Logistics systems engineering The systems concept

The systems concept

Module 1

Relationship to other modules

This is the first module which introduces the concepts of systems and the life cycle approach
which is required for the understanding of logistics engineering.

Outline of the module

• In this module the systems concept and life cycle approach will be discussed. Many
different references are available for the further study of systems. As the goal of this
course is not aimed at systems and systems engineering as such, the minimum theory
on systems required for the understanding of logistics engineering is covered.
• The need for logistics will be viewed from two perspectives, namely that of the system
supplier and that of the system user.
• It will be demonstrated that the need for logistics is influenced in a major way by the
drive for customer satisfaction.
• Finally an overview of the total integrated logistic support system will be provided.

Objectives the module

To
provide the systems and life cycle framework within which logistics engineering fits
in a way that
• defines the systems and life cycle concepts
• demonstrates logistics as part of any system
• motivates the need for logistics from a supplier as well as a customer perspective
• defines the integrated logistic support system
so that
the student can a have a clear understanding of the relationships that logistics
engineering has within systems and its influence on customer satisfaction through the
logistic management processes and the logistic elements.

Outcomes of this module

At the end of this module the student must be able to:

• define a system and the systems concept
• define and describe the life cycle approach
• describe the need for logistics from the supplier as well as the customer perspective
• define the logistic management processes and the logistic support elements

Study notes compiled by Dr PJ Pretorius Module 1 Page 1

Logistics systems engineering The systems concept

The systems concept

A system is a set of interrelated components working together and self-sufficiently at its level
towards some common objective over a period of time. The generic function of a system is
to process inputs into outputs through its components.

Systems consist of
• Structural components
• Operating components
• Flow components

The set of components of a system has the following properties:

• The properties and behaviour of each component of the set has an effect on the
properties and behaviour of the set as a whole
• The properties and behaviour of each component of the set depends upon the
properties and behaviour of at least one other component in the set
• Each possible subset of components has the two properties listed above; the
components cannot be divided into independent subsets

1.2 System characteristics

• Holism (or expansionism) where the focus is on the system rather than on its
components:
• Systems exist in a hierarchy (The system at one level may be the component
at another).
• A system exists in an environment and has inputs from and outputs to the
environment (Boundaries of the system).
• Systems exist in time (The life cycle or whole-life concept).

• Synthetic thinking which means the system is greater than the sum of its parts:
• The system has emergent properties i.e. properties that does not exist when
the parts exist in isolation e.g. when H2 and O2 interact to form H2O.
• Optimising individual components does not necessarily lead to an optimal
system meaning a system is constrained in its output by a single part.
• The system is subject to entropy because of the entropy of its individual parts
and relationships amongst them.

• Teleology is a doctrine preoccupied with systems that are goal seeking or purposeful:
• Each system consists of functions that work towards a common goal.
• The owners of the system have the sole right to determine the common goal.
• The system have choice and free will with regards to the approach (or strategy)
to follow in pursuit of the goal.
• The system is reliable and resilient, but can also adapt readily to environmental
changes.
• The system is aware of its deficiencies and can act normative.

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Logistics systems engineering The systems concept

1.3 Generic system outputs (System measurements)

• Ability (Desired output i.e. altering material, energy or information). In other words the
benefit that the system is to provide to its owner.
• Availability (Readiness when required for use)
• Affordability (Benefit derived is more than the cost of acquisition, operation and
support) without compromising safety (people, equipment and environment)

1.4 The system elements

Support planning
Facilities
The following elements are the basic l Hardware Supply support
constituents that comprise a system. l Software Support and test equipment
For each system, these elements are l Integrated logistic support Packaging and marking
Materials handling and storage
combined in a unique way with unique Transportation
interactions between them: Technical data
Manpower and personnel
Training and training aids
Computer support
1.5 The life cycle perspective

• Cradle to grave approach

• Large systems have typical life spans of 5-30 years
• Typical phases of the life cycle
• Requirement analysis - Customer/Market
• Conceptual design - Producer
• Preliminary system design
• Detail design and development
• Production and/or construction
• Operations and support - Customer
• Phase-out and disposal

This process is generic in nature and describes the sequence of phases how a system comes
into being, how it is operated and maintained, and eventually phased out. It defines the
different phases of the life cycle as well as the primary role players during the phases and is
also known as the customer to customer process.

