1. The Development of Logistical Integration 物流一体化的发展

2. Contents  Four stages:  Physical distribution management  Integrated logistics  Systems integration  External integration(SCM)

3. Stage 1. Physical Distribution Management  Separate distribution departments were created to coordinate all activities involving outbound distribution of finished goods.  Benefits: (1) Establishing a distribution mix to meet customer requirements at minimum cost; (2) Giving distribution a stronger customer focus; (3) raising the status of distribution within the management hierarchy.

4. Stage 2. Integrated Logistics （ functional Integration)  “Logistics department” (or a logistics subsidiary) was established to coordinate all logistics activities upstream and downstream of the production operations. The culmination of this process---total logistics integration extends its influence upstream into product development and downstream into after-sale service and the recycling and disposal of waste.

5. Example

7. Stage 3. Systems Integration (Cross-functional integration)  More coordination is made between logistics and any other functions such as production, marketing, finance, etc.  If a firm’s logistical integration reaches stage 3, we can say, it has realized internal integration.

8. Examples  (1) Cooperation between production and logistics to achieve a cost reduction  (2) Coordination between production, marketing and logistics

9. (1) Cooperation between production and logistics to achieve a cost reduction

10. (2) Coordination between production, marketing and logistics

11. Cues to example 1

12. Stage 4. External Integration (SCM)  All members in a supply chain establish a close relationship and coordinate their activities not only in logistics, but also in production, etc. SCM can be regarded as the highest level of logistics integration.  Through integration, the whole chain may be optimized and each member may benefit from such an optimization.