
which was attempted on the
beaches of Dieppe in March 1942.
To this effect, the Anglo-American
Joint Command assembled the
organizational and logistical means
necessary to anticipate and
overcome the constraints of the
terrain. More recently, during
Operation Desert Storm in 1991, the
media referred frequently to the
importance of the role played
by logistics as an essential
complement to the firepower of the
Allied armies in the successful
outcome of the military operation.
What is more, the quality of
logistics improved dramatically
during the 2003 Iraq war. In a
recent study for the Institute of
Comparative Strategy, Richardot
(2002) also referred to the crucially
important role played today by the
Combat Logistics Force (CLEF) in
the organization and efficiency of
the US Navy. Therefore, the link
between logistics and the success
of military operations remains
particularly strong; even if today it
is widely acknowledged that
logistics is also (and mainly?) a
part of management. We must
remember, however, that the
application of logistics in
manufacturing firms just after
World War II was a direct result of
what had been learned from
Operation Overlord and the overall
process of winning the war. The
distances which had to be covered
in the liberation of Europe obliged
the formalization of re-supply and
transport processes, which were
recognized as being applicable to
American firms needing to supply
customers located hundreds or
thousands of miles from the
factories.
Supply Chain Forum An International Journal
This explains why logistics
management was first perceived
by the American Marketing
Association (1948) as the planning
of the operations linked to the
dispatch of goods from the factory
to the consumer (transport,
handling and warehousing). The
goal was to adapt and apply the
tools from Operational Research,
tools that had initially been
conceptualized in a military
context. We will refrain from
delving further into the history of
logistics management (see for
instance Lambert et al. [1998]), but
we want to stress that its military
origins strongly influenced its
development until the 1970s.
During that time span, the main
questions continued to revolve
around the implementation of
constrained optimization methods
to help in the dispatching of goods
from their origination points to
their destinations. One of the best
known examples of such a problem
is the design of the delivery round
that minimizes the total distance
covered as a function of the
stores to be served in a given
geographical area. This is an
example of the Traveling Salesman
Problem, simple to formulate but
which quickly becomes too difficult
for any computer to solve when
the number of stores increases!
Logistics management was thus
limited to the “one best way” in
terms of product flows monitoring.
This focus was justified, as markets
that were previously local and
national became progressively
global for multinational corporations,
a fact which accentuated the
problem of dispatching goods at
low cost and with high service
quality. As well informed observers
of logistics management will know,
Magee (1968) made a significant
step forward by introducing the
concept of logistical processes and
the three systems:
(1) the procurement system;
(2) the operating system; and
(3) the physical distribution system.
However, we believe that a
continuity exists between the
approaches of the American
Marketing Association (1948) and
of Magee (1968), as the analysis
Vol. 4 - N°1 - 2003 38
remains based upon product
flows optimization. Magee’s (1968)
fundamentally important contribution
is to stop limiting the role
of logistics management to
that of a physical distribution
system. Contradicting the former
reductionist views, he argued that
the manufacturing firm must also
optimize product flows inside the
production cycle (work in
progress [WIP] management) and,
downstream to the operating
system, inside the physical supply
cycle (materials management), if it
wants the total logistics system – or
pipeline – to function correctly. But
is it possible to view this as a truly
radical departure when, for Magee
(1968), the issue remains the
optimum planning of logistical
operations using increasingly
sophisticated tools, such as
program evaluation and review
techniques (PERT) and material
requirement planning (MRP)? By
the time his book appeared, the
world had grown more complex
and the markets where goods were
consumed had become larger and
more distant, creating the need
for an even more effective
coordination of transport, production
and warehousing activities. More
than ever before, logistics
management experienced an urgent
need for managerial procedures
that would use mathematical
algorithms to bring about the best
solution at the right moment.
In fact, even a few years later,
and despite its revolutionary
contributions, the way Heskett
(1977) envisions logistics
management remains captive to the
same “product flows optimization”
paradigm. The economic landscape
has changed since the beginning
of the recession in the Western
countries, and in the particularly
difficult context of price competition,
firms must adjust their logistics (in
the physical distribution system,
the operating system and the
procurement system) to adhere as
closely as possible to the
downstream demand in order to
reduce costs. Long before such
reasoning became fashionable,
Heskett (1977) indirectly introduced
the idea that efficiency depended
on a double paradigm: lean
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production and agility. From a
concrete standpoint, it is the actual
sales, and no longer the sales
forecast, that must trigger the
operations of the supply of raw
materials, production, transport,
etc. Thus, Heskett (1977) implicitly
conceptualized the just-in-time
(JIT) strategy, at the very same
time as it first began to be applied
in Japan by Toyota! But while that
vision was incontestably an
innovative one, it remained
centered on manufacturing firms,
whose survival depended on the
optimization of their own logistics
systems. A good JIT strategy will
first induce a reduction in the stock
levels of goods and materials, while
it may also be the case that stock
levels abruptly increase at the
retailer or wholesaler locations.
