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The Oxford Dictionary defines logistics as the detailed coordination of a large and complex operation and traces its origin to the 19th century and French word logistique. American Heritage Dictionary links it to the branch of military operations dealing with the procurement, distribution, maintenance and replacement of materials and personnel. Dictionaries may have found the word's origin only in the 19th century, but the greatest logisticians of all times go long back in history. Like, Alexander the Great of Macedonia, who perfected army logistics bequeathed to him by his father Philip II for rapid movement of troops and outflanking enemy armies. Arguably, the most innovative logistician among all emperors and kings from the hoary past was Genghis Khan who underwrote food supply for his marauding soldiers as they went on conquering mainland Asia, the Middle East and parts of Europe by giving each four horses, fish hooks and plenty of arrows. Legend has it that Genghis Khan as part of his food supply logistics allowed soldiers to kill some horses as an emergency food source. Some centuries later, Carl von Clausewitz, Prussian military theorist and author of the modern military classic On War, perfected army logistics in a way as to get the better of Napoleon in the battle of Waterloo.
But why dilate on war logistics when we are to be on business logistics? Logisticians see a convergence point between war and business in that the two are about engagements between human groups to seek dominance. For millennia, mankind has been engaged in armed conflicts leading to progressive perfection of war logistics coming into play in military engagements in Afghanistan, Iraq and Libya. In contrast, large business organisations seeking domination within their countries and across continents are less than a three-century-old phenomenon. So, by the time business started becoming increasingly competitive and benchmark costs progressively stringent, managements could turn to war logistics for ideas on efficient procurement and supply of raw materials and on-time delivery of finished products. The germinal point of contemporary business logistics, including the much-in-use 'just in time' system, is, therefore, war logistics.
According to a local business logistician, wars since the Second World War have been fought infrequently allowing strategists long lead time to bring logistics in alignment with breakthroughs in military hardware and transportation. Borrowing from how UPS, the world's leading logistics company, sees business logistics, it has to be a seamless multimodal transport operation improving supply chain management all the time. More and more companies have found in logistics the differentiator between "success and failures, between a competitive advantage and a competitive threat". UPS, which invests over $1 billion in technology and owns one of the world's largest aircraft fleets, describes logistics as the "art and science" of getting things to destinations efficiently, allowing breakthroughs in new markets and seeing customers happy while cutting costs for businesses through the entire supply chain. The business universe is at a point where logistics has become highly relevant for all, irrespective of size, location and market coverage. UPS describes the phenomenon as 'logistics for all'.
Chairman of Steel Authority of India Limited (SAIL) Chandra Shekhar Verma, says, "Yes, all businesses need logistical support. But logistics doesn't come in a single format. Providers of logistics services will have to have a clear understanding of what kind of logistical support the user business needs and then have it tailor-made. Like, in our integrated steelmaking at SAIL, we are required to organise ingress of millions of tonnes of raw materials, including iron ore from our owned mines and coking coal from foreign sources and egress of steel using multimodal transport adequately supported by information technology." Seeing much scope for efficiency improvement in the movement of raw materials and finished steel products and thus leading to cost savings, Verma thought much could be achieved for SAIL by having a board level director simultaneously overseeing raw materials movement and logistics. Verma says SAIL's exit from Transchart, the chartering arm of the shipping ministry, requiring of all PSUs to seek vessels from it for imports, will allow it to bring into play logistics in supporting end-to-end solutions from hiring of ships to delivery of imported coal to its plants. Domestic supply being limited, SAIL is required to annually import up to 12 million tonnes (mt) of coking coal using about 200 vessels. According to Verma, logistics could yield optimum results provided infrastructure like road, rail and sea port is well developed. Expect a much stronger supporting infrastructure by the 12th plan period end, says SAIL chairman.
An organisation of the size and complexity of SAIL has reasons to do logistics in-house. But, for a majority of enterprises, logistics, including transportation, are non-core activities which are necessarily assigned to third party logistics services providers. Balmer Lawrie Chairman Virendra Sinha sees considerable potential for his company in growing its vibrant logistics business profitably. As the company already has three state-of-the-art container freight stations at Navi Mumbai, Chennai and Kolkata, Sinha is in the process of building a multi-modal logistics park at Vizag in partnership with Vizag Port Trust and one in West Bengal. Sinha must be hoping that by the time the latter facility is up, West Bengal's economic activities will have revived.
