Chapter 2.

Overview
of Logistics
MSc. Dang Thuy Long Chau
2.1. Historical Milestones
of Logistics
Logistics is a concept with a long history of development, originating from
the need to transport and manage goods, people, and resources in military,
economic, and commercial activities. From ancient times to the present,
logistics has gone through many important stages of development, adapting
to changes in technology, economy, and society.
Ancient and Medieval Periods

1 Ancient Greece and Rome

The concept of logistics originated in ancient Greece and Rome, when military strategists used the term
"logistikas" to refer to the calculation and management of the logistics of military campaigns, such as
providing food, weapons, and equipment to soldiers.

2 Ancient China
Sun Tzu, in his work "The Art of War," also emphasized the importance of supply and transportation in
warfare.

3 Middle Ages and Renaissance

Logistics was further developed during major expeditions and trade activities between nations.
Maintaining land and sea trade routes played a crucial role in providing resources and goods.

4 Age of Exploration
Explorers like Christopher Columbus and Vasco da Gama relied on logistics networks to expand trade
routes and connect continents.
The Industrial Revolution
Era
Transportation Development
The development of railroads, steamships, and transportation systems
completely transformed transportation and logistics activities.

Large-Scale Transportation
The ability to quickly transport large quantities of goods helped drive the
development of the economy and industry.

Logistics Optimization
Logistics during this period were also more optimized with the
construction of large-scale warehouses, seaports, and distribution
systems.
The 20th Century and
World Wars
Development of Military Logistics
1 Military logistics underwent significant advancements during
World War I and World War II.

Coordination and Supply

The ability to coordinate, transport, and supply weapons, food,
2 and medical resources to the battlefields contributed to the
success of military campaigns.

Formalization of the Concept

3 The modern concept of logistics has been formally defined and
more widely applied in both civilian and military domains.
Post-War and the Development of
Commercial Logistics (1950 - 1980)
1 The Birth of 2 Development of 3 Just-In-Time (JIT)
Containerization Modern Model
Containers helped standardize Transportation The Japanese Just-In-Time (JIT)
packaging and transportation of The advancement of modern model emerged, focusing on
goods, reducing costs and transportation modes like minimizing inventory and
transit time. container ships and cargo optimizing the supply process.
planes created a leap in
transportation and distribution
capabilities.
The Era of Globalization
(1980 - present)
Information Technology and the Internet
The application of information technology has transformed logistics to
become more responsive, accurate, and globally connected. Logistics
management software, warehouse management systems, and GPS have
improved operational efficiency.

E-commerce
The development of e-commerce platforms like Amazon and Alibaba has
changed the way logistics operates. Companies must develop fast and
timely distribution and delivery systems.
Logistics 4.0 Trends and
Sustainable Development
(from 2010 to present)
1 Logistics 4.0
The emergence of Logistics 4.0 is based on technologies such as
Artificial Intelligence (AI), Internet of Things (IoT), Blockchain, and
Big Data. This helps optimize processes from warehousing,
transportation to distribution.

2 Green Logistics
Pressure from environmental issues and climate change has driven
the development of more sustainable logistics solutions such as
transportation vehicles powered by renewable energy, and optimized
routing to minimize carbon emissions.
Summary of the History of Logistics
Development
Period Key Characteristics

Ancient Times Military logistics management

Middle Ages and Renaissance Development of trade routes

Industrial Revolution Railroads and steam power

20th Century Modern military logistics

Post-war (1950-1980) Containerization and Just-In-Time

Globalization (1980-present) Information technology and e-commerce

Logistics 4.0 (2010-present) AI, IoT, Blockchain, Big Data

2.2. Some Concepts about Logistics

"What role does Logistics play and in which stage of the supply chain?"
2.2.1. Concept of Logistics

Logistics plays an important role in the supply chain, ensuring smooth operation from raw materials to the final product. In
the supply chain, logistics is present at all stages from raw materials to the final product, including the distribution process
to the customer.
2.2.1. Concept of Logistics
Definition Objectives Scope
Logistics is the process of The main objective of logistics is Logistics includes various
managing and optimizing the to ensure the right product, the activities such as transportation,
processes related to the right quantity, the right quality, warehousing, packaging, order
movement and storage of goods, at the right location, at the right processing, inventory
services, or information from the time and with the most management, and customer
point of origin to the final reasonable cost. service.
destination.
2.2.2. Stages of Logistics Service
Development
Stage 1: Physical Distribution 1
(1960s - 1970s)
In this stage, logistics services focused on the
movement and distribution of goods efficiently, 2 Stage 2: Logistics Systems (1980s
aiming to meet customer demand. - 1990s)
This stage witnessed the development of
logistics systems with the integration of
Stage 3: Supply Chain 3 activities such as transportation, warehousing,
Management (21st Century) inventory management, and order processing.
In the new era, logistics has become a critical
part of supply chain management, connecting
all the stages from suppliers to end customers.
Stage 1: Distribution
Transportation
1
Efficient and timely transportation of goods

