I’ve already written a few lines on the Risks connected with Logistics processes.  As our business world becomes larger and larger and ever increasing quantities of merchandise are stored in faraway parts of the globe and moved from one part to another, we can’t afford to ignore that Logistics processes represent Risks by themselves.

Logistics impacts upstream and downstream industry, the environment, and finance and employment processes.

I don’t think I have to quote any example.  It’s just enough to look around us to realize that any business would be at a loss were it not supported by Logistics.

We’re all accustomed to the Logistics acronym FIFO (First In First Out), that we first heard of from the car, pharmaceutical and food industry.  T he former intended the principle to be used to keep inventories low and the latter to prevent perishable products to be sold beyond shelf life expiry.

Then came the acronym LIFO (Last In First Out), which also meant to prevent misuse of perishable products, but this principle required store managers to think the opposite way they were used to, that was not always easy.

But the letters can be combined differently, to give the acronyms different meanings:

• FOLI – First Out Last In: equivalent to LIFO
• FILO – First In Last Out : means to manage stores in such a way that I would call traditional, that is, products are randomly stored, and collected as they surface.

These acronyms might make one think that Logistics would be limited to store products in ways to preserve some of their basic properties, and to handle them accordingly.

But they don’t tell us much about the Logistics processes that would go beyond such limits.  For example, they don’t tell us much about the most convenient route a transportation means – whatever it would be – should take to be quickly and safe at destination.

Nor they tell us much of the communication risks between the transportation means and its headquarters.

Nor they tell us of the opportunities to make the transportation means to run – totally or partially – the product production processes.

Here, too, past and recent History provides us with examples from which we could learn.  Recent History, especially, gives us case studies where value adding activities are brought more and more upstream in the production processes, though there still are many cases where high value, highly sophisticated products are being made thousands of miles away.

Beside outsourcing, that still implies the criticality of supplier control. Logistics processes have not developed significantly.  They are still limited to forwarding or transportation, coupled to storage.  It seems that innovation is an unknown principle to basic Logistics processes.

If we consider the average idle times spent by products in a company’s warehouse, being trucked to a terminal – air, railway, sea – then being transported to final destination, they would probably last longer than the product production processes.

So why not carry out parts of the production – if not the whole production – while the product is being stored and transported?

Certainly not all and every product can be made – even partially – under such conditions, but there surely are – with the technical and technological resources presently available – some that could be automatically assembled or mixed, packaged while products are in transit.

It’s a question of shifting the point of view to see Logistics as a set of processes integrated with production processes and not a process that feeds raw materials and takes finished products away.

The basic Logistics’ principle should therefore be do while you move (DWYM).  W e must not forget that we keep doing things on a planet that’s only apparently motionless, while it actually moves at a tremendous speed, instead.

Although not pretending to be exhaustive, the following points should be addressed to investigate the possibilities and opportunities of processing products while moving them, and their side-effect risks:

• What are the value adding process steps and what are not? For example: idle times – how long, how expensive; storage and storage areas – how long, large, how expensive.
• How expensive are the IT processes, hardware, software necessary to control the non value adding process steps? How long does it take to train people? What are the costs?
• When it comes to corrective and preventive action to be carried out on process steps, how non value adding process steps are affected? Corrective and preventive action should first of all be aimed to enhance process effectiveness and efficiency.
• How can discontinuous or semi-continuous processes be developed to be continuous? That is, from incoming goods or services to outgoing goods or services in a continuous flow. Logistic knots cannot be offhand bypassed.  Of course, the production process has to be planned so that there will no overlaps of static – or idle – steps and steps where the product flows. The image of a river flow can well be representative: even in lakes or pools the river never stops flowing.

Let’s think of first-aid ambulances, for instance: how many lives do they save thanks to their on-board equipment to take care of the diseased or hurt during the journey to the hospital? That’s health manufacturing thanks Logistics.

Googling this issue I found quite a number of references but almost all emphasize manufacturing, leaving to Logistics a kind of supporting role, specifically store goods here and there, move them from here to there.

Even high-tech, costly services are treated the same way, pull out of the drawer the computer and use it only when it’s necessary, then put it back in the drawer so it won’t get dust.

We’re so used to think in limited terms of Logistics that it is very hard for us to see differently except as mere storage and transportation.

Spacecraft used to be the wonder of the century.  Now, there are people up there living and working in orbiting space stations.

Of course, risks can be encountered when moving from traditional Logistics of simply handling, storage and transportation to Logistical manufacturing to a more advanced concept of Logistics, that puts it on the same level as manufacturing.

This is just the same as when quality assurance was thought to take over quality control.  The latter was meant to measure every single piece or batch to find its (non) conformity to specifications.  Quality assurance was instead intended as a set of preventive counter-measures that would prevent producing wrong or non-conforming product.

It is therefore to be expected that in the initial stages, Logistics will be seen as a competitor to manufacturing, that will eventually replace.

The risks to be taken care of are mainly due to habits.  We have long seen manufacturing as a key process and Logistics as a supporting process. This might explain the poor resources that are put at Logistics disposal both quality-wise and quantity-wise.

In spite of this, Logistics processes show many advantages:

• More flexible management of incoming materials and outgoing products – or services – flow.
• Time and resources savings.
• Easier and therefore more effective auditing process due to integration of two key elements.
• More leveled top-down and bottom-up vision of the company.

There are two further points worth considering:

Innovation goes hand in hand with Revolution, I’d say the former depends on the latter.  I refer Chris Anderson’s book Makers – The New  Industrial Revolution.

It is said that about 90% of oil is burned as fuel.  There is ample evidence that – may be with a slight increase of fuel consumption, the more “stable” means of transportation such as trains and cargo ships could be equipped as “mobile factories” and produce products or services while on their way to destination.