An Introduction to Logistics and the Supply Chain

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Department of Global Business and Transportation

An Introduction to Logistics and the Supply Chain
Oft times I have found that students come into a course1 that assumes they have knowledge of logistics and the supply chain, but, in fact, lack that knowledge.
This note helps to provide a bridge to those students and improve their chances of successfully completing the course.
Applicable to the Following Courses
TMGT 7200 MIS in Transportation
TMGT 8510 System Design and Control

Consider bottled water.2

Figure 1 Bottled Water
How did this bottled water get into your hand? To answer that we need to examine the fundamentals of transportation as part of logistics, and logistics as part of the supply chain. This note aims to do just that at an appropriate level of detail so that you will be able to see the trees and the forest.3

You are the consumer and so we will begin with you and work backward (i.e., upstream) until we can effectively go no further.


TMGT 8510 System Design and Control

2 [July 22, 2009]


“To see the trees and the forest” comes from the idiom “can't see the forest for the trees.” Also, can't see the wood for the trees. Focus only on small details and fail to understand larger plans or principles, as in “Alex argues about petty cash and overlooks the budget”--he can't see the forest for the trees., [July 22, 2009]

Page 1 of 10

An Introduction To Logistics And The Supply Chain
Printed 8/19/2009 Saved 8/19/2009

In the Beginning
The bottled water did not suddenly materialize in your hand. You may have taken it out of your refrigerator, or from a vending machine, or from a corner store (as in this story), or any of several other places. That it is, it was stored. Storage in the context of logistics is most often associated with a warehouse or a distribution center. Here we have a distribution center we happen to call a corner store.

Figure 2 You and the Corner Store
We will be building a picture of the aspects of transportation, logistics, and the supply chain as we go along in this note. Figure 2 You and the Corner Store is where this story currently stands. The obvious and fundamentally important question concerns the cause of the movement of the bottled water from the corner store to you. The cause is twofold.

First is the important notion that you had a demand for bottled water. The management and fulfillment of demand is one of the fundamental tenets of supply chain management. Second, you had something of value to exchange with the store in return for the bottled water – money. You concluded that the bottled water was of more value to you than the price you had to pay. The corner store concluded that what you were willing to pay was of more value than keeping the bottled water on the shelf or in the cooler. The two of you made a deal. This notion of value and its exchange is also a fundamental tenet of supply chain management.

“Nothing happens until someone buys something.”4
We have an exchange of value – the bottled water and the selling price – that illustrate two of the fundamental themes that take place in transportation, logistics, and the supply chain; the movement of product and the movement of money.

How did you know to go to the corner store for the bottled water? Because you had information, another fundamental theme of transportation, logistics, and the supply chain (TLSC hereinafter).


Origin unknown.

Page 2 of 10

Saved 8/19/2009 Printed 8/19/2009
An Introduction To Logistics And The Supply Chain

Figure 3 You, the Corner Store, and Themes
It might be helpful to place these themes alongside the first graphic.5 There are two other themes that emerge from this seemingly simple exchange. The first comprises the roles...
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