Origin of Logistics
In the past it was often the case that relationships with suppliers and downstream customers (such as distributors or retailers) were adversarial rather than co-operative. It is still the case today that some companies will seek to achieve cost reductions or profit improvements at the expense of their supply chain partners. Companies such as these do not realize that simply transferring costs upstream or downstream does not make them any more competitive. The reason for this is that ultimately all costs their way to the final marketplace to be reflected in the price paid by the end user. The leading- edge companies recognize the fallacy of this convectional approach and instead seek to make the supply chain as a whole more competitive through the value it adds and the costs that it reduces overall. They have not realized that the real competition is not company against but rather supply chain against supply chain.
There is in effect an evolution of integration from the complete isolation from the other business functions. An example would be where production or purchasing does their own thing in complete isolation from the other business functions. An example would be where production seeks to optimize its unit costs of manufacture by long production runs without regard for the build-up of the finished goods inventory and heedless of the impact it will have on the need for warehousing space and the impact on working capital.
Companies have recognized the need for at least a limited degree of integration between adjacent functions, e.g. distribution and inventory management or purchasing and materials control. The natural next step  requires the establishment and implementation of an ‘and-to-end’ planning framework.
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