Supply chain process
integration
Do the recent trends in logistical
thinking challenge the orthodox
vision in terms of flows
optimization? It is possible to
answer “yes” and “no” at the same
time. According to the majority of
authors (see, for example,
Underhill [1996], and Mentzer et al.
[2000]), all of the firms involved in
vertical exchange relationships
insist on the importance of the new
integrative dimension of the
logistical processes: specifically,
that in order to bring the right
product at the right time and at the
right place to the consumer, it is
necessary to coordinate all of the
logistical operations along the
supply chain. Effective logistics
management thus becomes the
means to generate a close and
durable collaboration between
suppliers, manufacturers, retailers,
and third party logistics (TPL)
service providers, so that together
they create value for the customer
(Grey et al., 2003). However, we
must also admit that the aim of a
supply chain process integration
remains to create value for the
shareholders, which in turn
requires enforcing product flows
optimization.
At a fundamental level, even if this
vision is sometimes disputed, a
supply chain corresponds to a
set of operations supporting: (1)
the logistical activities of the
Supply Chain Forum An International Journal
procurement of materials in a
network of first-tier and second-tier
providers; (2) the transformation of
materials into semi-finished or
finished goods; and (3) the physical
distribution of the finished goods
to customers. The basic idea is
that these activities and operations
must be perfectly synchronized
within the framework of supply
chain management (SCM), so that
customers can benefit from the
best possible service quality at the
lowest possible cost. Stevens
(1989) suggested the existence of
four steps leading to the emergence
of genuine SCM:
● Step 1 is distinguished by
complete functional independence
in so far as each function
operates quite separately from
all the others, protected by
“bricks” (stocks) allowing for
differences between their
operating rhythms.
● In step 2, manufacturing firms
recognize the urgent need for a
minimum coordination between
related functions, e.g. marketing
and physical distribution, so as
to eliminate a number of
malfunctions.
● Next, step 3 is there to improve
the process of coordination by
implementing the comprehensive
planning of internal flows from
downstream to upstream,
leading to:
● Step 4, when supply chain
members finally become aware
that they are merely part of a
whole.
The virtue of this evolutionary
approach is to highlight the fact
that SCM refers to a succession of
trade-offs (Lambert et al., 1998).
Trade-offs occur within a firm (e.g.,
between purchasing and materials
management, materials management
and production, etc.). The purpose
is to find overall solutions, which,
through intra and inter-organizational
collaboration, will avoid a waste
of resources and will increase
the profitability of supply chain
members. An interesting example
is that of convenience goods
manufacturers, where large
retailers and TPL service providers
work together to create the
packaging for a new product to
reduce logistical costs from the
factory to the store shelves. One
Vol. 4 - N°1 - 2003 39
could also quote the example of an
automotive manufacturer and its
main suppliers deciding to
implement a common “milk-round
delivery system”: a collection of
vehicles that visit suppliers in a
predetermined and negotiated
order, at pre-agreed times during
the night, from which there follows
a reduction of congestion at the
assembly plant (Lamming, 1983).
In hindsight, and while
acknowledging the progress made
in logistics management over the
last fifteen years or so up until now
in 2003, it is clearly appears that
SCM does not represent a radical
departure. Of course, SCM
emphasizes the importance of the
indispensable collaboration
between supply chain members in
an extended enterprise (Naccarato
et al., 2000), but the object of
analysis still remains the product –
and information – flows. On
the other hand, thanks to
technological progress, and
notably computer technologies
(from core hardware to software
and algorithms, and more recently,
pervasive computing, which
considerably enhances reach and
communication), it is now much
easier to optimize under constraint
than it was, for example, fifteen
years ago, and this is where the
essential change resides. For
instance, a small and medium-sized
enterprise (SME) can now in real
time tackle certain optimization
problems that would have been too
complex for most large companies
in the 1980s. Thanks to these new
technologies, the supply chain
members can adapt faster to all
sorts of environmental changes and
execute effective time-based
strategies, where the object is to
conceive new products faster than
the competition and then to
manufacture and deliver them to
the customer more quickly and
with no mistakes. For over half a
century, logistics management has
thus proven its capacity to improve
the performance of manufacturing
firms and, on a more global level, of
networks of firms, by relying on a
logistical approach with a universal
ambition. From this point of view,
might logistics management
become the means to help resolve
managerial problems in areas far
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removed from product flows
optimization?
