The Impact of Academic Research on Industrial Performance (2003) / Chapter Skim
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5. Report of the Panel on the Transportation, Distribution, and Logistics Services Industry
5. Report of the Panel on the Transportation, Distribution, and Logistics Services Industry
Pages 145-172
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From page 145... ...
In manufacturing, reducing inventories and work-in-process through just-in-time deliveries, "pull" systems of supply-chain management, and other technologies and management practices depend on integrated-logistics services, which combine materials management and physical distribution. Logistics has emerged as a distinct function in many companies and as a distinct service performed by integratedlogistics service providers.
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From page 146... ...
As a percentage of gross domestic product (GDP) , transportation and inventory costs have been declining since 1981, when total logistics costs in the United States, including inventory carrying costs, transportation, and administrative costs, totaled almost 17 percent of GDP.
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From page 147... ...
The logistics value chain has three major elements: · the supply chain (the physical components, including manufacturing plants, warehouses, vehicles, and transportation infrastructure) · logistics business practices (practices and processes associated with the flow of goods, information, and payments through supply chains)
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From page 148... ...
Technology Drivers Technological, organizational, and contextual changes have significantly influenced performance in integrated-logistics services in the past 10 to 15 years. Significant technological innovations have been focused on applications of information technology: hardware that automatically captures data, satellite tracking systems, and navigation systems information systems, such as manufacturing resource planning and ERP software, electronic data interchange between firms in the value chain, and database management software decision technology
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From page 149... ...
The modules address the following functions: · production planning (performs capacity planning and creates a daily production schedule for a company's manufacturing plants) · materials management (controls purchasing of the raw materials needed to build products and manages inventory stocks)
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From page 150... ...
Most frequently cited benefits of outsourcing logistics services include (Logistics Best Practices Group, 1997~: · lower costs · the ability to focus on core businesses · greater flexibility · improved expertise/marketing knowledge · improved customer service The third-party provider industry has grown significantly in size and scope in the past decade. Revenues grew from $10 billion in 1992 to $56.4 billion in 2000 and were projected to grow 15 percent annually through 2003 (Delaney and
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From page 151... ...
The Internet is providing a medium for accelerating and increasing the extent of these changes. In business-to-business electronic commerce, the Internet could lead to even tighter integration of supply chains, and all of the logistics software companies are making their products Internet enabled.
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From page 152... ...
Relevant research has also been conducted at national laboratories and transportation centers associated with state departments of transportation. The academic disciplines involved in research on integrated logistics include applied mathematics, computer science and engineering, industrial engineering, operations research, software engineering, materials science, social and behavioral sciences (human factors)
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From page 153... ...
Most transportation research centers focus almost exclusively on the movement of people; only a few (e.g., Logistics Institute at the Georgia Institute of Technology, the Center for Transportation Studies at the Massachusetts Institute of Technology [MIT] , Stanford University's Global Supply Chain Management Forum, and Princeton University's Computational and Stochastic Transportation Logistics Engineering [CASTLE]
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From page 154... ...
In addition to research, university transportation research centers also provide executive courses, seminars, and symposia to inform industry of state-ofthe-art academic research and new logistics technologies and to inform faculty members of the real problems in industries. For example, affiliate companies of the MIT Center for Transportation Studies come to MIT seven or eight times a year to review the status of academic research.
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From page 155... ...
Software for routing, production scheduling, and distribution management are examples of high
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From page 156... ...
Presentations at conferences with extensive industry participation, such as the conferences sponsored by the major operations-research/logisticsmanagement professional societies (e.g., Institute for Operations Research and Management Science, the Council on Logistics Management, the International Society of Logistics) , and other organizations are also an important vector for communicating academic research results to industry.
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From page 157... ...
Programs like MIT' s Corporate Affiliates Program and Georgia Tech's Leaders in Logistics are reasonably good avenues of knowledge transfer because they provide for continuity of participation and a long-term learning process for faculty as well as industry. The panel believes that many faculty members focus on solving nonexistent problems, not because they are poor researchers, but because they do not understand the real-world problems faced by industry.
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From page 158... ...
Georgia Tech's Logistics Institute, MIT's Center for Transportation Studies,
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From page 159... ...
Based on the accumulated knowledge, problem-solving skills, and expertise of professors and students, the software is tailored to solve a customer's problems. Considering the success of many of these start-up companies, the impact on industry of academic research commercialized in this manner has been substantial.
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From page 160... ...
Some UTC focus areas are listed below: · intelligent transportation systems · advanced technologies in transportation operations and management · advanced infrastructure and transportation · advanced transportation simulation · advanced transportation technology
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From page 161... ...
Impediments Although the contribution of academic research to the emergence of sophisticated integrated logistics management and optimization tools has been significant, and the resulting decreases in operating costs and improvements in efficiency have been high, very little public or private funding is available for fundamental research in logistics. A critical mass of funding tends to be concentrated in academic logistics institutes where member companies help to define and then participate in research projects.
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From page 162... ...
However, academic research on logistics and technologies has had a moderate impact on the transportation, distribution, and logistics industry overall. Except for the involvement of member companies in academic logisticsresearch institutes, no institutionalized methods of technology transfer from universities to the TDL industry have been established.
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From page 163... ...
Industries that have been most influenced by academic research are airlines, manufacturers that operate private truck fleets, less-than-truckload and truckload motor carriers, and software companies. Without a strong tie to industry, academic research tends to be disconnected to the needs of industry.
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From page 164... ...
Research important to industry requires researchers who understand the industry and the subtleties of the problems industry faces. The experience of company-supported logistics institutes has demonstrated the importance of having a critical mass of academic researchers who thoroughly understand both the problems industry faces and the academic methodologies needed to solve them.
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From page 165... ...
MIT's Center for Transportation Research, Georgia Tech's Logistics Institute, Stanford's Global Supply Chain Management Forum, and Princeton's CASTLE Laboratory have shown that they can improve the transfer of information between academia and industry. Historically, these four centers have accounted for most industry-related logistics research in academia; all four rely on industry participation and funding.
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From page 166... ...
1996. A Comparison of the Use of Third-Party Logistics Services by Large American Manufacturers, 1991, 1994, 1995, and 1996.
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From page 167... ...
IMPACT OF ACADEMIC RESEARCH ON INDUSTRIAL PERFORMANCE 1. Briefly describe research carried out in your university that has had an impact on integrated chain logistics within the transportation, distribution, and logistics services (TDL)
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From page 168... ...
8. What is your estimate of total annual research dollars spent at your institution on academic research related to the TDLS industry?
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From page 169... ...
Christopher Caplice, Senior Consultant, The Sabre Group Virginia Carmon, Senior Manager, KPMG Peat Marwick LLP Bernard Hale, Senior Vice President Customer Support, DSC Logistics Thomas Sanderson, President, Sabre Decision Technologies Jay Mabe, Associate Partner, Andersen Consulting John Coyle, Kimberly Clark Corporation NAE Panel Members: H Donald Ratliff, Regents Professor and UPS Professor of Logistics and Director, Logistics Institute, Georgia Institute of Technology
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From page 170... ...
Don Ratliff (Georgia Institute of Technology) and Professor Cynthia Barnhart (Massachusetts Institute of Technology)
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From page 171... ...
Bixby, Professor, Department of Computational and Applied Mathematics, Rice University NAE Program Office Staff: Proctor Reid, Associate Director Diane Alberts, NAE J Herbert Holloman Fellow Nathan Kahl, Project Assistant
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