Logistics

“ I found the processes at the warehouse quite as interesting as Edith had described them, and became even enthusiastic over the truly remarkable illustration which is seen there of the prodigiously multiplied efficiency which perfect organization can give to labor. It is like a gigantic mill, into the hopper of which goods are being constantly poured by the train-load and ship-load, to issue at the other end in packages of pounds and ounces, yards and inches, pints and gallons, corresponding to the infinitely complex personal needs of half a million people. ”

“ For the purpose of examining this question, let us consider the case of two manufacturers of the same article, one situated in a country in which labour is very cheap, the machinery bad, and the modes of transport slow and expensive; the other engaged in manufacturing in a country in which the price of labour is very high, the machinery excellent, and the means of transport expeditious and economical. Let them both send their produce to the same market, and let each receive such a price as shall give to him the profit ordinarily produced by capital in his own country. ”

“ The machinery of commerce is chiefly the means of bringing things wanted to the people who want them.
Much, however, of the exertion required in all industries, especially in farming, is simply “to fetch and carry.” It will emphasize this fact to study, while you eat a piece of cherry pie, the processes involved in bringing it from the treetop, grainfield, dairy and cane-field, through mill and store and pantry and oven, to your plate. Transportation cuts a tremendous figure in production of wealth. In the first stages of social life it is almost the whole. ”

“ As the means of communication improved, the mobility of armies called for a better organization of supply. It became imperative to import foodstuffs from a distance, as, owing to the growth of armies, the theatre of war was no longer able to maintain them from its local resources. To bring food from a distance requires transport, and consequently the Treasury or civil side were gradually obliged to organize a transport as well as a supply system. ”

“ The plain instruction, of these genuine facts, to our planters and farmers, is, to encourage household manufactures, and all other manufactures on the estates, at the doors, in the townships, villages, and counties in which they live, consuming raw materials, building materials, food for man and beast, fuel, drinks, and other productions of the earth. This system of adjacent manufactures saves all the cost of transportation of our productions to the sea-ports, and the expense of carrying foreign goods from the sea-ports to the interior, more profitable than canals and turnpike roads. ”

“ The process of transportation, different from the process of final distribution, comprises the act of bringing the products of land, water, and mines to the places of manufacture and general production, and to re-transport the partly finished goods either to other places at which the process of production is finished, or to bring the finished goods to the points where the distribution to the users or consumers takes place. ”

“ It is the centre of the raw materials for manufactures, cotton, wool, metals, coal, gas, oil fields, all sorts of food. And as it is the centre of supply, so it is of distribution—60 railroads and branches bring freight and carry out manufactured products to every part of the country—to say nothing of the great number of lines of water transportations—connecting with all parts of the world. ”

“ These necessaries are supplied in combination by agriculture, mining, the textile and clothing trades, and the building trade, the collective importance of which, in the national economy, can thus be understood.
Industrial strength may be measured, secondly, by the degree in which it facilitates transport. Transport is provided by the railway, the shipping, and the engineering trades, the latter co-operating with the first two. To warm and to transport is the main function of human industry. ”

“ Such products of the country as are to be consumed where they are produced need no roads or rivers, no means of transportation, and have no very proper connection with this subject. The surplus—that which is produced in one place to be consumed in another; the capacity of each locality for producing a greater surplus; the natural means of transportation, and their susceptibility of improvement; the hindrances, delays, and losses of life and property during transportation, and the causes of each, would be among the most valuable statistics in this connection. ”

“ Transportation facilities as the messengers for the exchange of products between countries and continents know no boundary lines—land, water, air have been conquered and rendered servants of the monstrous forces behind the prevailing industrial system of production and exchange. ”

“ The introduction of machinery into manufacturing wrought vast changes also in the organization of business. The unit of industry greatly increased in size. The economies of organized wholesale production were soon made apparent; and the tendency to increase the size of the factory and to amalgamate the various branches of industry under corporate control has continued to the present. The complexity of business operations also increased with the development of transportation 10 and the expansion of the empire of trade. ”

“ For some one, who hitherto, like all the proprietors along the coast, had obtained his wine, his brandy, his salt, his tobacco, from the smugglers in small quantities, had hit upon the idea that what was needed was an intermediary between the supply and the demand; a middleman who should provide a sort of warehouse or magazine for the smuggling trade, and thus afford the furnishers an opportunity of getting rid of larger quantities at once, and the purchasers the means of procuring their supplies as they needed them, and at convenient times. ”