The central thesis and
a first example
Clearly, the goal we have set to
ourselves is quite ambitious and
challenging, but the rewards could
be enormous for most of the
management sciences. The process
began with a strong hunch that
logistics was extremely prevalent,
with possible examples to be found
in most of the sciences, from the
Principle of Least Action in physics,
to the way a cell works in biology.
We will refrain from formulating our
thesis on such general grounds and
instead, we will concentrate before
hand on a formulation that focuses
on the management sciences. The
formulation we provide is still quite
brief but we expect that many
people will join us in the coming
adventure, and will help us to
develop the fundamentals as well
as the applications of the ambitious
program implicitly outlined in our
thesis. We have randomly picked a
discipline from within or close to
the field of management that would
be as improbable a subject as
possible to use, namely advertising,
which will be considered as the
very first example, albeit quite
superficially at this stage. However,
the reader may already see a
possible benefit of the logistical
approach, such as the generation of
a logistical language, a formulation
of goals that would permeate all
divisions of the manufacturing firm,
and the provision of qualitative
frameworks. We are among those
who believe that qualitative
analysis is important when it is not
done merely as a gesture. After all,
aren’t qualitative improvements
often far superior to quantitative
ones? 2
Logistics everywhere :
analysis and the thesis in
a nutshell
Having taken a vaguely reductionist
approach, which, loosely
speaking, condenses logistics to
the optimization of certain flows,
we had to alter our approach when
passing from pre-SCM to SCM.
Considering SCM forced us to refer
to “product and information flows”
Supply Chain Forum An International Journal
rather than just to “product flows”
with regard to what needed to be
analyzed and then optimized. This
is where the “yes” and “no”
answers to the question of whether
or not SCM has brought a radical
change to the field of logistics
management converge. If one
believes that the flows referring to
products in pre-logistics management
are essential, then one has to
consider SCM as a revolution.
Otherwise, it becomes more of a
quantitative progress, where one
optimizes over as many parameters
as the available technologies
permit and as far as the efforts of
optimization provide returns that
benefit the shareholders.
The point of view we have adopted
and pushed to its limits as the basis
of our thesis is that to some extent,
the logistics management approach
can be omnipresent in the way one
tackles all sort of problems, from
those found in the sciences to
those encountered in management.
Moreover, while restricting ourselves
to the issues covered in this paper,
we believe that most, if not all, of
the issues relating to decision support,
organization, processes and indeed
everything pertaining to the
running of the manufacturing firm,
both as an individual entity and as
part of a wider web of networks,
can benefit from the language and
methods of logistics management.
In particular, we believe that the
transition to SCM was mostly due
to the emergence of technologies
permitting the processing of bigger
and bigger optimization problems
and the collection of more and
more information that could help in
the optimization process. But we
intend to go much further and, in
what we think is a natural next
conceptual step, we propose to
tackle most other problems in
management as if they were
problems in logistics management.
Once the other aspects of the life of
a firm, or of networks of firms, have
been dealt with in this way, we
expect that a large scale integration
of the scope of logistics
management will take place, but we
will refrain from making any
attempt to do that here: the bricks
must be made before a wall can be
built. In fact, we will limit ourselves
Vol. 4 - N°1 - 2003 40
for the time being to providing two
examples that will hopefully shown
the broad community of people
interested in all aspects of
management an illustration of the
sound basis for our ambitious
program. Our aim for now is to
represent certain classical problems
as examples of logistics. A wide
range of expertise may be needed
to describe how to manage these
logistical problems by themselves,
even before the grand unification
across the board takes place. It may
be the case that the logistical
approach only brings qualitative
changes to certain problems. We
believe that this may still be quite
valuable, and we will begin with the
field of advertising that may
provide one of the toughest challenges
to our thesis. We expect that if we
could stimulate even the possibility
of a discussion about advertising as
an example of logistics, it would
provide some justification for the
validity of our proposal.
Before we get to the first example,
we want to state our belief that it
would be unfair to condemn our
approach just because a discipline
only permits a qualitative discourse,
and for instance, only qualitative
optimization after being reinterpreted
as a form of logistics. In fact, even
in the most traditional applications
of logistics management, to reduce
its impact to optimization in the
most mathematical and formal
senses would be an important
mistake. Thinking about using
empty trucks for new services on
2. This is the idea defended notably by
Williams (1986, 1990), where he indicates that
when confronted with combinatorial problems
that are too complex, mathematical
optimization fails because the computing
power that would be needed is way beyond our
reach, and in some cases will be forever so
(the computation would last many times the
life of the universe with the fastest machine
that could ever be built). Mathematical
optimization must then give way to some form
of heuristics (which may then possibly use
mathematics). Williams (1986, 1990) illustrates
this point in the context of the Traveling
Salesman Problem already mentioned. We are
indebted to John Tomlin for telling us about the
work of Paul Williams after this paper was first
circulated, and to Paul Williams for helping us
gain access to his work so quickly. Some of
Paul Williams’ theses do indeed seem rather
similar to ours, but he promotes a perspective
of “optimization everywhere,” a point of
view that now has many supporters, rather
than our position of “logistics management
everywhere”, which might assume a smaller
“everywhere” but seems to not have been
explicitly advocated before.
