Logistical Improvements, Manufacturing Sector, 1960s to 2000s

While cycle time requirements substantially decreased from the 1960s through the 1980s, it came at the expense of growing logistics costs, notably inventory. From that point on, the major achievements were related to productivity gains in distribution, accompanied by a reduction of cycle time requirements, but as importantly, of inventory costs. Another important requirement was containerization, which conferred substantial flexibility to production systems in addition to the container being its own storage unit. The expansion of standard transport infrastructure such as highways, terminals and airports was also essential for the development of modern logistics.

During the 1980s, the application of this “principle of flow” permitted to reduce inventories in time-sensitive manufacturing activities from several days’ worth to several hours. Much of these efforts initially took place within the factory, while supply and output flowed as batches from suppliers and to distributors. In the 1990s, with the convergence of logistics and information technologies, this principle was increasingly applied to the whole supply chain, particularly to the function of distribution. In some highly efficient facilities, the warehousing function went down as far as 15 minutes’ worth of parts in inventory. Service functions such as wholesale and retail are also experiencing a diffusion of logistical management where inventory in stores are kept at a minimum and re-supplied on a daily basis.