Logistics Support Management

= Chapter 1 =

Introduction
Historically, the role of logisticians in military and industrial operations has been regarded as being of secondary importance, concerned mainly with the task of handling and transporting supplies. To-day, however, such an over-simplified concept no longer holds true. In the present state-of-the-art, logistics manage¬ment has evolved into a multi-disciplined responsibility as challenging as that of the primary objectives being supported by it. Due to the complexity of contemporary operational requirements, economic feasibility of many large-scale projects is often determined by the relative cost factor of logistics alone. Consequently, the increased importance of logistic support to many organizations has resulted in the logistician being elevated to either mid level or higher echelon management status. Whereas a military commander may be primarily concerned with maintaining a strong defense posture, his industrial counterpart is engaged in the pursuit of planning and managing profitable business contracts and projects. The logistician, meanwhile, has the task of methodically applying his expertise to the development of a parametric framework, within which either military objectives or industrial projects may be accomplished with a maximum of expediency. To do this successfully, the logistician requires a broad understanding of operational goals and detailed information pertaining to the environmental conditions under which such projects or objectives are to be carried out.

On the basis of such knowledge, along with proper utilization of available resources, the logistics input should then become a smooth flow of effort and expertise synchronous with the mainstream endeavor of primary objective attainment. Much of the logistician's work involves communication and coordination with managerial counterparts from other sections within his organization and with equivalent level contacts outside the organization. By maintaining a harmonious working relationship with internal colleagues and external contacts he should be capable of coordinating the support capabilities of the latter to meet the logistics requirements of the former. Thus, in order to operate effectively the logistician must have extensive experience in manage¬ment operations and be skilled in the art of coordination. Since a detailed analysis of logistics would exceed the scope of this writing, the intent herein is limited to a review of basic management principles applicable to the administra¬tion of logistic support activities. As such, the comments and opinions expressed in this presentation are intended for informative rather than for instructive purposes.

Definition of Management
Good management is a pre-requisite for any type of enterprise, whether it be a large industrial plant, a one-man business or a government agency. The same rule applies equally to logistic support activities which in most cases, consist of several peripheral functions, performed sequentially or simultaneously, in support of a common objective. Just what constitutes good management depends upon one's definition of management itself. Numerous experts in the field of business administration have explained their respective theories, describing management as a science, an art and a profession. To varying degrees, all three are applicable, depending upon the particular aspect of management one happens to be concerned with. Labor union executives, for example, traditionally view management as an inflexible adversary to be confronted periodically across the bargaining table. In the military, management is generally considered synonymous with the chain of command. From a collegiate viewpoint however, the term may simply denote one of several academic disciplines to be studied. Whereas to a logistician management may be construed as a systematic process whereby the various functions under his jurisdiction are not only well coordinated with each other, but also simultaneously in phase with the planned schedules of the project they support and in compliance with the requirements of primary objectives. Regardless of the variety and relative validity of these and other definitions, there is little to be gained from an in-depth study of what management really is. More to the point perhaps, is a discussion of what management does and how it goes about doing it.

Functions of Management
The purpose of management is to ensure the attainment of specific objectives by the organization for which it is responsible. There are many contributory factors affecting the attainment of corporate objectives. These include matters exclusively within the control of management, affairs entirely beyond the jurisdiction of management, plus other areas of concern involving external interests and those of management. Thus, management must concern itself not only with the smooth running of internal affairs but must remain alert to possible side effects and pressures of external interests. At this point the reader may be tempted to ask if there is really any difference between logistic support management and any other form of management. The answer to this is that unlike conventional business management, wherein established patterns and prescribed rules and regulations are the norm, the management of logistics involves a fairly constant effort to cope with known, unknown and often unpredictable variables. Since many of these variables are subject to change in nature, magnitude and frequency, efficient operational management under such conditions can become quite difficult and sometimes very frustrating. This is especially true when the variables to be contended with, such as labor disputes, climatic conditions, sources of supply, civic strife, budgetary limitations, cultural differences, language barriers, theft and sabotage are beyond the effective control of the logistics support manager. Learning to recognize the degree of adversity he can cope with, without compromising his effectiveness, is the hallmark of an experienced logistician. To be effective, any form of management including that of logistics, must concern itself with four primary functions, namely:

1. PLANNING

2. ORGANIZING

3. DIRECTING

4. CONTROLLING

These four primary functions and their inter-relationship are reviewed in the following pages, to provide a basic understanding of the many tasks performed by management and the various means employed for their accomplishment.

