Chapter 2.

Overview of
Logistics
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
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, and medical resources to the battlefields contributed
to the success of military campaigns.

Formalization of the Concept

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 Modern 3 Just-In-Time (JIT) Model
Containerization Transportation
The Japanese Just-In-Time (JIT)
Containers helped standardize The advancement of modern model emerged, focusing on
packaging and transportation of transportation modes like minimizing inventory and
goods, reducing costs and transit container ships and cargo planes optimizing the supply process.
time. 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 managing and The main objective of logistics is to ensure Logistics includes various activities such as
optimizing the processes related to the the right product, the right quantity, the transportation, warehousing, packaging, order
movement and storage of goods, right quality, at the right location, at the processing, inventory management, and
services, or information from the point of right time and with the most reasonable customer service.
origin to the final destination. cost.
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
2 Stage 2: Logistics Systems (1980s
efficiently, 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,
Management (21st Century) warehousing, inventory management, and
In the new era, logistics has become a critical order processing.
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 & Global

Connectivity Optimization Data Connectivity
Logistics has become The goal is to create a ERP, WMS, TMS, Big Logistics must meet the
an indispensable part of flexible, efficient, and Data, AI, and IoT play a need for global
supply chain responsive supply chain crucial role in connectivity, with the
management, that can quickly adapt optimizing logistics movement of goods
connecting all stages to market changes. operations and supply across multiple
from suppliers to the chain management. countries and regions.
final customers.
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, leading, Logistics is the planning, organization, coordination, and
and controlling the activities of the members within an execution of connecting spatial and temporal dimensions
organization and utilizing all other organizational resources within a system. The objective of logistics is to meet
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 2 Logistical Core Services
optimization of logistics processes. Services such as order processing, storage,
and cargo transportation, which are the
fundamental and essential activities in the
Additional Logistics Services 3 logistics chain.
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 Includes invoicing, payment collection, and
receipt to delivery completion, ensuring effective management of payment
accuracy and transparency. transactions.

3 Shipment Tracking 4 Feedback Information Processing

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

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

Classification and Arrangement

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

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

Risk Reduction
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 usage frequency.
Picking 3
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, Transportation Management Systems (TMS)
including road, rail, sea, and air. The choice of help track routes, optimize routes, and ensure
mode depends on distance, delivery time, and on-time delivery at reasonable cost.
type of goods.

Supporting Technologies Coordination

Technologies help track and monitor Transportation requires close coordination
transportation in real-time, minimizing risks of between the manufacturer, transportation
lost or damaged goods during transit. service providers, 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,
Execution 3 arranging goods, and allocating 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

Information Services Advertising Services Flexibility

Additional information services Additional services such as Additional services can be
such as data analysis and promotions and advertising provided at different locations,
reporting can be integrated can be provided at various not just at the point of
into the core logistics process, points along the supply chain, delivery, but also at the
providing valuable information optimizing the effectiveness of contractor's or third-party's
for marketing purposes. customer reach. premises, increasing flexibility
and 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 carries out Using the company's own transportation, Directly managing and operating the entire
logistics activities. warehousing, information systems, and personnel. logistics process.
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

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 Individual Services 2 Not Integrated 3 Flexible
The second party provides individual logistics The services provided are not yet integrated Businesses can choose the necessary services
services such as transportation, warehousing, into a system. from various different providers.
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 transportation and risk of service quality issues.
• equipment.
Access to professional services: 2PL providers • High service costs: Outsourcing costs may increase,
have experience and ensure quality transportation. especially for large shipping volumes.
• Optimized transportation process: Providers have • Limited scalability: Not suitable for large-scale or
a wide network, helping to reduce costs and optimize international logistics expansion needs.
• routes.
High flexibility: Businesses can choose different • Lack of supply chain integration: Only addresses
service providers for various transportation needs. transportation, other aspects still need to be self-
managed.