Distribution
2
Optimal distribution of products and goods to customers

Warehousing
3
Safe and efficient storage and preservation of goods

Packaging
4
Attractive packaging and labeling to protect goods

In the Distribution stage, the related activities such as transportation, distribution, storage, and packaging are closely
coordinated to ensure the effective and timely delivery of products and goods to customers. The goal is to optimally meet
customer needs.
Stage 2: Logistics System

In this stage, logistics activities such as inventory management, transportation, and order processing are integrated into a
complete logistics system. This helps optimize operations, meet customer needs in a timely and more efficient manner.
Stage 3: Supply Chain Management (21st
Century)

Comprehensive Supply Chain Technology & Data Global

Connectivity Optimization ERP, WMS, TMS, Big Data, Connectivity
Logistics has become an The goal is to create a AI, and IoT play a crucial Logistics must meet the
indispensable part of flexible, efficient, and role in optimizing logistics need for global
supply chain management, responsive supply chain operations and supply connectivity, with the
connecting all stages from that can quickly adapt to chain management. movement of goods across
suppliers to the final market changes. multiple countries and
customers. regions.
The Importance of Logistics
in Business
1 Cost Optimization
Effective logistics helps businesses reduce transportation,
warehousing, and inventory management costs, thereby increasing
profitability and competitiveness.

2 Improved Service Quality

Good logistics management ensures on-time delivery, minimizes
damage, and increases customer satisfaction.

3 Enhanced Competitiveness
Businesses with an efficient logistics system can quickly meet market
demands and adapt to changes in the supply chain.
2.3. Basic Contents of
Logistics Management
2.3.1. Concept of Logistics Management

Concept of Management Concept of Logistics

Management is the process of planning, organizing, Logistics is the planning, organization, coordination, and
leading, and controlling the activities of the members execution of connecting spatial and temporal dimensions
within an organization and utilizing all other organizational within a system. The objective of logistics is to meet
resources to achieve the set objectives. customer demand in a timely manner, with the right
quality and at a reasonable cost.
2.3.1. Concept of Logistics Management
Logistics Management is the process of planning,
organizing, controlling and monitoring the activities
related to the management of the flow of goods, services
and information from the point of origin to the final
point of consumption in order to ensure the efficiency
and effectiveness of the supply chain.
2.3.2. Functions of Logistics Management
The main functions of logistics management include:
2.4. Logistics Service System
The logistics service system has many different system components. The core logistics services such as order processing,
storage, and transportation are directly supported by logistics information services and additional services necessary for
the logistics process.
Components in the Logistics Service System
Components of the Logistics Service
System
Logistics Information Services 1
Includes information and communication
technology systems that support supply chain
management, cargo tracking, and optimization 2 Logistical Core Services
of logistics processes. Services such as order processing, storage, and
cargo transportation, which are the fundamental
and essential activities in the logistics chain.
Additional Logistics Services 3
Includes supporting services such as packaging,
delivery, insurance, customs, etc. to complete
and optimize the provision of logistics services.
A. Logistical Core Services
Core logistics services such as order processing, storage, and freight
transportation are fundamental and essential activities in the supply chain.
These services provide the foundation for an efficient logistics system to
operate.
Order Processing

1 Order Data Management 2 Payment Process

Process and track order information from receipt to Includes invoicing, payment collection, and effective
delivery completion, ensuring accuracy and management of payment transactions.
transparency.

3 Shipment Tracking 4 Feedback Information Processing

Monitor the transportation and delivery process to Receive and process customer feedback, which
ensure goods reach customers on time. serves as a basis for improving service quality.
Warehouse include Transshipment
Warehouse Management
When goods are produced or imported, they need to be stored in warehouses before being distributed to
1 customers. The warehouse management system (WMS) plays a crucial role in organizing, arranging, and
preserving the goods.