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the return journey, or imagining new
shapes of parts to improve packaging
by allowing much better weight-to-
volume ratios are just some
examples of how qualitative inputs,
that are facilitated by formulating the
right problems, can have dramatic
impacts. Therefore, the strategy
which we propose to use in order to
show the benefits of our thesis in
new disciplines is to map the
principles of logistics management
as completely as possible to the new
discipline (or vice-versa), and in
particular, to try to make an early
identification of the quantities that
need to be optimized and of the
constraints that are to be found.
Advertising as an example
of logistics
In order to represent advertising as a
logistics problem, one needs to think
of: (1) the message as the equivalent
of the product to be transported; (2)
the minds of the people who are the
potential customers as the points of
delivery (e.g., for certain products
Conjecture: A fundamental
reinterpretation of a problem as
a logistical issue should often
necessitate a rethinking of
its definition in order to map the
discipline in question to a
framework of logistics
management. Such attention
devoted to the mapping of the
problem would improve the
benefits of the logistical
approach.
for which a recognition is sought
beyond the existing customer base),
and (3) the advertising media as the
vehicles of transportation. Of course,
it may be appropriate to distinguish
between the message that was
intended and the message that was
received. This is good news for us! In
fact, we interpret this example of
discovering a natural distinction
between messages as being an
instance of a phenomenon that we
expect to encounter quite often.
In the case at hand, thanks to such a
rethinking, the intended message
becomes the product to be delivered,
while the slogans, trademarks, etc.,
become the package. This may have
implications regarding the relative
importance of the elements which
Supply Chain Forum An International Journal
constitute the problem and for
the ways they are dealt with. One
should remember that in complex
logistical problems: those that are
not examples of simple linear
optimization problems, substantial
changes in approach are sometimes
necessary before one can proceed
with any form of systematic
optimization. For instance, building a
very expensive new road may be the
best solution in certain typical
logistical problems. We leave the
description of any novel advertising
solutions to the experts, but existing
practices such as advertising during
the Super Bowl or the World Series
might be considered as the
advertising equivalent of that sort of
expensive road building. We will
devote the next few lines to
examining whether one can identify
constraints and objective functions
which would permit a more effective
mapping of advertising to the
logistics framework. Essentially, we
have shown so far that the parallels
exist, but to little commercial or even
conceptual advantage. Further
consideration reveals that we may
Remark 1: As mentioned
previously, we have learned of
work that uses optimization
techniques to improve the
distribution of advertisements on
the World Wide Web (see, for
instance, Langheinrich et al.
[1999], and Tomlin [2000]). John
Forrest told us that he was involved
in trying to use optimization
techniques to distribute advertising
in the UK as early as 1967.
Magazines were the vehicles used
for the advertisements in question,
but the results were unsatisfactory,
probably because of the limited
power of the computers available
at that time. This work was not
preceded by a full reformulation of
the advertising problem in terms of
logistics management, but it
certainly helps support the idea
that our proposed approach most
probably has a direct commercial
value in addition to its
philosophical implications and to
the way it may facilitate
communication inside the firm and
between firms.
Vol. 4 - N°1 - 2003 41
need metrics to even start viewing
advertising as a case for
optimization.
Arriving at a point where metrics can
be used may be the hardest task each
time one wants to seriously apply
logistics management methods to a
new discipline. If performances of
the whole system are the only
metrics that are easy to apply, then
empirical trials are a possible means
to derive benefit from the
logistical/optimization approach. For
instance, the methods found in
experimental economics could be
used, permitting the measurement of
the performances of logistics
management methods in a new
discipline. Then, the correlation of
these measurements to accepted
signs of success could be evaluated.
However, there might be cases, with
advertising being possibly one of
them, where one should not be too
ambitious to begin with, and instead
be content with using a logistical
perspective to help teach and
otherwise communicate about
certain fields of human thought or
activity, (although Remark 1, below,
is much more optimistic). We may
also find that in cases where tasks
are accomplished instinctively, but
where hard decisions also have to be
made at times, the language of
logistics might allow experts and
professionals to better formulate
their responses to the questions
which confront them. It also seems
reasonable to expect that unifying
the language will help communication
within the firm as well as between
firms.
