Chapter 1 Introduction

1.1 Research Background

  Logistics originated in the higher development stage of scientific technology and social economy, stretching over many industries, involving various technical fields. So operating in standardization to achieve the best circulation order and social benefits is the key problem to solve in the development of logistics industry for each country. To my best knowledge, in the development of logistics industry in USA, Western Europe, Japan etc, logistics standardization is not a special and outstanding problem. There is no any special standard technical organization with name of “logistics” either. However, there is a different situation in China. With the rapidly development of logistics industry, logistics standardization lag behind a lot with serial problems need to be solved necessary and urgently. [1]

  Nowadays in China, the annual losses generated in the process of logistics are about 3000 billion yuan, which is the lack of standardization of logistics enterprises operation of the state.Wen-Ling Chen who comes from Policy Research Office of the State Council, the deputy director of Industry, pointed out that road transport to rail transport from the conversion of rail transport to air transport from the conversion of air transportation to marine transportation from the conversion, but also resulted in the standardization of their conversion. The United Nations released the latest survey: the share of China's logistics process is almost time for the entire process of logistics and production of about 90%.[2]

1.2 Research Objective

  The target of this research is to explore the effects of logistics standardization examined by previous studies on business logistics performance of enterprises under the rapid diversification logistics environment. To accomplish the purpose, this research conducted in the investigation and business logistics performance of enterprises through previous studies and verified these effects based on the analyzed research materials. In particular, this research focus on the multiple regression analysis of the relation among the degree of components of logistics standardization (e.g. transportation, package, storage, load and unload and logistics information), and business logistics performance.

1.3 Research Methodology

  This research used an experimental design to analyze the effects of china logistics standardization on the business logistics performance.

  The research method employed here is based on empirical data which collected through questionnaire surveys distributed to the people who working on the logistics company. The questionnaire had been developed in Korea originally, and then double-blind translated back into Chinese. In order to achieve comparability, the similarity of the meaning must be kept. According to the questionnaire, it analyses how the factors will influence on the business logistics performance.

  The validity and reliability of instruments for variables will be tested with SPSS 18.0 Based on the results; a multiple regression analysis for the testing hypothesis will be conducted.

  According to the review above, five major variables influence performance of package, transportation, storage, load and unload and logistics information.

1.4 Literature Review

1.4.1 The Definition of Logistics Standardization

  The standardization of logistics means to take the logistics as a big system, make the technology standard of the inner structure, mechanical instruments, special tools and so on, the working standard of package, storage, load and unload, transportation etc, and the logistics information standard which is seeing as the special character of current logistics; and then the standardizing system which is combined with nationwide and nations widely.[3]

1.4.2 The Significance of Logistics Standardization

 At present, the competitions among countries and enterprises appearance as the standardized become very important. As a part of economic trade and an important role in product quality arbitrate, standard own a special stage and function in economic trade activities. Most regional organizations and countries, especially the developed countries make every attempt to fight for the right to lead and speak in international standardization activities, and make every effort to change their national standard into international standard. As one important part of international standard, logistics standard gains more considerable concern among every country.[4] Therefore studying current logistics and standardization of logistics is helpful to find the ways and means to raise the level of standardization of logistics, and the international competition of the enterprises in China, which have the important immediate significance and theoretical price.

  With the increasing development of economic globalization, mass production, globalization, large circulation, large trade and the economic cycle in the pattern of gradually formed, there is an irreversible trend of the world economy with international practice the development of logistics synchronization. To this end, national logistics needs and international consensus standards would not undoubtedly run counter to international harmonization of standards. If we insist on, will eventually come out. In addition, the Logistics Standardization is a future-oriented work in the early development of logistics in all countries put the standardization work well and take preventive measures on the national logistics industry and the world's long-term development of the logistics industry will be of great practical significance and far-reaching historical significance.[5]

1.4.3 International Logistics Standardization Status

  With the internationalization of trade, standards are becoming increasingly international and open to the world. The basis of international standards to develop their own standards has become a WTO member countries request. The aims of logistics standardization through the development of standard sizes to realize the whole logistics system linking, improve logistics efficiency. Also logistics are two closely related system is the ISO[6] standard and the EAN.UCC.[7]

1.4.3.1 ISO

  ISO (International Organization for Standardization) is the world's largest developer and publisher of International Standards.ISO is a network of the national standards institutes of 163 countries, one member per country, with a Central Secretariat in Geneva, Switzerland, that coordinates the system. ISO is a non-governmental organization that forms a bridge between the public and private sectors. On the one hand, many of its member institutes are part of the governmental structure of their countries, or are mandated by their government. On the other hand, other members have their roots uniquely in the private sector, having been set up by national partnerships of industry associations. Therefore, ISO enables a consensus to be reached on solutions that meet both the requirements of business and the broader needs of society.[8]