Space Optimization
2 Modern storage systems not only save space, but also optimize the time for searching and processing goods.

Classification and Arrangement

3 Goods are classified and arranged according to criteria such as product type, storage time, and priority
level.

Supporting Technologies
4 In some cases, technologies such as robots and automated storage and retrieval systems (AS/RS) are applied
to improve efficiency.

Risk Reduction
5 Effective storage management ensures that goods are always ready when needed and minimizes the risk of
shortages or damage.
Warehouse Operations Process
Warehouse Operations Process
Receiving 1
Receive and inspect incoming goods to ensure
accurate quality and quantity.

2 Put away
Classify and arrange goods in optimal storage
locations based on their characteristics and
Picking 3 usage frequency.
Locate and retrieve the correct items according
to order requirements, ensuring accuracy and
efficiency. 4 Packing
Pack goods safely, attractively, and appropriately
for each product type.
Inventory 5
Monitor and update inventory status to forecast
demand and make timely replenishment
adjustments. 6 Kitting
Assemble related products into complete
product kits to meet special customer
requirements.
Transport service include Transshipment
Transportation Modes Transportation Management
There are various transportation modes, including Transportation Management Systems (TMS) help track
road, rail, sea, and air. The choice of mode depends on routes, optimize routes, and ensure on-time delivery at
distance, delivery time, and type of goods. reasonable cost.

Supporting Technologies Coordination

Technologies help track and monitor transportation in Transportation requires close coordination between
real-time, minimizing risks of lost or damaged goods the manufacturer, transportation service providers,
during transit. and customers.
B. Logistics
Information Services
Logistics information services create and use data about
goods transported within the system. This data includes
important information such as the shipper, receiver, type
of goods, order number, quantity, weight, and volume.

Logistics information is the key to planning, tracking, and

monitoring the provision of actual logistics services.
Logistics operations based on data are closely related to
core services such as transportation, warehousing, and
order processing.
Benefits of Implementing a Logistics
Information System

Reduced Operational Costs

Visibility and Tracking
Smart Automation
Efficient Delivery Orchestration

Improved Delivery Tracking & Management

Improve Customer Experience
Lack of NDR Standardization
4-Level Model of a Logistics Information
System
4-Level Model of a Logistics Information
System
The logistics information system consists of 4 main levels: Operational Level, Tactical Level, Strategic Level, and
Control Level. Each level plays an important role in effectively managing and operating logistics activities.

The Operational Level includes activities such as order registration, order processing, inventory planning, warehousing
and distribution, transportation, and delivery. These are the daily tasks that need to be performed to maintain a seamless
and timely logistics operation.

The Tactical Level involves issues such as inventory management, facility planning, channel integration, vehicle routing
and scheduling, as well as outsourcing services. These tasks help optimize operational efficiency in the short and medium
term.

The Strategic Level includes capacity and capability planning, alliances and collaborations, as well as system
customization to meet long-term business objectives.

The Control Level focuses on monitoring and evaluating the performance of the system, including customer service,
system productivity, cost control, and effective asset utilization.
Logistics Management System Workflow
Logistics Management System Workflow
Order Placement 1
Customers place orders, generating information
about products, quantities, and delivery times.

2 Planning
The logistics management system plans the
order processing, including scheduling
transportation, arranging goods, and allocating
Execution 3 resources.
Activities such as receiving goods, inspecting,
warehousing, packaging, and transportation are
carried out to fulfill the order.
4 Monitoring
The system tracks the order processing, updates
the status, and provides information to the
Evaluation 5 customers.
Based on KPIs like delivery time, cost, and
customer satisfaction, the system's effectiveness
is evaluated.
C. Additional Services in Logistics

1 2 3

Information Services Advertising Services Flexibility

Additional information services Additional services such as Additional services can be provided
such as data analysis and reporting promotions and advertising can be at different locations, not just at the
can be integrated into the core provided at various points along the point of delivery, but also at the
logistics process, providing valuable supply chain, optimizing the contractor's or third-party's
information for marketing effectiveness of customer reach. premises, increasing flexibility and
purposes. efficiency in the transportation
process.
2.5. Classification of Logistics
Logistics is an important field in supply chain management. There are many
ways to classify logistics, including by form, process, and type of goods.
A. Logistics Activities Classification by
Service Level
First Party Logistics (1PL)
Self-organization Dedicated resources Direct management
The business owner organizes and Using the company's own Directly managing and operating
carries out logistics activities. transportation, warehousing, the entire logistics process.
information systems, and
personnel.
Advantages and Disadvantages of 1PL
Advantages
High Proactivity: The owner of the goods can independently provide Logistics at any time.
Tight Control: The enterprise has tight control over the transportation process and service quality.
Long-term Cost Reduction: For large enterprises, investing in Logistics infrastructure can reduce long-term
costs compared to outsourcing.

