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Executive Summary
This white
paper continues to address the notion that logistics is comprised of
two primary components: Macrologistics and Micrologistics; and that
logistics is best represented, visually, as a set of gears driving the
process (micrologistics); surrounded by macrologistics, which manages
the process.
Macrologistics
is the
study and management of the overall aspects, process and workings of
logistics.
Micrologistics
is the
study of the operations and the application of the components of logistics,
such as transportation, inventory, warehousing, purchasing and customer
service. This description incorporates both the gears and cogs.
Our previous
white paper, “Logistics is Not a Chain”, addressed the introduction
of the dichotomy—macrologistics and micrologistics.
This white
paper will:
1.
Discuss The Logistics Dichotomy
2.
Introduce the application of Macrologistics and Micrologistics
The Logistics Dichotomy
The traditional
view of logistics, primarily because the term is all inclusive; and
its scope is so large, forces a company’s perceived needs and the available
solutions or solution path to be equally inclusive and as large in scope.
Likewise, managing the entire logistics process is similarly perceived
to be prodigious, and extensive. This characteristic caused the method
of approach, problem identification and available solutions to be, singularly
robust. Both needs and resource identification are best addressed when
the areas of review and concern are simplified or segmented into manageable
components. The net result was a failure to see unique problems and
the denial of incremental solutions. This overwhelming view has achieved
little benefit and its propagation will continue to drive the potential
benefits of world class logistics excellence further and further from
our reach.
The sheer
magnitude of logistics and its pervasive nature positions it to be likened
to the corporate octopus. The body represents the core competencies,
while the tentacles or feelers reach into the entire organization extracting,
delivering and processing the attributes and capabilities of logistics.
Logistics as a device, mining the data, and harvesting the opportunities,
positions it as the best corporate business discipline that is capable
of achieving profit improvement and overall success in operating performance.
The impact of logistics, more so than any other discipline, on every
business, can be so powerful and enabling that it is of utmost
All content
copyright by TransportGistics, Inc. All rights are reserved. The authors
of the articles retain the copyright to their articles.
No material may be reproduced electronically or in print without the
express written permission from TransportGistics, Inc. or the
individual authors (papers@transportgistics.com)
importance
to develop a methodology that will allow the entire logistics capability
to prosper within an organization and amongst its trading partners
. By re-examining logistics through
a telescope, it became clear that segmentation of the term could significantly
increase effective management and operations.
Beginning
with the premise that logistics could offer significantly more to industry,
economics seemed like an appropriate reference (see, “Logistics is
Not a Chain). When we compared and contrasted logistics with economics
it became clear that the opportunities and benefits that economics achieved
after its dichotomy (macroeconomics and microeconomics) could be reasonably
applicable to logistics. By linking macro and micro to the term “logistics”
a new capability was created. With macrologistics and micrologistics
as the primary components of logistics, we now have the ability to focus
more precisely and meaningfully on of the subject.
Macrologistics
and Micrologistics, as indicated in our previous paper and immediately
above, began with our belief and the objective that,
“The impact
of logistics, more so than any other discipline, on every business,
can be so powerful and enabling that it is of utmost importance to
develop a methodology that will allow the entire logistics capability
to prosper within an organization and amongst its trading partners.”
The strength
of our conviction is further supported by our belief, “that logistics
will deliver the most comprehensive, significant and dramatic value
proposition to world wide commerce, individually and collectively”,
demanded that we thoroughly examine all relevant business disciplines
that, at least, appeared to be analogous. In our search, it became evident
that economics was analogously unchallenged.
In pursuit
of our objective, we sought a methodology that could be relevant to
the logistics discipline and one that professionals in both fields could
be reasonably comfortable with. The supportive, study and knowledge
base offered by the economics discipline provides such a fundamentally
sound structure that logistics’ acquisition of the economics principles,
applications and formula will achieve rapid improvement in the following
three areas of logistics:
·
Deliverables
·
Study capabilities
·
Benefits
And by
linking the two disciplines and harmonizing their respective inference
bases and engines, the corporate culture is cross pollinated and many
new allies are created. Collaboration, the “holy grail” of logistics,
is now an achievable goal, worldwide.
