Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

1.1.5 The Product Life Cycle, and the Role of Logistics and Operations Management

Intended learning outcomes: Produce an overview on the product life cycle. Differentiate between terms such as logistics, operations, logistic management, operations management, and value-added management.

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Products are made by converting goods. The use or utilization of products leads to their consumption or usage.

Consumption of goods (by the consumer) means, according to [MeWe18] the act of consuming or using up, and also, according to [Long15], the amount of goods that are used (up).

Goods that are used up must be disposed of properly. There is thus a life cycle to products.

Put simply, the product life cycle consists of three stages: design and manufacturing, use (and ultimately consumption), and disposal, which can be connected with recycling. [note 101].

Figure 1.1.5.1 shows the product life cycle. Design, manufacturing, service, and disposal are seen as value-adding processes,[note 102] symbolized by an arrow pointing in the direction of value-adding. Use is itself a process; however, it is a value-consuming one.

Fig. 1.1.5.1        The product life cycle.

The life cycle of material products generally begins with nature and leads from design and manufacturing to the consumer. A consumed product must then be disposed of, possibly connected with recycling of components. In the most general case, the life cycle ends once again with nature, in that the materials are returned to the earth.

The life cycle of nonmaterial products begins with an issue about which something is declared. This issue, in a broad sense, can also be seen as ultimately connected to things in nature, whether to objects or at least to human thinking about objects. Disposal ends with the information being erased or deleted. In the broadest sense, then, it is also returned to nature.

Quiz on Chapter 1.1.1/1.1.5.: Goods, Products and the Product Life Cycle

Logistics is involved with products over their entire life cycle:

Logistics is the organization, planning, and realization of the forward and reverse flow and storage of goods, data, and control[note 103] along the entire product life cycle.

Logistics management is the efficient and effective management of logistics activities to meet customers' requirements.

The term “operations management” is very similar to the above definition of logistics management.

Operations, according to [RuTa17], is a function or a system that transforms input to output of greater value.

Operations management, according to [APIC16], is the planning, scheduling, and control of the activities that transform input into finished goods and services.

Operations Management also denotes concepts from design engineering to industrial engineering, management information systems, quality management, production management, accounting, and other functions as they affect the operation. According to [RuTa17], it denotes the design and operation of productive systems — systems for getting work done.

It also makes sense to view the other functional terms found all along the company’s value chain, namely, procurement, production, and sales, from the management perspective. In the literature, functional terms are usually defined clearly and distinctly. In contrast, for management terms — like procurement management, production management, and sales management — there often are no formal definitions. In practical usage, however, these terms are increasingly similar to the definitions given above for logistics or operations management. This is not surprising, for it is impossible to conduct successful operations management if it is applied to only a part of the value chain. For this reason, we assume in the following that there are no significant differences among all these management terms.

Value-added management can thus be used as a generalized term for all the types of management mentioned above. [note 104].

Figure 1.1.5.2 shows a graphical representation of how the terms fit the company’s world.

Fig. 1.1.5.2        Assignment of terms to value-added management.

This animation shows a graphical representation of how the terms fit the company's internal and external activities
Click on the start button to begin the demonstration.

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Course section 1.1: Subsections and their intended learning outcomes

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