From knowledge management
to logistics
Knowledge management (or KM), as
it is known, at least in the circles of
information technology (IT), where
everything of any importance is
referred to by an acronym, is an
interesting field. Facilitating access
to knowledge when it is needed
for the good of the firm or to
benefit humankind, or even more
ambitiously, to help generate the
knowledge needed to solve
previously unsolvable problems
sounds like an impossible dream.
Who would not want the
management of knowledge to work
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better? KM’s place in the toolkit of
the trend setting executive probably
disappeared in 2001, after enjoying a
period of tremendous popularity.
This followed the publication of two
books in 1995 whose titles signaled
the initial hopes for the success of
the new field: The knowledge-creating
company (Nonaka and Takeuchi,
1995), and Wellsprings of knowledge
(Leonard, 1995).
A snapshot of how the field evolved
can be seen in the reprinted
collection of some major
management articles on the subject
of KM (Harvard Business Review,
1998), starting with an early article
by Drucker (1988). The author
claimed that within twenty years, the
typical (large) business would
be knowledge-based. Contemporary
with that review, let us also mention
the monograph Working knowledge
(Davenport and Prusak, 1998). Most
contributors to the KM literature
were also the people who benefited
most directly from KM, e.g., through
conferences, consulting, or teaching.
This may explain why, during its few
years of intense success, KM
depended, not only, as was often
stated, on cultural factors, but also
on the models for national politics
and economics, the attitudes of Wall
Street, on whether long term success
was expected from the firm, on
whether or not the firms that paid
most for KM consulting had a
strategy which looked beyond the
end-of-quarter bottom line, the
morality in corporate board rooms
and more factors of this kind, which
were mostly hidden from view.
At least one other element that
would have helped cement the place
of KM has been ignored: namely, an
effective and authentic form of
artificial intelligence (AI). As we will
see, this more than anything else
explains KM’s fall from grace (while
less ambitious sub-disciplines such
as unstructured data analysis began
to flourish). A logistical approach
leads us to rethink what should be
the fundamental concepts of KM, as
we shall describe in the first
paragraph. In the second paragraph,
in terms of what we consider to be
fundamental concepts, we shall re-
examine the usual building bricks of
the KM discourse: data, information,
Supply Chain Forum An International Journal
and knowledge. Then, in the third
paragraph the logistics approach is
explicitly invoked, although we
consider that the approach has
already been beneficial in the way
the logistical perspective conditions
the whole problem (see Remark 5
below, in particular).
Fundamental concepts
The basic objectives of KM first need
to be defined. The list can be
extended, but it has to contain the
following three elements, to which
we will restrict our analysis: data,
information, and knowledge. Indeed,
several authors also recognize that
some classification of these three
basic elements is a necessary
prerequisite to any serious
discussion. Our approach is to
consider that these three elements
are not fundamentals, but refer to
some real – or also perhaps to some
virtual or imaginary universe. We
also consider that these elements
depend on who attempts to describe,
understand, exploit, improve, or in
general transform such a universe,
and for what reasons. The underlying
rationale for this is that we are
not only interested in the world
of business, but also in
interdisciplinary issues (even if we
are not considering the physical and
natural sciences in this paper). The
importance of data, information and
knowledge is not restricted to the
business world and we want to
comprehend their wider significance.
Here are the elements we consider
necessary to define the basic
concepts that need to be governed
by KM:
● World elements. These comprise
objects (including living entities
and people), or at least the
objective aspect of them, which in
some cases may be all that is
accessible or necessary. Also
included are entities that allow a
spatial description: (1) reports or
stories that need space-time
descriptions, with a specific time
span, (2) events or records of
events which are essentially
instantaneous, and (3) a mixture of
the above, which might be needed
to describe a personality, for
example.
● People and groups. Groups have
concurrent interests, but people in
Vol. 4 - N°1 - 2003 42
groups may also have divergent
interests, some supporting the
group’s goals and some quite
independent of them. There may
be neutral entities, and groups or
individual whose position is well
established but unknown to some
or all of the other parties. Groups
usually come with explicit
structures that are partly or
completely hierarchical, although
sometimes these may be hidden.
● Cultural models. These include
political trends, opinions, public or
secret agendas, etc., which directly
condition the ways of thinking and
Remark 2: Already, the reader
will probably detect some effects
of logistical thinking in the above
list of basic concepts: a reflection
of the desire to describe the
problem in terms that facilitate its
mapping to the framework of
logistics.
the actions of both the sending and
receiving parties.
● Messages sent and received. It is the
communication between parties
that allows them to develop their
interests in a particular direction.
