History of logistics

Stages of development of logistics in Germany

The term logistics originally comes from the military where it referred to the organization of transport, supplies, troop movements and troop accommodation.

Logistics as a planning and management instrument was first established in the field of management studies in the USA and in economics literature. From here, industrial logistics became a management discipline over the course of time.

Today, logistics is an important integrating and service function which permeates the conventional operational areas of a business (e.g. purchasing, production, human resources, ...) and coordinates these to achieve optimal material flows.

However, logistics also incorporates the entire material flow chain and the associated chain of information - from customer order processing by the company receiving the order right through to suppliers.

Logistics comprises all of the activities, across all of the operational areas of a business, which involve planning, management and optimization.

Certain subareas of logistics have developed in business practice. These include procurement logistics, production logistics, waste disposal logistics, marketing logistics, distribution logistics etc. These subareas of logistics all have something in common - they all stand for the interaction of the movement, transport and loading processes which are implemented to shift goods to a certain place by a certain time.

The aim of logistics is to use all of the resources of a business (production factors) in such a way that the logistical processes can fulfill their main task, which is to get the right quantity of the right resource to the right place at the right time in the required quality and at the right cost.

Due to the globalization and internationalization of the economy, the logistics sector is also becoming more and more internationally oriented. Most transport services in Europe already operate on a cross-border basis today.

Historically, this process can be split up into three stages of development:

1970s – Concentration on individual functions

The first stage (through to the end of the 1980s) was characterized by concentration on activities and functions related to the flow of materials and goods e.g. transport and the packaging of goods. The organization of logistical processes was fully adapted to the structure of the company and/or customer and was largely set up around the individual operational areas of the business. The logistics chain of procurement, production, distribution and waste disposal was often not seen as a chain and these individual segments were instead treated separately.

1980s – Increasing efficiency in logistics management

During the second stage (1980s), the development of a logistics management system was at the forefront. With logistics becoming an increasingly important competitive factor between businesses, the aim was to improve the interfaces between procurement, production and distribution to prevent any losses in efficiency and effectiveness.

Mid-1990s until present – All-embracing optimization of processes throughout the entire logistics chain

Accordingly, the profile of a logistics company has changed over the years. The logistics company of the 21st century is a " value added service provider", which not only transports goods for its customers but also offers a wide range of customized additional services. These services range from packaging, labeling, invoicing and provision of goods right through to contracted assembly of subcomponents and finished products, as well as services such as call center activities.

With this wide variety of activities across all operational areas of business, the logistics sector offers a very interesting mix of jobs - from high-end jobs in IT or supply chain management through to simple warehouse jobs.