= Chapter 2 =

The Planning Function
On the surface, planning may appear to be a function primarily concerned with some future time frame or anticipated requirement This is true in many respects, but prudence demands that any planning for the future must be founded upon a thorough analysis of factual information derived from an accurate assessment of projected requirements, based on the realities of contemporary conditions and technology, plus the invaluable lessons of past experience and historical data. From the foregoing it will be apparent that the planning function must be keyed to certain ground rules in order to promote effectiveness in the formulation, implementation and subsequent outcome of plans. Therefore, to avoid confusion and to ensure continuity, the planning function should precede the other three functions in the normal sequence of operations.

Prior to the inception of any organization, a valid purpose must be conceived to justify its creation, and this purpose evolves into specific objectives, for the attainment of which, the establishment of a formai organization becomes necessary. Since the type and size of the organization must be meticulously planned in accordance with the stated obiActives, the importance of specificity in regard to the objectives should not be underestimated

The Principle of the Objective states that before initiating any course of of action, the objective in view must be clearly determined, understood and stated.* * Henry L Sisk, *PrtIciples of Management% S.W. Publishing Co., 1969 p.132_

Thus, the planning function in its early stages, plays an important role in the actual conception of organizational objectives, in the drafting of proposed procedures to ensure their attainment, and in the development of the required organizational structure. A common practice of management is to appoint a planning committee comprising representatives of various departments within an organization. By this means, the individual requirements, capabilities and authority of each section can be evaluated to determine the extent of their respective involvement and responsibilities.

Logistics Planning
During the planning stage of a project, the logistician should maintain close coordination with the project planning committee. Drawing from his knowledge of a given area, current sources of contact and updated research, the logistics manager should be able to provide the planning committee with guidelines and pertinent data covering the known and anticipated conditions within the project area. The availability and proper use of such information may avoid possible errors in the plan formulation process and minimize potential delays or obstacles after the plan goes into effect. For planning purposes the logistics report of the project area should summarize those factors that may be conducive to or that may detract from successful implementation and timely accomplishment of project objectives. This is particularly important for plans involving international operations on a large scale, such as civil engineering construction contracts, military and economic aid programs, offshore oil exploration and agricultural development projects. Because of their inherent dynamism, such operations may appear to conflict with the relatively passive nature and antiquated bureaucracy of certain host countries. Typical factors to be considered for the formulation of a logistic support plan should include but not be restricted to the following parameters:

a) Restrictions: Business licenses or operating permits required. Government agencies having jurisdiction or private interests exercising influence over the proposed project area or the nature of operations envisaged. Local ordinances or legislation covering environmental disturbances

b) Climatic conditions: Extremely high or low temperatures, heavy rainfall, thick fog, strong winds, high humidity, sandstorms or rough seas. Such conditions may affect the number of available work days during a given period. They may also require special protection for personnel, sensitive instruments or materials and equipment In addition they may pose safety hazards and cause delays in transportation.

c) Local facilities: Availability of on-site transportation, communications, sources of water, power, consumable supplies and hardware. Allowances should be made for the possible need and cost of shipping from home base or else¬where, if not locally available.

d) Personnel support Housing, hotels, eating facilities, food supplies, purity of water, schools, medical services, recreation and entertainment. In remote areas the need may arise to build a residential camp complete with power plant, sanitary facilities, access roads and security.

e) Local economy: Pay rates of skilled and unskilled labor. Fees, duties and/or taxes imposed on project operations or on equipment and supplies brought into the area. Certain foreign countries and states offer liberal tax exempt¬ions and waiver of fees as inducements to projects considered to be benefic¬ial to the development of the national or local economy.

f) Political stability: This factor is not regarded quite as meaningful in the USA as it might be in some overseas areas where a sudden change of regime, insurgent attacks or civic strife may pose a threat to the safety of project personnel and continuity of operations_ For this reason it is wise to anticipate the possible need for protection of personnel and equipment. In rare cases, provision may have to be made for emergency evacuation of personnel

g) Productivity: Allowances should be made on foreign projects for possible differences in the rate of individual work accomplishment compared with that of home-base standards_ Closer supervision may be required to monitor productivity and quality of workmanship. National and religious holidays may tend to reduce the available number of work days or add to overtime costs.