Disadvantages
High Initial Investment: Investing in infrastructure, transportation, and human resources requires a large initial
investment.
Management and Operation Capability: For enterprises without sufficient scale, experience, expertise, and
quality of human resources, the 1PL model will create many difficulties, reduce efficiency, increase risks, and be
quite costly.

Limited Scope: Small enterprises have limited transportation scope and cannot expand to a large or
international scale like other Logistics models.

Who is it suitable for?

The 1PL model is more suitable for large enterprises with large transportation needs and strong financial
capabilities, as they can invest in infrastructure and manage logistics effectively. However, this model is not optimal
for small enterprises, due to the high initial investment and limited transportation scope, making it difficult for
them to expand or compete with external logistics services.
Second-Party Logistics (2PL)
1 Provision of 2 Not Integrated 3 Flexible
Individual Services The services provided are not Businesses can choose the
The second party provides yet integrated into a system. necessary services from various
individual logistics services different providers.
such as transportation,
warehousing, customs
procedures, etc.
Advantages and Disadvantages of 2PL
Advantages Disadvantages
Reduced initial investment: Businesses do not need Dependence on providers: Loss of direct control
to invest in logistics infrastructure and and risk of service quality issues.
transportation equipment. High service costs: Outsourcing costs may
Access to professional services: 2PL providers increase, especially for large shipping volumes.
have experience and ensure quality transportation. Limited scalability: Not suitable for large-scale or
Optimized transportation process: Providers have international logistics expansion needs.
a wide network, helping to reduce costs and Lack of supply chain integration: Only addresses
optimize routes. transportation, other aspects still need to be self-
High flexibility: Businesses can choose different managed.
service providers for various transportation needs.

Who is it suitable for?

The 2PL model is a reasonable choice for businesses that want to reduce initial investment and leverage the
expertise of transportation providers. This model is particularly suitable for businesses with medium-sized
transportation needs, but not optimal for large-scale logistics operations or those requiring comprehensive supply
chain management.
Some 2PL Providers

ALS (Aviation Logistics Service)

Saigon Newport Corporation - SNP ALS specializes in providing air transportation and
warehousing services for the aviation industry. The
SNP is one of the leading companies providing
company has an extensive network at major airports in
maritime transportation, warehousing, and logistics
Vietnam and focuses on air cargo transportation.
services in Vietnam. The company focuses on
transportation and storage of goods, especially in
seaport areas.

Vinafco
Vinafco provides transportation, warehousing
Viettel Post management, and goods distribution services for
Viettel Post is a major logistics company specializing in various industries. The company specializes in
freight delivery, providing road transportation and transporting goods for multiple sectors, including
delivery services for domestic customers. manufacturing, retail, and consumer goods.
Third-Party Logistics (3PL)
1 Comprehensive 2 Diverse Services 3 Integrated System
Management Handles import/export Integrates with the customer's
Manages the execution of procedures, freight system, providing higher
logistics services for each transportation, combined efficiency.
functional department on circulation, inventory storage,
behalf of the business owner. and information processing.
Advantages and Disadvantages of 3PL
Advantages Disadvantages
Optimize logistics processes: Professional Loss of direct control: Dependent on the provider
providers manage all logistics activities. for logistics operations.
Cost savings: No need to invest in logistics Service costs: Can be high, especially for complex
infrastructure or personnel. services.
High expertise: Utilize expertise and wide networks Quality risks: Quality depends on the provider,
to improve efficiency. which can impact service.
Flexible scalability: Services can be easily adjusted Complex relationship management: Requires close
to business needs. coordination with the provider.
Data security: Risk of information security when
sharing with a third party.

Who is it suitable for?