  Currently, ISO / IEC consists of a number of Logistics Standardization Technical Committee is responsible for global logistics system of the revision of related standards have been developed more than 200 facilities and logistics, mode of operation and management, basic module, logistics and logo, data information the exchange of the relevant standard. The existing standards in the ISO system, and logistics-related standards about 2 000, of which 181 transport, packaging 42, flow 2, storage 93, distribution 53, information 1 605.[9]

1.4.3.2 EAN-UCC

  EAN is the management of inter outside North America for goods, transport, services, and location for the only valid codes and to promote its application in international organizations, is an international standardization of logistics information, engage in major international organizations, and the U.S. Uniform Code Council (UCC) in North America corresponds to the region and EAN organizations. The past two years, the two organizations to strengthen cooperation and reached EAN.UCC alliance to jointly manage and promote the EAN.UCC System, is intended to promote the worldwide standardization of logistics information.[10]

1.4.4 The current situation of standardization of logistics in developed countries

  As the information technology and e-commerce developed, electronic data, supply chain, the rapid development of the international logistics industry has entered a rapid development stage. The logistics systems standardization and standardization have become the advanced countries to improve logistics efficiency, effectiveness of an essential means to improve competitiveness relatively. EDI in the international container and on the basis of technological development, countries are beginning to terms of trade logistics, technical and equipment specifications, in particular, documents, management tools, legal environment, etc. to implement unified international standards, allowing domestic logistics and international logistics integrated with one standard.

1.4.4.1 USA

  United States, as a important member of the North Atlantic Treaty Organization to participate in the North Atlantic Treaty Organization of logistics standard-setting work, and work out the logistics structure, definitions, basic vocabulary, logistics and technical specifications of the multinational force maritime logistics, logistics information identification system standards. American National Standards Institute (ANSI) to actively promote the transportation logistics, supply chain, distribution, storage, EDI, import and export areas such as standardization. The United States and logistics-related criteria about 1 200 articles, of which  transport 91, packing 314, loading and unloading 8, circulation 33, storage 487, delivery 121, the information 123.[11] Participation in international standardization activities, the United States to actively join the ISO/TC104, ISO/TC122, ISO/TC154 management, business and industry documents and data elements and so forth.[12]

1.4.4.2 Canada

  Canada began to develop the current logistics industry in an early time and has built a whole system of standardization of logistics that including logistics wording, logistics basic infrastructure and equipments, logistics information and logistics applied technology. There are several standards in Canada’s standardization of logistics, such as international standard, national standard, trade standard and enterprise standard. The international standard is the standard system which can go through in every country. The national standard includes the first standard in union government and province government. These two kinds of standards must try their best to show no difference, and is transferring into international standard step by step. The trade standard is made by every trade association, so there have some differences. It is transferring into national and international standard at present. The enterprise standard is made by every enterprise itself, so it has a big limitation and restriction. Every enterprise is revising their standards actively in order to in accordance with the international standard and national standard.[13]

1.4.4.3 EU

  In the progress of promoting the standardization of logistics industry, what the EU did are as follows. First, being aimed at the basic infrastructure, they made the basic and current standard such as unify the pallet, vehicle load bearing and goods’ bar code in order to ensure the logistics activities go on smoothly. Second, they made the mandatory standard being aimed at the safety and environment, such as the Clear Air Law and Comprehensive Environment Duty Law. Third, they sustained the trade association to make trade standard on all kinds of logistics work and service, such as the European logistics association makes the logistics wording standard and logistics employees qualification standard.[14]

1.4.4.4 Korea

  Korea is more emphasis on logistics standardization of one of the countries, standardized speed. Korea in the standard system to pay attention to cooperation with the United States and Europe, will focus on the general nature of the international standard. Has proposed that Korea Industrial Standard on the logistics of a number of the draft, they include the logistics module system, the basic size of container, logistics, language, logistics, facilities, equipment, benchmark, conveyor use of packaging a series of dimensions (packing modulus), Packaging term, large containers, plastic universal containers, flat pallet, trucks, cars and other wall sizes.