In some countries, when third parties such as local government officials or pros¬pective sub-contractors become involved, negotiations often turn into bargaining sessions resulting in a long drawn out stand-off until the third party is assured of adequate personal gain. For ethical reasons it is advisable for project personnel to be cognizant of local or national customs, restrictions and practices, based either on religious or moral convictions, so as to minimize the possibility of transgression upon the cultural domain of the area by persons not familiar with it Mistakes of this kind, however unintentional, can sometimes cause considerable embarrassment and may even result in project activities and personnel being subjected to hostile acts.

Planning Characteristics
Most planning is usually subject to some degree of risk and, due to changing conditions often beyond the control of the organization, risk factors may reappear in one form or another. This contingency must be carefully evaluated and allowed for. Careful logistics planning in itself is not likely to eliminate the element of risk, but the magnitude of risk and its potential for disruption may be minimized by the inclusion of suitable characteristics within the plan. This concept is best illustrated by the Principle of Planning, wherein the relationship between planning and plans is indicated.

Principle of Planning: Effective planning results in plans that are objective, structured, and flexible, and the extent to which resultant plans possess these characteristics is a measure of their probable success. Selection of the most appropriate characteristics for the purpose of establishing criteria by which effective planning may be judged usually falls within the purview of top echelon managenent. In this task, all factors should be considered in terms of their respective applicability to the desired criteria The following list of characteristics provides sufficient scope for total inclusion or discreet selectivity as may be desired:

1. Objectivity.

2. Logical soundness.

3. Futurity.

4. Flexibility.

5. Stability.

6. Comprehensiveness.

7. Clarity.

8. Simplicity

From the preceding list three characteristics may be singled out as primary factors worthy of more detailed discussion, namely, logical soundness, flexibility and comprehensiveness.

Logical Soundness
During the formulation process all aspects of a plan should be subjected to critical evaluation. At this stage the foremost consideration is that of feasibility, since the scope of a plan should never be allowed to exceed the capabilities of an organization. Originality should always be tempered with realism and likewise, idealism must stand the test of feasibility. In any planning effort the probability of success must be weighed against the consequences of possible failure.


 * Ibid., p. 85. ** R. C_ Davis, The Fundamentals of Top Management", (New York: Harper &amp; Bros., Publishers, 1951), p.46.

This is especially important for those plans involving the commitment of extensive resources, i.e., manpower, material, money and time. Past and present risk factors should be analyzed for significant trends. Thus, when the element of existing risk has been evaluated, the nature and extent of anticipated risk may be allowed for with a reasonable degree of assurance. Long range plans are more susceptible to the element of risk due to the unreliability of long range risk forecasting. This detracts from their soundness and renders them subject to failure. Apart from the possible loss of resources, due to faulty planning or adverse risk factors, an equally important factor is that of economic effectiveness. This has been defined as the maximum of return relative to the extent of resources expended, or, more simply stated, the efficient utilization of available resources. Time and motion studies and in-depth cost analyses have shown that there are practical limitations to the proportional relationship between resources input, on the one hand, and resultant productivity, on the other hand. On a hypothetical scale, the ratio of unit output to unit input increases very slowly with each additional unit of input until an optimum balance range is reached. Within this range, the output to input ratio rises sharply until it reaches a peak of maximum efficiency. From here onwards further unit input only results in diminishing return. It is therefore advisable to delineate the acceptable upper and lower limits Of an optimum balance range to establish guidelines for economic effectiveness in planning. In short, the characteristic of logical soundness implies feasibility, risk awareness and economic effectiveness.

This especially important for those plans involving the commitment of extensive resources, i.e., manpower, material, money and time. Past and present risk factors should be analyzed for significant trends. Thus, when the element of existing risk has been evaluated, the nature and extent of anticipated risk may be allowed for with a reasonable degree of assurance. Long range plans are more susceptible to the element of risk due to the unreliability of long range risk forecasting. This detracts from their soundness and renders them subject to failure. Apart from the possible loss of resources, due to faulty planning or adverse risk factors, an equally important factor is that of economic effectiveness. This has been defined as the maximum of return relative to the extent of resources expended, or, more simply stated, the efficient utilization of available resources. Time and motion studies and in-depth cost analyses have shown that there are practical limitations to the proportional relationship between resources input, on the one hand, and resultant productivity, on the other hand. On a hypothetical scale, the ratio of unit output to unit input increases very slowly with each additional unit of input until an optimum balance range is reached. Within this range, the output to input ratio rises sharply until it reaches a peak of maximum efficiency. From here onwards further unit input only results in diminishing return. It is therefore advisable to delineate the acceptable upper and lower limits Of an optimum balance range to establish guidelines for economic effectiveness in planning. In short, the characteristic of logical soundness implies feasibility, risk awareness and economic effectiveness.