Messages should also be
distinguished according to their
formal contents, intended contents
and perceived contents.
● Scales. This refers to the scales,
precision levels, and/or granularity
at which one expects to
understand a problem.
Revisiting data, information
and knowledge
At this early and fundamental stage
of the logistical approach to KM, we
feel that from the above list, the
world elements and scales are the
crucial dimensions on which to base
the analysis. This explains why we
place so much emphasis on the pair
WeS (World element, Scale). A strong
indication of its importance is the
fact that we believe it allowed us to
arrive independently and quickly at
concepts central to KM, while
bringing to light ideas which may go
beyond what has been done before.
The data set attached to a WeS is the
collection of everything that is
required to provide a full
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description of the world element in
question at a given scale. A data
element, data point, unit of data, or,
sometimes-just data, is an atom of
description. For instance, a stock
name, a time and a price –say
$102.23 of the Alpha stock at that
time– forms a data set, in fact a data
set of a special kind, as it fully
defines a WeS. In this example, the
price ($102.23) is a data point.
However, the digit zero is not data,
while the collection (0, third digit in
decimal notation) is data, of limited
value, which is contained in the
price.
A more ordinary data set, as it is
different form the WeS, is attached
to a bottle of milk at a macroscopic
scale. This data set comprises a
bottle’s shape, the volume it
contains, the volume it is supposed
to contain, its condition and
cleanliness, whether or not the
closing device is intact, the
production date and the expiry
Remark 3: No one will
probably ever need, nor ever
be able to determine the data
set of any WeS except for
simple ones such as those
given in the first example.
date. To this, one could add any
description of the product (e.g., is it
regular or low fat?), the quantities
of nutrients, the nutrients listed on
the bottle, the region of provenance
of the particular batch of milk in
question, the findings of the
veterinary examination of the
cows, an assessment of the
veterinarian’s competence and of
the competence of the person
responsible for evaluating the
veterinarian, the historical basis for
trusting the judgment of the
Remark 4: Receiving any
information changes the degree
of knowledge about a WeS,
possibly to the extent of
revealing the previously
unsuspected existence of that
WeS, or of any type of that
particular WeS. Information can
also change comprehension,
and further high functions of the
brain, but we will make every
effort to avoid discussing such
matters here.
Supply Chain Forum An International Journal
veterinarian, etc., and the list is
probably far from complete!
Information has several meanings
that should be clearly differentiated.
Firstly, it is possible to analyze it as
a collection of data intended
(by those who select and/or
Remark 5: According to
Davenport and Prusak (1998:2),
the remark that “information is
data endowed with relevance
and purpose” can be traced at
least as far back as the paper by
Drucker (Harvard Business
Review, 1998) that we have
mentioned previously. We fully
agree with Drucker’s statement
(1988). However we consider it
to be a lemma, instead of a
definition, as we think it fits in
logically with the definitions of
data and information we have
provided.
communicate it) to provide usually
partial, but sometimes full,
knowledge about a WeS. Therein
lies a strong cultural dependence.
One can also see it as a collection of
data that is thought (by those who
receive and/or use it) to provide
some, again usually partial, but
sometimes full, knowledge of a WeS;
and therein also resides a strong
cultural dependence. In addition,
information is presented primarily
in the form of a message, or more
generally, in the form of a vehicle to
store or communicate knowledge
about a WeS.
Finally, when it becomes knowledge,
information can be split into two
types, passive knowledge (PK) and
active knowledge (AK), a division
that could be the first of further or
concomitant dichotomies as we will
soon discuss:
● The PK of an individual or of a
group is the set of data and
information that can be used by
this individual or group. Some of
it may be inaccessible to anyone,
so long as its existence is known
and provided it can be retrieved
when needed;
● Implicit PK is the knowledge that
could be generated from a given
data and information set. This
knowledge may be arrived at
very easily or possibly only after
very detailed analysis;
Vol. 4 - N°1 - 2003 43
● AK is knowledge that can help
decide, act on or generate new
knowledge.
The three concepts of data,
information, and knowledge as we
have developed them so far are
considered in a different way to the
orthodox KM approach. Remember
that we have taken the statement of
Drucker (1988) to be a lemma,
instead of a definition, which is a
strong argument in favor of our
approach. The following dichotomy
between tacit and explicit
knowledge is, on the other hand,
pretty much central to the
development of KM in the 1990s.
The notions of tacit knowledge
versus explicit knowledge were
introduced by Polanyi (1983) in the
1960s, and used by Nonaka (1991)
and Nonaka and Takeuchi (1994,
1995) to formulate a theory of
organizational learning around
the theme of the conversion of
knowledge between these two
forms. To us, these notions appear
more obscure than but essentially
parallel to AK and PK, although this
may not be the case for KM experts
who have worked with them for a
long time.