1.4.5 The factors influencing the China Logistics Standardization

1.4.5.1 Packaging

  Morabito R., Morales S.R. and Widmer J.A.(2000) have argued that the application of an optimization model to solve problems of arranging products (packed in boxes) on pallets, and arranging loaded pallets on trucks. Initially the model is applied to solve thousands of randomly generated experiments. Then, in order to assess the effectiveness of the solutions in practice, the model is applied to two Brazilian case studies: a food company distribution center and a large wholesale distribution center. We also discuss the use of this approach for optimizing the sizes of packages, pallets and trucks. In particular, we analyze the performance of the Brazilian standard pallet (PBR), adopted by the Brazilian Association of Supermarkets (ABRAS) and recommended by the Brazilian Logistics Association (ASLOG), in comparison with other standard pallets. By examining not only the loading of products on pallets, but also the loading of pallets on trucks, we can obtain global utilization indices which are useful to evaluate the economical performance of unit load systems in the logistics chain of a company.[15]

  Felix, et al. (2006) presents a two-phase intelligent Decision Support System (DSS) for Air-Cargo Loading Problem (ACLP). This problem can also be viewed as three dimensional, non-identical, multiple bin-packing problems because of the different shapes and specification for the air cargo pallets. Phase-I of the proposed decision support system discusses the Linear Programming (LP) model to decide the lower bound for global minimum cost of pallets to load the available cargo based on its weight and volume. Phase-II heuristic of the proposed system efficiently loads the cargo-boxes and generates the loading plan of each pallets with minimum deviation from the lower bound, decided in earlier phase-I, would be the most suited one. The contribution of this paper lies in developing a new approach for the three-dimensional loading plan of the air cargoes on the different shaped and sized pallets. The constraints related to the shape and size of the pallets, related to the airlines and the shipping destination are also taken in account in the proposed system, which are not adequately discussed in the previous literatures. For ranking of cargo-boxes, a method of rank revision based on left empty-space has been suggested. The proposed DSS has been implemented on the real time data sets taken from freight forwarding company. The data sets contain the information about the 54 different classes of the total 671 cargo-boxes. The problem considered in this paper is more complex than the some discussed in the literatures. At number of instances, the developed system has successfully loaded the pallets up to the 90% and above by volume.[16]

  Gustavo and Dell Robert (2007) presents the Pallet Loading Problem (PLP) maximizes the number of identical rectangular boxes placed within a rectangular pallet. Boxes may be rotated 90° so long as they are packed with edges parallel to the pallet’s edges, i.e., in an orthogonal packing. This paper defines the Minimum Size Instance (MSI) of an equivalence class of PLP, and shows that every class has one and only one MSI. We develop bounds on the dimensions of box and pallet for the MSI of any class. Applying our new bounds on MSI dimensions, we present an algorithm for MSI generation and use it to enumerate all 3,080,730 equivalence classes with an area ratio (pallet area divided by box area) smaller than 101 boxes. Previous work only provides bounds on the ratio of box dimensions and only considers a subset of all classes presented here.[17]

  We study a problem faced by a major beverage producer. The company produces and distributes several brands to various customers from its regional distributors. For some of these brands, most customers do not have enough demand to justify full pallet shipments. Therefore, the company decided to design a number of mixed or “rainbow” pallets so that its customers can order these unpopular brands without deviating too much from what they initially need. We formally state the company’s problem as determining the contents of a pre-determined number of mixed pallets so as to minimize the total inventory holding and backlogging costs of its customers over a finite horizon. We first show that the problem is NP-hard. We then formulate the problem as a mixed integer linear program, and incorporate valid inequalities to strengthen the formulation. Finally, we use company data to conduct a computational study to investigate the efficiency of the formulation and the impact of mixed pallets on customers’ total costs.[18]

  The meaning of modern logistics and packaging were put forward by Fu Yungang reported paper in 2007 year，and they analyed  the necessity and content of rationalization of packaging logistics system ,desicribed the ways to packaging design of product based on modern logistics were introduced to instruct packaging designers.[19]

1.4.5.2 Transportation

  As we know, the choice of the transport mode that is a fundamental part of distribution management which should be analyzed carefully because of the impact upon a company's operational efficiency, so there is a detailed discussion about the choice of the transport mode, they mentioned that failure to identify the most appropriate transport mode may incur higher costs than are necessary and may provide a lower customer service level than is potentially possible. The decision upon the choice of the transport mode is extremely complex because of the vast volume of choice available together with the numerous methods of examination and evaluation of each choice.[20]