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)

ALS specializes in providing air transportation and warehousing services for the
aviation industry. The company has an extensive network at major airports in Vietnam
and focuses on air cargo transportation.

Saigon Newport Corporation - SNP

SNP is one of the leading companies providing maritime transportation, warehousing,
and logistics services in Vietnam. The company focuses on transportation and storage
of goods, especially in seaport areas.

Vinafco
Vinafco provides transportation, warehousing management, and goods distribution
services for various industries. The company specializes in transporting goods for

Viettel Post multiple sectors, including manufacturing, retail, and consumer goods.

Viettel Post is a major logistics company specializing in freight delivery, providing

Third-Party Logistics (3PL)
1 Comprehensive Management 2 Diverse Services 3 Integrated System
Manages the execution of logistics services for Handles import/export procedures, freight Integrates with the customer's system, providing
each functional department on behalf of the transportation, combined circulation, inventory higher efficiency.
business owner. storage, and information processing.
Advantages and Disadvantages of 3PL
Advantages Disadvantages
• Optimize logistics processes: Professional • Loss of direct control: Dependent on the
providers manage all logistics activities. provider for logistics operations.
• Cost savings: No need to invest in logistics • Service costs: Can be high, especially for complex services
infrastructure or personnel. • Quality risks: Quality depends on the provider,
• High expertise: Utilize expertise and wide which can impact service.
networks to improve efficiency. • Complex relationship management: Requires
• Flexible scalability: Services can be easily close coordination with the provider.
adjusted to business needs. • 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

DHL Express Gemadept offers 3PL services with an extensive warehousing

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

Transimex Kuehne + Nagel

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

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)

Dropshipping Third-Party Logistics (3PL)

Retailers do not stock inventory. Instead, they Comprehensive logistics services including
transfer orders directly to the manufacturer or transportation, warehousing, order processing,
supplier, who is responsible for shipping. etc. The 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, suppliers Sellers own the inventory, but the
hold and manage the inventory. warehouse and management are
handled by 3PL.
Initial Cost Lower, as no investment is required in Higher cost due to the need to invest in
warehousing and inventory. inventory and 3PL service fees.

Process Control Lower control, as the supplier is Higher control, can customize and
responsible from production to delivery. manage the quality of the delivery
service.
Delivery Speed Depends on the supplier and their Faster delivery speed as the goods are
location, often slower as the goods may stored domestically or in warehouses
be shipped from overseas. closer to the customers.

Product Quality Cannot be directly controlled, depends Can control the product quality before
on the supplier. delivery.
Fourth Party Logistics (4PL)
Comprehensive Integration Design and Operation Comprehensive Management

As an integrator: consolidating, connecting the Design, build, and operate a complete Logistics chain. Responsible for managing the logistics flow, providing
resources, potential, and scientific and technical solutions, planning, logistics consulting, and
facilities 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 the provider.
supply chain, helping to optimize logistics. • High Costs: Service costs may be high due to complexity.
• Resource Savings: Businesses can focus on core • Quality Risks: Service quality depends on the provider.
activities without having to manage logistics.
• Single Partner Dependence: High risk if there are
• High Expertise: Ensures efficiency with the issues with the provider.
provider's advanced expertise and technology.
• Difficulty in Partner Selection: Need to choose a
• Flexible Scalability: Easy to adjust the scale of suitable and reliable provider.
logistics according to needs.

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 create an optimal supply
chain for customers.