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Logistics systems engineering The systems concept

1.6 Different perspectives on the life cycle

Production capability

Design Utilisation

Detail design Production

Conceptual Preliminary and
design System operations Phase-out
design development (Consumer use)

System support capability

Design and procurement Utilisation (consumer maintenance)
Product perspective

Detail design
Conceptual Preliminary Construction of Production operations
and Phase-out
design design physical plant (System operational use)
development

System support capability

Design and procurement Utilisation (consumer maintenance)
Production capability perspective

1.7 Systems engineering

• Systems engineering is a logical and systematic sequence of activities and decisions

transforming an operational need into a description of system performance parameters
and a preferred system configuration which satisfy the requirement
• The output of systems engineering is the system and lower level specifications
• Hall morphology of systems engineering consists of logic (steps), time (sequence) and
knowledge (disciplines).
• Systems engineering is a whole-life, whole-system approach to the creation of
complex man-made systems aimed at fulfilling specific needs (what, how well,
benefit/cost)

1.8 The necessity for logistics

• Suppliers viewpoint
• Being able to provide a total solution; satisfying the customer
System effectiveness (and thus customer satisfaction) is determined by the
combination of ability, availability and affordability. A well designed product with
poor support will result in a poor system. An average product with excellent
support and which is affordable in all aspects may provide better satisfaction.

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Logistics systems engineering The systems concept

• Source of income
From the suppliers point a view, a lot of income can be generated by selling
after sales service, maintenance and spare parts. In many industries logistics
is a major source of income for the organisation and can thus not be neglected.

• Customer viewpoint
• Capability (Ability) can be influenced by how good or bad maintenance is
performed, also whether the product is at the right time at the right place, along
with all its associated requirements e.g.. fuel, personnel, etc.
• Unavailability (Availability) is influenced twofold through reliability (MTBF) and
maintainability (MTTR); both inherent logistics characteristics of the design.
Both reliability and maintainability can be influenced internally and externally by
the support system. The extent of the unavailability is measured in terms of
time and cost of unavailability. Cost can be further divided into actual costs of
repairing the system to an operable state, and opportunity costs; money (or
lives) lost because of unavailability.
• Product, operation and support cost (Affordability) can be influenced in a major
way by logistics. In complex systems operations and support costs can
comprise of up to 70% of total cost of ownership.

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Logistics systems engineering The systems concept

1.9 Investigating the relationships between ability, availability and affordability

The supplier perspective The customer perspective

Benefits and costs

Life cycle cost Life cycle cost

♦ Research and development ♦ Purchase price

♦ Investments ♦ Operations cost
♦ Support cost
Benefit ♦ Production capability costs Benefit
♦ Product support costs
♦ Sales of products ♦ Tangible
♦ Sales of support ♦ Intangible
♦ Intangible

Life cycle cost profiles

The economics of life cycle benefits and costs

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Logistics systems engineering The systems concept

1.10 The nature of costs

• Total cost not always visible, especially that associated

with operations and support
• Can be compared with the “iceberg” effect
• Use correct categories and be careful of fixed and variable,
direct and indirect

1.11 The integrated logistic support system

• The logistic management processes

• Operations and maintenance management
• Procurement and supplier management
• Inventory management
• Facility management
• Supply and distribution management
• Personnel management
• Configuration (data) management
• The logistic support elements
• Support planning
• Supply support
• Test and support equipment
• Packaging, handling and storage and transportation
• Human resources and training
• Facilities
• Technical data
• Computer resources

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Logistics systems engineering The systems concept

• The logistic support elements are the visible parts of logistics and are required to
perform three major functions within the operational phase of the system namely:
• operational support
• preventive maintenance
• corrective maintenance
• Without management processes the logistic elements means nothing. Along with the
physical elements there must be management processes that will guide and control
the application of the logistic elements within the above mentioned three functions.

1.12 References

Blanchard, B.S. (1992). Logistics Engineering and Management (4th Ed). Upper Saddle River,
NJ: Prentice Hall. pp 1, 11-13, 22-23, 70-82, 249-251, 413.

Blanchard, B.S. (1998). Logistics Engineering and Management (5th Ed). Upper Saddle
River, NJ: Prentice Hall. pp 8-19, 32-34, 81-89, 267-269, 480.

Blanchard, B.S. & Fabrycky, W.J. (1990). Systems Engineering and Analysis (2nd Ed). Upper
Saddle River, NJ: Prentice Hall. pp 2-3, 17-19, 501-506, 523-526.

Blanchard, B.S. & Fabrycky, W.J. (1998). Systems Engineering and Analysis (3rd Ed). Upper
Saddle River, NJ: Prentice Hall. pp 2-3, 19-22, 557-565, 584-597.

Goldratt, E.M. (1990). The Haystack Syndrome. New York, NY: North River Press. pp11.

Kerzner, H. (1995). Project Management - A Systems Approach to Planning, Scheduling and

Controlling (5th Ed). New York, NY: Van Nostrand Reinhold. pp 88.

M'Pherson, P.K. (1980). Systems Engineering: An Approach to Whole System Design. The
Radio and Electronic Engineer. Vol 50, No 11/12. November/December 1980. pp 550.

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