Flexibility
In logistics planning a certain amount of stability is highly desirable and should indeed be provided for but it should not be the predominating criterion. As mentioned earlier, logistic support activities usually involve and often have to contend with so many variables that without adequate flexibility a plan would soon stagnate. Any plan that is so rigidly structured as to preclude possible adjustment in order to cope with changing conditions is subject to failure. Factors to be considered in providing for flexibility include the following:

1. Primary Objective: The intent, purpose, scope and desired functional achievement

2. Planned Approach: Short or long range plan, major risk factors known or anticipated, available safeguards, total cost estimates of implementation. Proposed starting and estimated completion dates. Sequential phasing, capabilities and resources needed (available within the organization or from external sources).

To allow for a suitable range of alternatives, the minimum and maximum acceptable limits for each of these items should be determined along with corresponding cost factors and their resultant impact on the overall plan. Use of this technique should provide a basis for determining optimum performance parameters plus a range of somewhat less desirable but still acceptable alternatives that can be resorted to should this become necessary. When sequential phasing is used, both actual costs and corresponding achievements for each phase should be computed and incorporated within the overall plan as mile¬stones. By this means the logistics manager can monitor effectiveness more reliably, both prior to implementation and throughout the life-cycle of the plan.

One aspect of logistics planning often overlooked is that of the cost of unsched¬uled interruption or premature termination once a plan has been put into effect. Unscheduled interruption may be caused by weather conditions, labor disputes or shortage of materials, among many other factors. The extent of loss in logistic support capability and its ultimate effect upon the project itself, caused by such interruption, and the subsequent effort required to regain momentum following resumption of operations, will be inversely proportional to the degree of flexibility built into the plan during the formulation process. Through the use of phase-cost accounting procedures the logistics manager can readily decide upon the most suitable milestone at which a scheduled interrupt¬ion may be feasible, with a minimum of resultant loss. Such an interruption may become necessary for re-evaluation or re-orientation in favor of more effective or less costly alternatives. Since sources of finance for projects are limited and operational time frames tend to be restrictive, the factors most susceptible to adjustment are usually man-power, materials and methods, wherein a fairly broad range of alternate approaches can be found. Again it must be emphasized, that without prior inclusion of and sufficient provision for suitable alternatives, there will be inadequate flexibility. In this case, a re-evaluation would probably indicate that the only alternative is premature termination followed by the development and adoption of a totally new plan. To recapitulate, the characteristic of flexibility provides for definition of performance parameters, use of milestones and phase-cost accounting, plus the inclusion of suitable alternatives.

Comprehensiveness
Plans that are vague, indefinite or uncoordinated become self-defeating through lack of comprehensiveness. The prescribed courses of action or policy must be clearly stated and not left to guesswork Every aspect must be thoroughly analyzed for specificity and completeness within itself, its relationship to and compatibility with all other aspects, and finally, its effective contribution from a logistics standpoint, towards objective fulfillment. A pre-requisite of comprehensiveness in logistic support planning is that plans should specify exactly what is to be done, how and when it is to be done, which section is responsible for doing it, and how the activities of interfacing sections relate to each other. Not only does this put the planned activities into proper per¬spective but also allows for better coordination of the sections concerned. By defining specific areas of responsibility and corresponding inter-relationships, potentially weak links and possible oversights can be detected on a timely basis. If not discovered during the formulation process the subsequent disruptive effects of weak links and oversights in logistics planning can be quite costly once plans have already been implemented.

To summarize, the characteristic of comprehensiveness relates to specificity, completeness, compatibility, the ascertainment of responsibility and effective coordination.

Summary of Principles
From the preceding review of the planning function a re-statement of key features is warranted in order to emphasize this important aspect of logistics management.

1. The Principle of the Objective - involving identification and clear understanding of the objective in view.

2. The Element of Risk - requiring awareness of and precautionary measures to be taken for the element of risk involved.

3. The Principle of Planning - outlining essential characteristics of plans to promote success:

a) Logical Soundness.

b) Flexibility.

c) Comprehensiveness.