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Logistics as a discipline has its origins in 19th century military science. The military recognized the need to formalize procedures for the procurement, transportation, warehousing and maintenance of material in order to maximize their resources. The civilian sector began to adopt these procedures in the 1950s and logistics has now grown to become for the first time in 2005 a $100 billon dollar industry in the United States alone.
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| Today most companies use logistics management as a tool to lower the total cost of ownership. Logistics providers employ a combination of modern information systems and transportation expertise to reduce costs in the areas of inventory, personnel, and transportation.
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| Typically, the manufacturer of the product manages the transportation component of logistics. The management and control of this transportation is referred to as "outbound" logistics. In contrast, the management and control of goods by the buyer or designated owner is referred to as "inbound" logistics.
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| When energy companies approach logistics, they concentrate on the inbound side of the equation. Utilities and generators purchase millions of dollars in material from thousands of vendors each year. Managing this inbound freight through a structured freight program allows for the control of this diverse flow of product. The potential is immense for enhanced visibility, improved operations, and overall reduced cost.
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| For information on recent developments in logistics and supply-chain management, we recommend you visit the Web sites of the following organizations and publications:
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| - Council of Supply Chain Management Professionals (CSCMP)
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| - Inbound Logistics
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