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Improvement of Material Flow in the Production and Supply Chain of ...

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CHAPTER 1<br />

INTRODUCTION OF THE RESEARCH<br />

1.1 Brief background <strong>of</strong> <strong>the</strong> research<br />

The pioneer <strong>of</strong> logistics appeared <strong>in</strong> <strong>the</strong> United States <strong>of</strong> America <strong>in</strong> <strong>the</strong> earlier<br />

twentieth Century. And it is improved <strong>and</strong> perfected with <strong>the</strong> development <strong>of</strong> society<br />

<strong>and</strong> technology. There is more than one def<strong>in</strong>ition <strong>of</strong> logistics, but <strong>in</strong> general, <strong>the</strong> goal<br />

<strong>of</strong> logistics is meet<strong>in</strong>g <strong>the</strong> requirements <strong>of</strong> customers; it is <strong>the</strong> art <strong>of</strong> manag<strong>in</strong>g <strong>the</strong><br />

supply cha<strong>in</strong> <strong>and</strong> science <strong>of</strong> manag<strong>in</strong>g <strong>and</strong> controll<strong>in</strong>g <strong>the</strong> flow <strong>of</strong> goods, <strong>in</strong>formation<br />

<strong>and</strong> o<strong>the</strong>r resources between <strong>the</strong> po<strong>in</strong>t <strong>of</strong> orig<strong>in</strong> <strong>and</strong> <strong>the</strong> po<strong>in</strong>t <strong>of</strong> consumption. The<br />

scope <strong>of</strong> logistics <strong>in</strong>cludes <strong>the</strong> <strong>in</strong>tegration <strong>of</strong> <strong>in</strong>formation, transportation, <strong>in</strong>ventory,<br />

warehous<strong>in</strong>g, material h<strong>and</strong>l<strong>in</strong>g, <strong>and</strong> packag<strong>in</strong>g (Wikipedia, viewed 2007). Accord<strong>in</strong>g<br />

to <strong>the</strong> different effects, logistics is classified <strong>in</strong>to five varieties: <strong>Supply</strong> Cha<strong>in</strong> Logistics,<br />

Bus<strong>in</strong>ess Logistics, <strong>Production</strong> logistics, Reclamation Logistics, <strong>and</strong> Cast<strong>of</strong>f Logistics<br />

(Q<strong>in</strong> & Wang, 2001). In fact, logistics management is part <strong>of</strong> supply cha<strong>in</strong> management<br />

<strong>and</strong> also <strong>the</strong> genesis <strong>of</strong> supply cha<strong>in</strong> management.<br />

<strong>Supply</strong> cha<strong>in</strong> management (SCM) is <strong>the</strong> activity <strong>of</strong> <strong>in</strong>tegrat<strong>in</strong>g <strong>the</strong> whole bus<strong>in</strong>ess, from<br />

procurement to production (process<strong>in</strong>g), storage <strong>and</strong> sale for <strong>the</strong> products <strong>and</strong> services<br />

provided by a company (Takenaka, viewed 2007). It is <strong>the</strong> process <strong>of</strong> plann<strong>in</strong>g,<br />

implement<strong>in</strong>g, <strong>and</strong> controll<strong>in</strong>g <strong>the</strong> operations <strong>of</strong> <strong>the</strong> supply cha<strong>in</strong> with <strong>the</strong> purpose to<br />

satisfy customer requirements as efficiently as possible. It spans all movement <strong>and</strong><br />

storage <strong>of</strong> raw materials, work-<strong>in</strong>-process <strong>in</strong>ventory, <strong>and</strong> f<strong>in</strong>ished goods from<br />

po<strong>in</strong>t-<strong>of</strong>-orig<strong>in</strong> to po<strong>in</strong>t-<strong>of</strong>-consumption. (Wikipedia, viewed 2007). Generally<br />

speak<strong>in</strong>g, supply cha<strong>in</strong> management is concerned with management <strong>of</strong> <strong>the</strong> material<br />

flow, <strong>in</strong>formation flow, <strong>and</strong> fund flow (Luo, 2006). From this po<strong>in</strong>t, “its scope <strong>in</strong>cludes<br />

tim<strong>in</strong>g <strong>and</strong> quantity <strong>of</strong> material flow, logistics, improv<strong>in</strong>g efficiencies <strong>in</strong> problems with<br />

several decision makers, etc” (Sosic, 2002). Among <strong>the</strong> three flows, material flow is <strong>the</strong><br />

focus <strong>and</strong> keystone <strong>of</strong> <strong>the</strong> research <strong>of</strong> supply cha<strong>in</strong> management.<br />

“<strong>Material</strong> flow is a significant factor <strong>in</strong> <strong>the</strong> design <strong>of</strong> manufactur<strong>in</strong>g systems. To design<br />

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