History and Advancement of Logistics

The probable origin of the term logistic is the Greek logistikos, meaning ‘skilled in calculating’. It was initially developed in the context of military activities in the late 18th and early 19th centuries and it launched from the military logistics of World War II. It was initially a military activity concerned with getting soldiers and munitions to the battlefront in time for flight. Military typically incorporate the supply, movement and quartering of troops in a set. The main background of its development is that the recession of America in the 1950s caused the industrial to place importance on goods circulations. Now it is seen as an integral part of the modern production process. Business logistics was not an academic subject until the 1960s. A key element of logistics, the trade-off between transport and inventory costs, was formally recognized in economics at least as early as the mid-1880s.

Before the 1950s, logistics was under the dormant condition. Production was the main part of the managers concerned, and industry logistics was once regarded as “necessary evil” in this period. During the 1950s to and 1960s, applying new ideas of administration on business was a tendency.

Due to petroleum price rise in 1973, the effects of logistics activities on enterprises grew. Slow growth of market, pressure of high stagflation, release of transportation control, and competitions of the third world on products and materials all increased the significance of logistics system on planning and business at that time. The further tendency of logistics in the early 21st century is logistics alliance, Third Party Logistics (TPL) and globalized logistics.

Logistics circulation is an essential of business activities and sustaining competitiveness, however, to conduct and manage a large company is cost consuming and not economic. Therefore, alliance of international industries could save working costs and cooperation with TPL could specialize in logistics area.

Since logistics advanced from 1950s, due to the trend of nationalization and globalization in recent decades, the importance of logistics management has been growing in various areas. For industries, logistics helps to optimize the existing production and distribution processes based on the same resources through management techniques for promoting the efficiency and competitiveness of enterprises. The key element in a logistics chain is transportation system, which joints the separated activities. Transportation occupies one-third of the amount in the logistics costs and transportation systems influence the performance of logistics system hugely. Transporting is required in the whole production procedures, from manufacturing to delivery to the final consumers and returns. Only a good coordination between each component would bring the benefits to a maximum.