Unit 5: Logistics Systems
BSS 310 Engineering Management 2025
Lecturer: Prof. Michael Ayomoh
1
Quick Recap/Questions arising from
Previous Lecture
The lecture addressed:
the basics of a production system from an applicative point of
view; its significance in the design and development process
of systems; Pull vs. Push production systems; Mass, Batch,
Continuous and intermittent production systems; Some vital
processes in a production system and finally, a production
system contextualised in terms of the semester project with
rudimentary tips on how to address selected sections of the
project rubric.
Learning Outcomes for the Current
Lecture
At the end of this lecture you should:
Understand the basic theories about logistics as applied to
business systems; be able to deploy the principles,
characteristics and operations of a logistic system to the
semester project. Finally, be familiar with the interfacing
behaviour of a logistic system with other systems and sub-
systems up until the end of their life cycle.
Presentation Outline
Definition of Logistics Systems
Principles of Logistics Management
Some Characteristics of Logistics Systems
Operations of Logistics Systems
Logistics Systems Interfaced with other Systems/Sub-systems
Definition of Logistics
Logistics is often defined as that part of a system’s operations that
focuses on planning, implementation and controls for efficient,
effective forward and reverse flow and storage of goods, services,
and related information between the point of origin and the point of
consumption in order to meet customers’ requests.
Definition of Logistics Systems…Contd
Logistics is also defined as the art and science of obtaining and
distributing materials and products at the right location, quantity
and time.
Logistics is also referred to as the movement of materials along
the phases of a supply chain
Internal & External Logistics
Inbound logistics is concerned with purchases and inflow
movement of materials, parts, and/or finished inventory from
suppliers to manufacturing or assembly plants and warehouses.
Outbound logistics is concerned with the storage and
movement of final products and/or information flow from the end
of the production line to the end user.
Principles of Logistics Management
The seven R’s of Logistics Systems include:
Right Product
Right Quantity
Right Condition
Right Place
Right Time
Right Customer
Right Price
Principles of Logistics Management
Some Characteristics of a Logistics
Systems
Respond Rapidly
Control Inventory Variance
Monitor Inventory Expenses
Consolidate Shipments
Sustain Products Quality
Supports Products Life Cycle
Conduct Reverse Logistics
Operations of Logistics Systems
1,2,3,4,5 & 6th PL
1st Party Logistics
The 1st party logistics is often associated with a firm that has its
own cargo, freight and can transport goods and merchandise
from one point to another.
1st Party Logistics
2nd Party Logistics
A 2nd party logistics involves transportation of goods from one
end of a supply chain to a destination of need using rails, road,
sea and/or air. They include the asset-based carriers using ships
of own lease and airlines that they are contracted with. They are
mainly used for international transportation of heavy and
wholesale goods and for trading purpose as well.
2nd Party Logistics
2nd Party Logistics
2nd Party Logistics
3rd Party Logistics
The 3rd party logistics is primarily concerned with the
transportation and delivery of different products but also includes
various types of additional services as well. The functions of the
3PL include warehousing, terminal operations, customs
brokerage, supply chain management, logistics IT software
products and analysis services, for tracking and tracing the
delivery status of different products amongst others. They
specialize in domestic and offshore warehousing.
3rd Party Logistics
3rd Party Logistics
3rd Party Logistics
1st,2nd & 3rd Party Logistics Facilitation
4th Party Logistics
The 4th party logistics is a relatively new concept in business
systems logistics. Usually, it involves employing an overseer
referred to as a Logistic Service Provider to aid with the
management of an entire supply chain of a company.
4th Party Logistics
4th Party Logistics
4th Party Logistics
5th Party Logistics
The 5th party logistics providers are known as logistics
aggregators. They aggregate the demands of the 3PL and others
into bulk volume for getting better rates with different types of
airlines and shipping companies. This type of logistics is not
asset based. It usually works seamlessly across all disciplines.
5th Party Logistics
5th Party Logistics
5th Party Logistics
6th Party Logistics
6th Party Logistics
Summary Sheet 1st to 6th Party Logistic System
Forward and Reverse Logistics
Logistics Systems Interfaced with a whole
System, Production and Marketing Systems
Logistic System Interfaced with the entire System
Logistics and Production System Interfaced
Logistics-Production Interface
How does each of these scenarios affect the logistics decision factors?
Longer production runs (e.g. 1 000 units at a time instead of 20) to reduce
setup costs. A possible make to stock policy (a Push systems).
Just-In-Time production systems (Pull systems)
Choosing to use licensed instead of open source software for service
development
Location of production processes
Logistics activities in a production process
Logistics, Production & Post Production Operations
Logistics-Marketing Interface
How does each of these scenarios affect the logistics decision
factors?
A half-price sale promotion for retail goods
A bulk price discount offered to customers
Free overnight door-to-door delivery for online purchases
Returns policies and warranty periods
On-time delivery promises
Logistics activities in a production process
For further reading: Sections covered in
the e-book include:
System Engineering Management, Fifth Edition, Benjamin S.
Blanchard & John E. Blyler,
o Chapter 1 sections 1.4, 1.4.3 and 1.4.4
o Chapter 3 section 3.4.8
Additional resources were randomly sourced from:
Systems Engineering Principles and Practice, Second Edition; Author:
Alexander Kossiakoff et al. Chapter 15 section 15.3
https://www.shopify.co.za/encyclopedia/logistics
https://ithinklogistics.com/blog/types-of-logistics-its-difference/
https://www.linkedin.com/pulse/decoding-logistics-providers-unveiling-
differences/
The End
Next lecture
• Unit 6: Marketing and customer service
