CHAPTER III

REVIEW OF LITERATURE

Review of related literature gives a basis for any research.

Unfortunately, there are not much studies conducted in this field of Logistics

Management. Following are the available related studies undergone in the

area of Logistics Management.

Chang-Ing and I-Jin (1999) show the relation between average logistics

cost per item, consumer demand and the interrelationship between them are

analyzed. Commodities are distributed through a depot directly or through

single intermediate terminal to many retail establishments. Minimizing

average logistics cost, or maximizing total supply subject to the demand-

supply equality determines the optimal density of retail establishments and

local terminals. The envelope curves for the optimal configuration strategies

corresponding to different values of total market area and terminal cost are

derived.

Aronsson et al (2000) have developed a template for a logistics

education course. The template addresses functional, process and supply

chain needs. The template is currently being prototyped with the principle of

‘gestalt’- the whole is greater than the sum of the individual parts.
 Outi (2000) studied logistics costs of industrial enterprises in a supply

chain. The following aspects of logistics costs are included:

a) Activity Based Costing (ABC)

b) Average logistics Costs of industrial product manufacturers and

suppliers

c) The factors which influence a company’s cost efficiency in logistics

d) An ABC simulation model for the logistics costs in a company

A study on “Logistics of small-size deliveries” has been carried at the

Technical Research Center of Finland. Seventeen enterprises participated in

this study. In this study a calculation model was developed and tested with the

logistics costs of the participating companies. After calculating the costs,

order structure as well as the working methods of the companies’ was

examined. With this information the ABC simulation model was developed to

explain and simulate the change in the logistics costs of a company.

Neil and Jim (2001) look at the emerging issues in reverse logistics

system. There is a fundamental shift in waste management responsibility from

the private waste management industry and local governments towards

manufacturers, distributors and retailers. In the recent years the responsibility

of manufacturers has been extended to cover the entire life of certain

products. The enforcement of environmental legislation becomes more

of their old products. Companies are beginning to focus on possible

distribution channels for the return of their products i.e. Reverse logistics.

This paper examine the emerging issues in reverse logistics, in particular the

information requirements for reverse logistics within the extended enterprises.

A study of end-of-life vehicles (ELVs) illustrates the specific information

flow between the key players within the automotive industry. This study

addresses the initial development of possible distribution channels, their key

operational decisions and supporting information systems for the recycling of

end of life products.

Wang and Tyan (2003) refer the involvement of Global third-party

logistics in e-commerce and globalization. An effective global supply chain

(GSC) management seeking to secure market share. Global third-party

logistics (3PL) has developed into an alternative for the needs of global

collaboration. In this, the authors present a new application of collaboration in

Global Supply Chain execution, namely collaborative transportation

management (CTM) that can reduce delivery time and to improve delivery

reliability. A case study is illustrated the application of CTM by a 3PL

provider in a notebook computer GSC. The implementation results show that

the delivery cycle time and the total cost are simultaneously reduced.

Alan and Van Remko (2003) brought a conceptual developments in

logistics and supply chain management in “lean thinking” and “agility.

developments and has benefited enormously from the groundbreaking work

in this field.

Kee-Hung and Cheng (2003) describe the supply chain performance

(SCP) in transport logistics by service providers in the transport logistics

industry in Hong Kong. The industry in this study encompassing firms

involved in the business of serving the physical flows of goods from a point

of origin, i.e. shippers, to a point of destination, i.e. consignees, in a supply

chain. These firms include those in sea transport, freight forwarding, and air

transport and third-party logistics services. The authors mention that they

have conducted a cross sectional survey with firms in the industry to evaluate

their perceived Supply Chain Performance in transport logistics and the

attached importance from both cost and service perspectives. This study

envisages managerial insights for firms in the industry to understand their

SCP in transport logistics and benchmark areas for performance

improvement.

Makukha and Gray (2004) communicate that Logistic Service

Providers claims that they are the strategic partners but they are unable to

provide the service required. The most existing logistics partnerships are still

operational rather than strategic in nature. Many logistics partnerships being

operational in nature, are known as “Strategic” without not understanding of

the term, and the influence of a logistics partnership on a shipper’s strategic

moves and competitive positioning has not been researched thoroughly

Distribution & Logistics Management,30,(1),pp.13-34). A Delphi

investigation reveals that although large companies from logistics

partnerships, the perceptions of partnership formation motives, inhibitors and

orientation by shippers and Logistics Service Providers (LSPs) are likely to

differ. The failure to integrate on a strategic level suggests a lack of strategic

management knowledge by relevant managers.

Larson and Halldorsson (2004) introduce by describing four unique

perspectives on the relationship between logistics and Supply Chain

Management. Results of an International survey of logistics/SCM experts are

reported. 200 questionnaires were sent to leading logistics educators. Based

on experts opinion, cluster analysis conducted and confirms that the existence

of the four perspectives on logistics versus SCM re-labeling, traditionalist,

unionist and intersectionist.

