1.1 Introduction

When we talk of the supply chain, we refer to the network of processes, resources and enterprises that provides for the supply of goods from raw materials through processing and production to the end consumer. Logistics is concerned with the organization, coordination and control of the flow of goods through the supply chain. Most enterprises are concerned with managing both their in-bound and out-bound supply chains. The former comprise the flow of raw materials, components and products, which they purchase to manufacture and supply products to their customers and to support their business operations. The latter is the flow of their products from source through a distribution system to their end customers (Figure 1.1). The control and organization of the flow of goods in the in-bound supply chain is the concern of in-bound logistics and includes the procurement activity; the control and organization of the flow of goods within the company is the concern of internal logistics, the control and organization of the flow of goods in the out-bound supply chain is the concern of out-bound logistics.

Figure 1.1: The supply chain

In this book, we shall be concerned primarily with the out-bound supply chain and out-bound logistics; however, for companies trading business to business (that is to say not trading directly with end consumers), their out-bound supply chain is a part of their customer's in-bound supply chain and vice versa.

The out-bound supply chain and its associated logistics, or product distribution system, is concerned...