  A third of a century ago, management guru Peter Drucker called logistics the last great unexplored continent of business. This is no longer true. While transportation is the largest component of logistics, ordering costs, carrying costs, warehousing costs, and administrative costs are nontrivial. Corporations and academics now have departments to handle the logistics functions. Transportation has been subsumed, in many cases, by these broader departments. Managing the supply chain—from raw material assembly, to work in progress, to the physical distribution of the final product or service—is the essence of business logistics. The field has its quantitative side, with many models that minimize costs and maximize profits. A growing area is the qualitative side, which emphasizes management awareness of the logistics chain. [21]

1.4.5.3 Storage

  A. J. Mallette and R. L. Francis(1972) described the problem is considered of locating facilities of known areas so as to minimize a total cost consisting of costs directly proportional to the average distances between facilities and known points in the plane. An example would be the layout of products in a warehouse so as to minimize the total cost due to moving products to and from warehouse docks. We show that the problem can be accurately represented and solved efficiently, as a generalized assignment problem, which is a special case of the transportation problem. An interesting special case of the location problem may be solved by a simple ranking procedure.[22]

  Warren H. Hausman et al., (1976)[23] in the past few years, increasing numbers of automatic warehousing systems using computer-controlled stacker cranes have been installed. Our research concerns the scientific scheduling and design of these systems. There are three elements to scheduling: the assignment of multiple items to the same pallet (Pallet Assignment); the assignment of pallet loads to storage locations (Storage Assignment); and rules for sequencing storage and retrieve requests (Interleaving). This paper deals with optimal storage assignment. Results are obtained which compare the operating performance of three storage assignment rules: random assignment, which is similar to the closest-open-location rule used by many currently operating systems; full turnover-based assignment: and class-based turnover assignment. It is shown that significant reductions in crane travel time (and distance) are obtainable from turnover-based rules. These improvements can, under certain circumstances, be directly translated into increased throughput capacity for existing systems, and may be used to alter the design (e.g., size and number of racks, speed of cranes, etc.) of proposed systems in order to achieve a more desirable system balance between throughput and storage capacity.

  (Y. Karasawa et al., 1980)[24] In this paper, we develop a design model for a system of an automated warehouse with aisles, between which there is a stacker crane running through both vertically and horizontally at one command. The problem is formulated as a nonlinear mixed integer programme in which the cost of the system is minimized with required functions of the automated warehouse. A method of solution is given on the basis of non-linear programming techniques. We also make a trade-off analysis between cost and functions. By doing this, automated warehouses can be designed more flexibly and more efficiently. Some experiments prove the efficiency of the method.

  "Research on warehouse design and performance evaluation: A comprehensive review" (2007)[25] presents a detailed survey of the research on warehouse design, performance evaluation, practical case studies, and computational support tools. This and an earlier survey on warehouse operation provide a comprehensive review of existing academic research results in the framework of a systematic classification. Each research area within this framework is discussed, including the identification of the limits of previous research and of potential future research directions.

1.4.5.4 Load and unload

  A solution to the problems of resource allocation and scheduling of loading and unloading operations in a container terminal is presented. The two problems are formulated and solved hierarchically. First, the solution of the resource allocation problem returns, over a number of work shifts, a set of quay cranes used to load and unload containers from the moored ships and the set of yard cranes to store those containers on the yard. Then, a scheduling problem is formulated to compute the loading and unloading lists of containers for each allocated crane. The feasibility of the solution is verified against a detailed, discrete-event based, simulation model of the terminal. The simulation results show that the optimized resource allocation, which reduces the costs by frac13, can be effectively adopted in combination with the optimized loading and unloading list. Moreover, the simulation shows that the optimized lists reduce the number of crane conflicts on the yard and the average length of the truck queues in the terminal.[26]

  (Yvo A. Saanen et al., 2005)[27] Container terminals are struggling with ever-increasing volumes, and are therefore searching for solutions to increase throughput capacity without expanding their physical footprint. They are also looking for cost-efficient solutions, leading to the application of semi-automated high density stacking systems for container storage. However, when selecting such a system, it needs to be determined what is the best configuration for that particular terminal, and secondly: how to make such a system productive? So far, we have seen various applications in practice that are quite different. How come? In this paper, we will compare three different automated container storage concepts on their efficiency in terms of productivity, flexibility, area utilization, and cost to come to a verdict: what is the best automated high-density concept yet existing? Furthermore, we will define the conditions under which a certain concept has to be preferred over another one.

1.4.5.5 Information

  Ram Narasimhan and Soo Wook Kim(2001) argue that there might be a recommended sequence in using information systems for supply chain integration. Support is provided through an analysis of structural relationships of ways in which information systems are utilized for supply chain integration, i.e., Infrastructural Support, Value Creation Management, Logistical Operations, and Supply Chain Management Performance.[28]