Application of Macro and Micro Logistics (MML) Relating to Solution
Selection
There
are, at least, several different arguments that have been advanced,
purportedly to identify the reason that purchased and internally developed
logistics solutions have not yielded the anticipated
benefits and results. The all inclusive view of logistics demanded that,
both the problem and its solution had to be “robust”. Constrained by
the singular view of logistics, there was a natural denial that, “simpler
is better” or that unique problems even existed, additionally there
was an unwavering belief that all problems had to be addressed by a
technology solution. Consequently, the dilemma of two moving targets
exists; instead of the problem being focused and well anchored, it like
the solution is in constant motion. Therefore, the ability to achieve
a value match on need and solution was impossible. At best, the solutions
have been relegated to, “Rube Goldberg” symptom treatment rather than
problem resolution. The result of this failure is demonstrated by very
little or no ROI, waste of time and talent and the continuing burden
of supporting a decision whose criteria were imperfect.
Another
example of this failure appears in an article published in Eyefortransport
(http://www.eyefortransport.com.);
wherein it was stated, “Most shippers still have not made considerable
progress in terms of optimization, cost savings, and creating a robust
transportation network in which suppliers, carriers, and third party
providers can all collaborate and share information to ensure the optimal
balance between cost and service.” The article goes on to say, “those
who procure transportation are under the illusion that squeezing a few
more discount points from their carriers for a few pennies here and
there are the ways that a company can ultimately lower transportation
expenditures.”
The above
example, while not acknowledging it, clearly supports the importance
of the logistics dichotomy, at least, in two ways: in the first instance,
the singular view only seeks a robust solution and in the second, the
trivializing of the cost advantages to be obtained from effective freight
rate negotiations. In fact, both objectives are important; the significant
difference lies in the method of approach. The MML method recognizes
the importance of freight cost reduction in conjunction with carrier
profitability while simultaneously analyzing the issue against the goal
of world class logistics excellence. More specifically, it provides
professionals with the ability to address the micrologistics functions
of effective negotiations and collaboration while the macrologistics
impact can be measured and monitored. This approach further benefits
the process by providing a continuing improvement cycle whereby the
micrologistics functions are enhanced, impact is measured at the macrologistics
level, and achieving the appropriate “tweaking” of the micrologistics
function. The micrologistics process recognizes unique
problems and assigns corresponding
discrete solutions; it does so in conjunction with the overall
goal of macrologistics, serving up incremental discrete information,
incremental connectible information and robust information. Decision
criteria are presented at the conclusion of the analytical phase thus
facilitating the solution selection process.
Utilizing
macrologistics and micrologistics the user is better equipped and can
focus more rapidly on problem resolution, process improvement, areas
of opportunity, and solutions. This new found MML methodology
significantly improves visibility allowing the user to drill down more
precisely and to focus on an appropriate level of detail than was previously
possible. Data collection, using the MML method is more robust, therefore
data and information, using the MML method
of approach, are more prolific; process interrogation and improved decision
criteria are the result. Consequently, higher rates of success, regarding
problem identification and solution matching occur more frequently.
The MML tool continues to demonstrate overall efficiencies and economies.
Conclusion
The information
presented above, speaks to the limitations of traditional logistics
thought and presents the theoretical, practical and general activities
and capabilities of macrologistics and micrologistics.
Our next
paper on this subject will demonstrate how
MML
overcomes
the limitations of logistics as a singular, linear and unfluent chain
(traditional method) and how this chain is properly replaced with the
gears and cogs.
Continuation
Please
consider this white paper as a continuum in this subject area, succeeding
white papers will address common issues and address them with common
solutions. We encourage our readers to direct any specific questions
or comments to
papers@transportgistics.com .
Disclaimer
The information presented above represents the opinion of the author and
not necessarily the opinion of TransportGistics, Inc. nor is it presented
as a legal position.
All content
copyright by TransportGistics, Inc.
All rights
are reserved. The authors of the articles retain the copyright to their
articles.
From TransportGistics, Inc. individual authors (papers@transportgistics.com)
Texte traduit du Web et non mis en forme.
Document récueillis et proposé par
http://www.lomag-man.org
04/11/2005
Vers la version française:
dichotomiedelalogistique_fr Texte traduit du Web et non
mis en forme.
Vers la version anglaise:
thedichotomy_oflogistics_eyeftransp_an-112005
04/11/2005
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