CEVA Logistics
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 and other manufacturing
sectors. DHL Supply Chain & Global Forwarding

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 Management
5PL is an advanced logistics service model. It Utilizing information technology and data, 5PL 5PL providers have the capability to
focuses on optimizing the entire supply chain, efficiently manages logistics operations, comprehensively manage the supply chain,
from raw material procurement to final customer optimizing transportation cycles, warehousing, including selecting other logistics service
delivery. and order processing. providers for transportation, warehousing, order
fulfillment, etc.
Advantages and Disadvantages of 5PL
Advantages Disadvantages
• Integrated supply chain management: Comprehensive • Dependence on technology: Requires a complex
management of multiple resources and suppliers, leading to technology system and the ability to manage large amounts
optimization across the entire chain. • of data.
High costs: The complex services and high-tech integration
• Cost optimization: Use of advanced technologies and data can lead to higher costs.
analysis to optimize logistics processes and reduce costs. • Loss of control: Businesses become fully dependent on the
• High scalability: Suitable for businesses with large-scale, 5PL provider to manage the supply chain.
complex, or cross-border transportation needs. • Security risks: Sharing data with multiple third parties can
• High automation: Application of advanced technologies like increase the risk of information leaks.
artificial intelligence and process automation to improve • Requires appropriate scale: Not suitable for small
• efficiency.
Multi-supplier management: Ability to coordinate and businesses with simple logistics needs.
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-making. By analyzing Automation in 6PL goes beyond automating routine tasks. It is integrated
real-time data, AI predicts demand, detects disruptions, and optimizes the into the decision-making process, such as automatically triggering
supply chain. production when inventory reaches a threshold.

Seamless Integration Predictive and Prescriptive Analytics

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

Customizable and Flexible Solutions Sustainable and Responsible

6PL has the capability to be customized and scaled, allowing businesses to 6PL emphasizes sustainability and environmental responsibility, such as
adapt the model to their specific needs. optimizing delivery routes and 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 used products. The aim is to optimize value and/or
goal is to ensure a ready supply to meet production ensure safe and environmentally responsible
needs. 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, transporting, and Closely managing and controlling the location Managing and optimizing the costs
storing input resources and raw materials to and timing of inbound material deliveries to associated with the inbound logistics process,
meet production needs. This includes finding, ensure a ready and timely supply for the such as transportation, storage, inventory
negotiating with, and managing suppliers. production process. control, etc. The goal is to minimize costs
across the 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 Management Track and manage the location of products during transportation, ensuring products are delivered to the correct customer address.

Time Management Develop detailed transportation plans, forecast demand and delivery times to ensure products 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 products. Recycling recyclable materials to
materials, and elements that impact minimize environmental impact.
the environment.

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 Automotive industry logistics: Includes logistics for the
consumer goods: serves for serves for the manufacturing and chemical, electronics, and oil and
consumer goods with short shelf distribution of automobiles. gas industries, meeting the
life. 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 Military logistics ensures the supply
providing relief goods and services production and commercial of weapons, food, fuel, and other
to victims of natural disasters, activities, including inventory necessary materials for the armed
wars, diseases, and other management, transportation, order forces during wartime or training
emergencies. processing, and related services. operations.
D. Classification of Logistics Activities by Scope of
Operations

Logistics and Circular Economy Community-based Logistics Sustainable Food Logistics

The circular economy focuses on reusing Community-based logistics focuses on Sustainable food logistics focuses on
and recycling resources. Circular supporting the activities of the local ensuring a safe, quality, and sustainable
economy logistics supports these community, such as providing food, food supply by optimizing the supply
activities by optimizing the supply chain healthcare, education, and other chain, minimizing waste, and protecting
to minimize waste and maximize essential services. the environment.
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 transportation, and delivery of products to the final
until 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 the Activities such as transportation planning, warehouse
processes related to the supply of necessary input factors for management, order processing, and delivery are carried out
the production and business operations of the enterprise. to ensure that input factors are supplied in a 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 2 Integrated Supply 3 Improved

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

1 Process Coordination 2 Supply Chain Connection

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

3 Delivery Optimization 4 Enhance Customer Experience

Through optimal management of Distribution logistics plays a crucial role in
transportation and storage processes, improving the customer experience by
distribution logistics helps ensure timely and delivering goods on time, to the right
efficient delivery to consumers. 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
development, from small-scale to concepts and functions.
globalization.

3 3. Services & Classification 4 4. Development Trends

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