The 3PL model is a reasonable choice for businesses that want to optimize their logistics processes and leverage the
deep expertise of logistics service providers. This model is particularly suitable for businesses with large or
international transportation needs.
Some 3PL Providers

Gemadept Logistics
Gemadept offers 3PL services with an extensive
DHL Express
warehousing network and a robust transportation
DHL is one of the world's largest logistics service
system. Gemadept provides logistics solutions for
providers, offering 3PL services in Vietnam. DHL
various industries, including automotive, consumer
provides comprehensive supply chain management
goods, and manufacturing.
solutions, including transportation, warehousing, order
processing, and inventory management.

Transimex Kuehne + Nagel

Transimex provides 3PL services with integrated Kuehne+Nagel is headquartered in Switzerland and has
supply chain solutions. The company offers a global presence. The company provides supply chain
transportation, warehousing, and order management solutions for various sectors, including air, sea, and
services for both domestic and international
road transportation.
businesses.
Dropshipping - A New Shipping Method
No Need to Manage Inventory Expanded Product Catalog
In the Dropshipping model, the seller does not have to With the Dropshipping model, sellers can expand their
manage, store or ship the goods themselves. Instead, product catalog without additional investment. This
the Dropshipping service provider will handle these increases business opportunities and attracts more
tasks. customers.

1 2 3

Reduced Investment Costs

Businesses do not need to spend money on purchasing
inventory, building warehouses or hiring employees.
This significantly reduces the operating costs.
Dropshipping
Dropshipping vs. Third-Party Logistics (3PL)

1 2

Dropshipping Third-Party Logistics (3PL)

Retailers do not stock inventory. Instead, they transfer Comprehensive logistics services including
orders directly to the manufacturer or supplier, who is transportation, warehousing, order processing, etc. The
responsible for shipping. 3PL provider will manage the entire process on behalf of
the customer.
Dropshipping vs. Third-Party Logistics (3PL)
Criteria Dropshipping Third-Party Logistics (3PL)

Inventory Management No need to store inventory, Sellers own the inventory, but the
suppliers hold and manage the warehouse and management are
inventory. handled by 3PL.

Initial Cost Lower, as no investment is required Higher cost due to the need to
in warehousing and inventory. invest in inventory and 3PL service
fees.

Process Control Lower control, as the supplier is Higher control, can customize and
responsible from production to manage the quality of the delivery
delivery. service.

Delivery Speed Depends on the supplier and their Faster delivery speed as the goods
location, often slower as the goods are stored domestically or in
may be shipped from overseas. warehouses closer to the customers.

Product Quality Cannot be directly controlled, Can control the product quality
depends on the supplier. before delivery.
Fourth Party Logistics (4PL)
Comprehensive Design and Operation Comprehensive
Integration Management
Design, build, and operate a
As an integrator: consolidating, complete Logistics chain. Responsible for managing the
connecting the resources, potential, logistics flow, providing solutions,
and scientific and technical facilities planning, logistics consulting, and
of its own with other organizations. transportation management.
Manage the entire logistics process.
Advantages and Disadvantages of 4PL
Advantages Disadvantages
Comprehensive Management: Integrates the entire Loss of Direct Control: Complete dependence on
supply chain, helping to optimize logistics. the provider.
Resource Savings: Businesses can focus on core High Costs: Service costs may be high due to
activities without having to manage logistics. complexity.
High Expertise: Ensures efficiency with the Quality Risks: Service quality depends on the
provider's advanced expertise and technology. provider.
Flexible Scalability: Easy to adjust the scale of Single Partner Dependence: High risk if there are
logistics according to needs. issues with the provider.

Difficulty in Partner Selection: Need to choose a

suitable and reliable provider.

Who is it suitable for?

The 4PL model is a reasonable choice for businesses that want to outsource the entire logistics process and leverage
the comprehensive management of the service provider. This model is particularly suitable for businesses with
complex supply chains and seeking integrated solutions from multiple resources, but not suitable for businesses
that want to maintain direct and detailed control over logistics activities.
Some 4PL Providers

Toll Global Logistics

Toll Group is one of the world's leading logistics service
providers and offers 4PL services in Vietnam. Toll can
manage and coordinate various logistics suppliers to
CEVA Logistics create an optimal supply chain for customers.
CEVA Logistics provides 4PL logistics services to
customers who need to manage and integrate the entire
supply chain. CEVA operates as a global supply chain
manager, helping to optimize all logistics activities.