Lai et al. (2004) examine the factors that encourage firms in Hong

Kong’s logistics industry to implement quality management system to ensure

quality in their work processes . A generic ten-step approach for Quality

Management system (QMS) has been introduced and discussed the cost and

service advantages achieved in the case firm. The approach offers Procedural

guidelines for firms in the industry contemplating the implementation of

Quality Managements.
 Miguel (2004) indicates performance measurement systems truly

applicable in Logistics Management and control. The impact of using

performance measurers on management style has been largely neglected. The

author sets out to explore this gap using an approach based on Simons’

diagnostic versus interactive modes of control. The author aimed at describes

the changes in logistics management and control compared with the situation

in the rest of the firm. A case study method was undertaken involving a

medium sized ceramic tile manufacturer. The results show that a clear

interactive use in the logistics area, while in non-logistics department’s

performance measures is used diagnostically.

Sajed and Gunilla (2004) describe the ‘impact of logistics on

environment’. Environmental implications of logistics systems is one of the

future challenges to logisticians. This paper explores the logistics and supply

chain management (SCM) discipline to see how the scientific community

handles this challenge. The preliminary literature has revealed that there are

weak ties between the logistics/SCM discipline and the environmental

discipline. The analysis indicates that the literature seems to be unbalanced:

knowledge about assessing ‘impact of logistics on environment’ is missing,

and most emphasis is on ‘impact of environment on logistics’. From the

reverse logistics literature knowledge about implementation has been drawn,

the same has been described by scholars as explanatory and anecdotal. When

comparing the subject logistics/supply chain management and environment

“Logistics/Supply Chain and environ”

Khalid and Richard (2004) reveal that Ports are recognized as a

potential for logistics centers. Conceptualizing ports from a logistics and

supply chain management approach, it is possible to suggest a relevant

framework of port performance. The integrated approach of Logistic

Management (LM) and Supply Chain Management (SCM) are for cost

reduction and customer satisfaction. The logistics approach often adopts a

costs trade-off analysis between functions, processes and even supplies

chains. The approach also could be beneficial to port efficiency by directing

port strategy towards relevant value-added logistics activities. A proposed

framework is tested in a survey of port managers and other international

experts.

Gepfert H Alan (2004) opines that Lack of management foresight

when making major decisions on distribution facilities and operations can

deprive a company of needed flexibility for future changes and thus lock it

into a deteriorating profit trend. The author adds, “Such a lack of foresight

almost always goes hand in hand with a failure to recognize logistics as a

distinct function of the business and to integrate the planning and operating

activities of the company’s functional divisions in the light of a logistics

analysis”. This study shows that the system approach recommends in this
article describes how top managers can utilize the OR-computer capabilities

to detect significant profit improvement opportunities in the logistics function.

Markus and Jean-Paul (2004) show that Institutional dimension of

logistic largely at the global scale. The enduring growth of movements of

goods and the freight distribution networks supporting them are widely

underrepresented in regional science geographical research. Globalization has

been a dominant paradigm of contemporary geographical research. The

transport industry itself has become more closely integrated. Recent

developments in international transportation, logistics, international trade and

the emergence of e-commerce have transformed the freight transportation

sector.

Angappa and Bulent (2006) highlight that Effective Performance

measurers and metrics are essential for effectively managing logistics

operations in a global economy. For improved organizational competitiveness

the managers have to develop suitable performance measurers and metrics to

make the right decisions. A question has raised that whether traditional

performance measurers can be used and out of them which ones should be

given priority for measuring the performance in a new enterprises

environment. Some of the traditional measurers and metrics may not be

suitable for the new environment wherein many activities are not easily

identifiable.
 Measuring intangibles and no financial performance measurers pose

the greater challenge in the so-called knowledge economy. Measuring them

is so critical for the successful operations of companies in this environment.

Considering the importance of non- financial measurers and intangibles, the

authors have made an attempt through a literature survey and some of the

reported case experience to determine the key performance measurers and

metrics in supply chain and logistics operations.

Mckinnon and Alan (2006) highlight the implications and suggestions

in Lorry Road User Charging (LRCU). Truck trolling schemes are already

implemented in Switzerland, Austria and Germany. Britain is planning to

launch a Lorry Road User Charging (LRUC) during 2008. This study reveals

the various implications and suggestions in LRUC. The study clearly reveals

wide differences in their objectives, overage, technology, procedures and toll

levels. The proposed British system would have been the most complex,

allowing tolls to be varied by vehicle type, class of road, geographical area

and time of day. The study also assesses the possible effects of lorry road-user

charging on a range of logistical variables, including system design, freight

modal choice, truck utilization, vehicle routing and the scheduling of

deliveries. It shows how its logistical effects will depend on the nature of the

tolling scheme and level of charges.

warehouses in the US between 1998 and 2005. The distribution of the

warehousing industry is examined to discern the degree to which the

expansion of warehousing has gravitated towards places with superior

accessibility in the nation’s air, maritime, rail, and highway transportation

networks. The analyses indicate that the number of warehousing

establishments in 2005 and the 1998–2005 growth in the number of

warehousing establishments across a sample of 143 metropolitan counties

were strongly correlated with county-level measures of accessibility in air and

highway and to a lesser extent rail networks. These results could be useful to

communities interested in harnessing this dynamic part of the economy for

economic development.

VonderGracht and LenaDarkow (2010) propose a scenario planning

and present the findings of an extensive Delphi-based scenario study on the

future of the logistics services industry in the year 2025. The major

contribution of this study is the development of probable and unforeseen

scenarios of the future which may provide a valuable basis for strategy

development in the logistics services industry. The logistics services industry

will be significantly affected by future developments throughout the world.

Therefore, developing future scenarios is an important basis for long-term

strategy development.