Calling logistics to the rescue
We want to demonstrate that the
logistical perspective helps gives
KM some structure, and that this
point of view gives a clear
indication as to why KM failed (or
at least has failed so far). What we
really hope for is to help breathe
new life into KM (whether or not its
name remains the same), as we
believe (and everyone agrees) that
the management of knowledge will
be essential in years to come, be it
only because so many firms
accumulate massive quantities of
data and information, often
accompanied by massive quantities
of knowledge. It is clear that those
who are the most able to make use
of some of these commodities will
have a decisive advantage. So we
first need first to ask the
fundamental question “What is
what?” in order to map standard
logistics to KM. Such a mapping
exercise should be a basic
requirement for any new incursion
of logistics into the intellectual
world, and it will often be
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necessary to repeat the exercise,
sometimes frequently, when trying to
intensify the logistical approach. As
well as understanding the logistical
equivalents in the KM field, it will
also be necessary to do this for each
new field. Here are some elements of
the mapping:
● The goods: the data, the
information, and more generally
any element pertaining to
knowledge (some have expiration
dates, others long-shelf lives);
Remark 6: Some firms (e.g.,
technology companies) create
knowledge as value per se, others
create knowledge mostly as a
means to improve the production
of what the company manufactures
or sells (e.g., know-how, work
methods, controls, workflows,
etc.).
● The shelves: the heads of
personnel, at various levels in the
organization’s hierarchy;
● Other shelves (for goods with long
shelf-lives): the vehicles for the
transmission of knowledge, i.e.,
items that contain it;
● The packages: the form in which
data, information, and knowledge
will be stored, retrieved, and shared
or used in some form or another;
● The transport vectors: the various
means to transport or transfer
knowledge, from lectures to
videotapes and training, etc.
Next, we shall look at the
optimization problem(s) that may
occur with the elements that are the
equivalents of traditional logistical
entities according to the mapping.
Then, if not sooner, we must
consider the objectives of the
companies involved, the nature of
these companies, the economic
system to be used, etc. Some
questions arise simply as a result of
trying to discover the company’s
objectives – as in any logistical
problem; for instance:
● Is the firm only working for the
shareholders; is it a family
business built to last a few
generations or something in
between?
● Are there any ambitious goals, or is
there a non-financial/non-economic
agenda that also needs to be part
of the objective function design?
Supply Chain Forum An International Journal
● Does it operate in an environment
of harsh, unadulterated capitalism,
or in a more socially oriented
environment?
● Is the company only interested in
the end-of-quarter bottom line? If
not, what are the firm’s other
priorities?
● Are the long-term aims established
only for the sake of credibility and
to defend short-term stock price,
or is there a genuine long-term
strategy?3
Depending on a combination of
choices and constraints, an obvious
quantity to be optimized could be
something like the profit, the
efficiency, or the long-term averaged
profit of the company. However, a
thorough consideration of the large-
scale components of the objectives is
not enough to help, or to justify the
existence of KM: the personal
objective functions of people in the
firm have to also be taken into
account. In fact, not everyone may
want all knowledge to circulate
freely, especially if freely also means
for free (i.e., free from benefits to the
sources of knowledge). Let us now
mention a fact that is worthy of
consideration: everyone is happy to
receive knowledge, if they are not
obliged to prove how that knowledge
was acquired. However, being a free
source of knowledge may be
dangerous, besides being potentially
painful and unrewarding. It will be
essential to figure out the right
metrics, rewards, related incentives
and deterrence systems in order for
things to evolve properly.4 So we
believe that the merely thinking in
terms of “logistics management”
would bring considerable
improvements to the design of KM
strategies.
What KM seems to have most
seriously failed to fully acknowledge
is that the movement or transfer of
some forms of knowledge, especially
of the tacit or active kinds, either
from brain to brain, or from brain to
machine (to brain), may range from
difficult to impossible given current
capabilities and constraints. It also
may be too costly (and cost becomes
a more obvious issue when one deals
explicitly with optimization issues).
Too much of the KM literature has
very strongly advocated that there is
much more to knowledge than just
Vol. 4 - N°1 - 2003 44
data, information, and passive
and/or explicit knowledge. In doing
so, the KM gurus have set impossibly
high expectations by prompting
people to expect much more from
the field than is realistically
achievable, given current constraints
and limitations. This issue, which
stands as an obstacle to the success
of KM, is of course related to an issue
mentioned previously, namely, the
lack of an explicit description of the
objectives of the companies
involved.5
We believe that no serious
improvement can be made in the
most significant aspects of KM before
major progress is seen in the field of
AI. This statement, in fact, seems
almost superfluous, as it is
knowledge handling, and therefore
something similar in nature to
intelligence that we are talking about.