GEFCO
GEFCO is a renowned 4PL company, specializing in
providing integrated logistics services for complex
supply chains, particularly in the automotive industry DHL Supply Chain & Global Forwarding
and other manufacturing sectors.
DHL is not only a 3PL company but also provides 4PL
services. DHL has the capability to manage and
integrate the entire supply chain for large customers,
from suppliers and manufacturing to distribution.
Fifth-Party Logistics (5PL)
1 New Model 2 Advanced Technology 3 Comprehensive
5PL is an advanced logistics Utilizing information Management
service model. It focuses on technology and data, 5PL 5PL providers have the
optimizing the entire supply efficiently manages logistics capability to comprehensively
chain, from raw material operations, optimizing manage the supply chain,
procurement to final customer transportation cycles, including selecting other
delivery. warehousing, and order logistics service providers for
processing. transportation, warehousing,
order fulfillment, etc.
Advantages and Disadvantages of 5PL
Advantages Disadvantages
Integrated supply chain management: Dependence on technology: Requires a complex
Comprehensive management of multiple resources technology system and the ability to manage large
and suppliers, leading to optimization across the amounts of data.
entire chain. High costs: The complex services and high-tech
Cost optimization: Use of advanced technologies integration can lead to higher costs.
and data analysis to optimize logistics processes Loss of control: Businesses become fully dependent
and reduce costs. on the 5PL provider to manage the supply chain.
High scalability: Suitable for businesses with large- Security risks: Sharing data with multiple third
scale, complex, or cross-border transportation parties can increase the risk of information leaks.
needs.
Requires appropriate scale: Not suitable for small
High automation: Application of advanced businesses with simple logistics needs.
technologies like artificial intelligence and process
automation to improve efficiency.
Multi-supplier management: Ability to coordinate
and manage multiple different logistics suppliers
within a single system.

Who is it suitable for?

The 5PL model is a reasonable choice for businesses that want to automate their entire supply chain and integrate
digital logistics solutions through service providers. This model is particularly suitable for large-scale e-commerce
businesses that need to manage global supply chains with strong technological support. However, it is not suitable
for businesses that want to manually control every step of logistics or are not ready to invest in advanced technology
solutions.
6PL - A New Stride in Supply Chain
Management
AI-Driven Management Advanced Automation
AI plays a central role in 6PL, supporting decision- Automation in 6PL goes beyond automating routine
making. By analyzing real-time data, AI predicts tasks. It is integrated into the decision-making process,
demand, detects disruptions, and optimizes the supply such as automatically triggering production when
chain. inventory reaches a threshold.

Seamless Integration Predictive and Prescriptive Analytics

6PL connects and communicates with all components 6PL provides forecasts and prescriptive solutions, such
in the supply chain, from raw material sourcing to final as predicting market trends and recommending
delivery. inventory adjustments.

Customizable and Flexible Solutions Sustainable and Responsible

6PL has the capability to be customized and scaled, 6PL emphasizes sustainability and environmental
allowing businesses to adapt the model to their specific responsibility, such as optimizing delivery routes and
needs. minimizing fuel consumption.
B. Types of Logistics by Process
Inbound Logistics Reverse Logistics
The process of transporting, storing, and controlling The process of recovering, recycling, or disposing of
raw materials from suppliers to the business. The goal used products. The aim is to optimize value and/or
is to ensure a ready supply to meet production needs. ensure safe and environmentally responsible handling.

1 2 3

Outbound Logistics
The process of transporting, storing, and controlling
finished products from the business to the customer.
The purpose is to meet customer needs in a timely and
efficient manner.
Inbound Logistics

Inbound Supply Time Management Cost Optimization

The process of procuring, Closely managing and controlling the Managing and optimizing the costs
transporting, and storing input location and timing of inbound associated with the inbound logistics
resources and raw materials to meet material deliveries to ensure a ready process, such as transportation,
production needs. This includes and timely supply for the production storage, inventory control, etc. The
finding, negotiating with, and process. goal is to minimize costs across the
managing suppliers. supply chain.
Outbound Logistics
Objectives Ensure products are delivered to customers quickly, in the right quantities, and at the right
time to effectively meet their needs.

Location Track and manage the location of products during transportation, ensuring products are
Management delivered to the correct customer address.

Time Develop detailed transportation plans, forecast demand and delivery times to ensure products
Management are delivered within the customer's required timeframe.

Cost Management Optimize transportation, storage, and delivery costs to minimize distribution expenses and
meet the company's profit objectives.
Reverse Logistics
1 Reclamation 2 Reuse 3 Recycling
Reclaiming by-products, waste Processing and reusing used Recycling recyclable materials
materials, and elements that products. to minimize environmental
impact the environment. impact.

