Design, Management and Control of Logistic Distribution Systems

Nowadays global and extended markets have to process and manage increasingly differentiated products, with shorter life cycles, low volumes and reducing customer delivery times. Moreover several managers frequently have to find effective answers to one of the following very critical questions: in which kind of facility plant and in which country is it most profitable to manufacture and/or to store a specific mix of products? What transportation modes best serve customer points of demand, which can be located worldwide? Which is the best storage capacity of a warehousing system or a distribution center (DC)? Which is the most suitable safety stock level for each item of a company’s product mix? Consequently logistics is assuming more and more importance and influence in strategic and operational decisions of managers of modern companies operating worldwide. The Council of Logistics Management defines logistics as “the part of supply chain process that plans, implements and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customers’ requirements”. Supply Chain Management (SCM) can be defined as “the integration of key business processes from end-user through original suppliers, that provides product, service, and information that add value for customers and other stakeholders” (Lambert et al., 1998). In accordance with these definitions and with the previously introduced variable and critical operating context, Figure 1 illustrates a significant conceptual framework of SCM proposed by Cooper et al. (1997) and discussed by Lambert et al. (1998). Supply chain business processes are integrated with functional entities and management components that are common elements across all supply chains (SCs) and determine how they are managed and structured. Not only back-end and its traditional stand-alone modelling is addressed, but the front-end beyond the factory door is also addressed through information sharing among suppliers, supplier’s suppliers, customers, and customers’ customers. In the modern competitive business environment the effective integration and optimization of the planning, design, management and control activities in SCs are one of the most critical issues facing managers of industrial and service companies, which have to operate in strongly changing operating conditions, where flexibility, i.e. the ability to rapidly adapt to changes occurring in the system environment, is the most important strategic issue affecting the company success. As a consequence the focus of SCM is on improving external integration known as “channel integration” (Vokurka & Lummus, 2000), and the main goal is the optimization of the whole chain, not via the sum of individual efficiency maximums, but maximising the entire system thanks to a balanced distribution of the risks between all the actors. The modelling activity of production and logistic systems is a very important research area and material flows are the main critical bottleneck of the whole chain performance. For this reason in the last decade the great development of research studies on SCM has found that new, effective supporting decisions models and techniques are required. In particular a large amount of literature studies (Sule 2001, Manzini et al. 2006, Manzini et al. 2007a, b, Gebennini et al. 2007) deal with facility management and facility location (FL) decisions, e.g. the identification of the best locations for a pool of different logistic facilities (suppliers, production plants and distribution centers) with consequent minimization of global investment, production and distribution costs. FL and demand allocation models and methods object of this chapter are strongly associated with the effective management and control of global multi-echelon production and distribution networks.A few studies propose operatio...