However, before AI makes real
progress, advances in KM can be
achieved by lowering expectations,
and this is happening right now
(often using dilute forms of AI such
as automated text analysis to their
maximum effect given current
capabilities. Another example is that
many tools have been developed that
allow the employee to find out useful
information about their own firm and
about global issues (mostly using the
Internet). Most of this progress on
the effective management of
knowledge is not made under the
umbrella of KM.
The packaging of information has
indeed begun to happen using
technologies such as the extended
markup language (XML), and we
expect that the combination of XML
and modern search engines,
combining basic search,
categorization and prioritization
functions and substitutes with
3. One expects affordability to be a necessary
condition for the firm to seriously consider long
term investments, but it should not be the sole
factor.
4. This has certainly been understood by some,
although it is, to say the least, often very well
hidden in the KM literature.
5. For instance, the more the firm cares only
about its shareholders, the more it considers its
employees as commodities, and the more
anxious it is to extract tacit knowledge from
these employees, then the difficulty in
managing this aspect of knowledge becomes
greater.
www.supplychain-forum.com
semantics, could now permit the
efficient mapping of the
management of routine but
essential knowledge to logistics.
Examples of such knowledge could
be the identities of account
holders, how the damages on cars
rented for business are covered,
who in the company is qualified to
speak about a particular aspect of
strategy, etc. The basic
classification of knowledge that we
have proposed, and the concept of
WeS in particular, will help in this
process. With the passing of time,
AI or related concepts will continue
to develop, allowing, for instance,
the better handling of unstructured
information.6 These improvements
allow complex mappings from
logistics management to KM to be
performed. It is also clear that the
issues in information handling have
already become so complex that
optimization of this handling has
begun to help, and in fact is now
vital. The issues we have
expounded in this discourse have
certainly started being used
implicitly, as the recent progress in
military logistics cannot be
explained in any other way. This
brings us back full circle to where it
all started from.
Conclusion
For about twenty years, logistics
management has undergone
important developments, both in
manufacturing and retailing firms.
At the same time, it has benefited
from a universally acknowledged
academic recognition, as
corroborated by the proliferation of
international conferences and
specialized journals. Europe has, in
part, caught up with the USA, in
particular through the
development of organizational
innovations regarding products and
information flows management.
Today, the leading logistical
strategies seem to be universalistic
in nature and some authors are not
afraid to assert that there is
undoubtedly “one best way” to
develop a sustainable competitive
advantage. Somewhat provocatively,
this paper is aimed at showing that
logistics management is even
broader in its application than
most, if not all, observers have
Supply Chain Forum An International Journal
dared to propose so far. It offers a
way of thinking that, in terms of
logistical language, vision and
methods will allow us to
comprehend and solve managerial
problems that may be quite far
removed from the traditional field
of logistics management.
The position developed here might
have been operationally
unworkable until a few years ago
before the computing revolution
began, but it is hard to believe that
it will not bear fruit in a world
where the handling of information
has evolved and improved to such
an extent. Hopefully, the rigid
treelike organizations will be
rearranged into more reasonable
and supple structures –or into
frameworks lacking rigid
structures– using modern
communication methods to more
effectively perform the roles of
communicating information,
knowledge, commands, and
feelings. To some extent, logistics
may help to redesign the very
organization of the firm, if one
follows the practical implications of
our thesis. Of course, one does not
need to believe that “logistics is
everywhere” in order to hope for
this to happen (see, for instance
Evans and Wurster [2000]), but we
do believe that this point of view
will help those involved by allowing
them to consider from a fresh
perspective the challenges they
face today and will face in the
future.
We cannot end without mentioning
that the Integrated Supply Chain
Management (ISCM) that IBM has
adopted, with earnings of $5 billion
in the first year of implementation,
goes a long way beyond SCM, even
if it still falls short of the ultra-
global vision of “logistics
everywhere” that we advocate
here. The new view of logistics that
ISCM represents is now well
accepted, assuming, in short, that
logistics is almost everywhere and
in any event, is much more
important than ever before. After
sharing its experience with its
major customers, IBM is already
6. Some observers argue that anything that
proposing a properly scaled-down resembles AI is AI, so that, for instance, speech
version of ISCM to SMEs under the recognition is AI. Although we have taken the
opposite point of view merely for the sake of
name of Integrated Supply Chain clarity, we will not enter into this debate, whose
Solution. outcome has no impact on our thesis.
Vol. 4 - N°1 - 2003 45 www.supplychain-forum.com
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