4 Environmental Protection
Contributing to environmental protection through effective waste management.
C. Classification of Logistics Activities by
Commodity

FMCG Logistics Automotive Logistics Specialized Logistics

Logistics for fast-moving consumer Automotive industry logistics: serves Includes logistics for the chemical,
goods: serves for consumer goods for the manufacturing and electronics, and oil and gas industries,
with short shelf life. distribution of automobiles. meeting the specific needs of each
sector.
D. Classification of Logistics Activities by
Scope of Operations

Humanitarian Logistics Business Logistics Military Logistics

Humanitarian logistics focuses on Business logistics serves production Military logistics ensures the supply of
providing relief goods and services to and commercial activities, including weapons, food, fuel, and other
victims of natural disasters, wars, inventory management, necessary materials for the armed
diseases, and other emergencies. transportation, order processing, and forces during wartime or training
related services. operations.
D. Classification of Logistics Activities by
Scope of Operations

Logistics and Circular Community-based Sustainable Food Logistics

Economy Logistics Sustainable food logistics focuses on
The circular economy focuses on Community-based logistics focuses on ensuring a safe, quality, and
reusing and recycling resources. supporting the activities of the local sustainable food supply by optimizing
Circular economy logistics supports community, such as providing food, the supply chain, minimizing waste,
these activities by optimizing the healthcare, education, and other and protecting the environment.
supply chain to minimize waste and essential services.
maximize efficiency.
E. Classification of Logistics Activities by
Position in the Supply Chain
Purchasing Logistics Distribution Logistics
Manage activities related to the procurement of raw Manage activities related to the distribution,
materials, components, and goods from suppliers until transportation, and delivery of products to the final
they are introduced into the production process. customers.

1 2 3

Production Logistics
Manage activities such as production planning, storage
arrangement, and transportation of products between
production stages.
a. Purchasing Logistics
Supply Management Transportation & Delivery
Purchasing logistics involves managing and organizing Activities such as transportation planning, warehouse
the processes related to the supply of necessary input management, order processing, and delivery are
factors for the production and business operations of carried out to ensure that input factors are supplied in a
the enterprise. timely and efficient manner.

Negotiation & Contracting

Purchasing activities are carried out through contracts and market orientation, requiring negotiation skills and
management of relationships with suppliers.
a. Purchasing Logistics
b. Production Logistics

1 Effective Production 2 Integrated Supply 3 Improved Production

Process Management Chain Efficiency
Production logistics plays a Production logistics connects By optimally managing
crucial role in production the activities before and after material flow, internal
planning, material flow control, production, such as raw transportation processes, and
warehouse management, and material procurement and ensuring adequate inventory,
internal transportation. These product distribution. This helps production logistics contributes
activities ensure continuous optimize the flow of the entire to increased productivity,
production, minimize supply chain, from source to reduced waste, and improved
inventory, and reduce costs. customer. product quality.
b. Production Logistics
c. Distribution Logistics

1 Process Coordination 2 Supply Chain Connection

Distribution logistics involves coordinating Distribution logistics creates interaction between
processes such as transportation and storage to activities in the Logistics system to distribute the
deliver goods to the end consumer. company's goods to customers.

3 Delivery Optimization 4 Enhance Customer Experience

Through optimal management of transportation and Distribution logistics plays a crucial role in
storage processes, distribution logistics helps ensure improving the customer experience by delivering
timely and efficient delivery to consumers. goods on time, to the right location, and in good
condition.
c. Distribution Logistics
2.6. Trends in the
Development of the
Logistics Service System
Green Logistics and Sustainable Development
Focusing on minimizing environmental impact through the use of
electric vehicles, route optimization, and waste reduction.

Urban Logistics
Developing efficient transportation and distribution solutions in densely
populated urban environments, utilizing small distribution centers and
flexible delivery vehicles.

Digitalization in Logistics
Digitalization helps automate processes, enhance transparency, improve
tracking and data analysis, allowing businesses to optimize operational
efficiency and reduce costs.
Chapter 2 Summary

1 1. Historical Development 2 2. Concepts & Content

Logistics has gone through many stages of Logistics is a broad field, including many concepts
development, from small-scale to globalization. and functions.

3 3. Services & Classification 4 4. Development Trends

The logistics service system is diverse, meeting the Logistics is transforming with the development of
diverse needs of enterprises. technology and market demand.