“ There is wanted, therefore, for home production—
1st. A force of workmen adequate to the production of a minimum supply of ordnance and ordnance stores for the army. This force is shown in paper No. 3.
2d. That this force should be permanently attached to the Bureau, and in no way liable to be interfered with by any one.
3d. That a minimum supply of food and clothing should be furnished by the Subsistence and Quartermaster Departments.
The "impediments" to the importation of such supplies as must still come from abroad, must be overcome, as they arise, by individual energy and resource. ”

“ A means of heating private dwellings, of cooking food, etc., might conceivably be supplied in a local way, by the growth of forests; but the fuel needed for the centers of manufacturing and commerce has to come from distant points. The law of increasing returns in manufacturing, then, and natural location of mines are the most generic causes of transportation. The system which has resulted gives to everybody more and better food, as well as more and better goods of every kind, than he could possibly have had if the primitive system of local manufacturing had continued. ”

“ In many of the large establishments of our manufacturing districts, substances are employed which are the produce of remote countries, and which are, in several instances, almost peculiar to a few situations. The discovery of any new locality, where such articles exist in abundance, is a matter of great importance to any establishment which consumes them in large quantities; and it has been found, in some instances, that the expense of sending persons to great distances, purposely to discover and to collect such produce, has been amply repaid. ”

“ A larger economy than any of these--yes, of all together--is effected by the organization of our distributing system, by which the work done once by the merchants, traders, storekeepers, with their various grades of jobbers, wholesalers, retailers, agents, commercial travelers, and middlemen of all sorts, with an excessive waste of energy in needless transportation and interminable handlings, is performed by one tenth the number of hands and an unnecessary turn of not one wheel. ”

“ A first consideration is the location of the building for operating advantages, which is a local matter, but involves shipping facilities by team and by car, convenience to the source of production, and power plant. Naturally the value of the commodity in storage, which at present prices, reaches a considerable amount, and the safety of the product becomes a matter of no small thought. ”

“ Distributing producers, or those who convey the raw material to the manufacturer, and the manufactured article to the consumer,—comprehending the commission merchants, wholesale dealers, importers, grocers, butchers, and shopkeepers of every description; their vast machinery being the ships, railroads, highways, waggons, horses, and men by which this distribution is effected. ”

“ Again, if the commodity itself is of a perishable nature, such, for example, as a cargo of ice imported into the port of London from Norway a few summers since, then time will supply the place of competition ”

“ The amount of commerce required increases with the concentration and specialization of industry, and with every widening of the producer’s market.
It has been the accumulation of capital and its increased availability for purposes of production that have made possible the organization of industry on its present basis, and enabled men to construct the highly developed transportation system by means of which commerce is accomplished. The material progress of the past century is unprecedented. ”

“ Similarly, every kind of raw material finds its destination far from the place of its production and is consumed directly or as a manufactured product. This gigantic business of transportation is the means of providing for the sustenance and comfort of millions of human beings, and in spite of the extensive use of machinery it requires at every step the co-operative labor of human beings. ”

“ Every modern industrial nation has its vitals; in one case it may be essential mining areas, in another manufacturing districts, a third may be dependent on overseas trade coming into its ports, a fourth so highly centralized that its capital is the real as well as the nominal heart of its life. In most cases there is a blend of these several factors, and in all the regular flow of transport along its arteries is a vital requirement. ”

“ To make exchange perfect there must constantly be great stores of goods in warehouses, ships, and railroad trains—goods held to supply the market, and goods on their way to market. To make labor effective, there must be many and various tools, factories, engines—all sorts of machinery. These tools and these goods in the hands of the producer are capital. ”

“ Another of our important problems is the distribution of raw materials. We cannot say that we have sufficient raw materials, but we have enough to fill present requirements, and we can hold out for a considerable time with our own production. We have made a thorough inventory and only those factories are supplied which are held to be absolutely in need. ”

“ If transportation were perfect and an even flow of materials could be assured, it would not be necessary to carry any stock whatsoever. The carloads of raw materials would arrive on schedule and in the planned order and amounts, and go from the railway cars into production. ”

“ Historical causeschiefly religious wars and national rivalries-have had a good deal to do with their growth and their present distribution; still more so the employers were guided by considerations as to the facilities for sale and export-that is, by considerations which are already losing their importance with the increased facilities for transport, and will lose it still more when the producers produce for themselves, and not for customers far away. ”

“ These are manufacturing countries in which the ruling classes are the captains of industry, the owners of the complete mechanism of production and transportation of commodities.
The working classes of these countries do not receive the full product of their toil and are therefore not able to buy all the goods produced by them. With the increasing perfection of the tools and the methods of production this underconsumption of commodities must also increase proportionately. ”

“ But if there were any feasible transportation facilities I doubt if we should make use of these native raw materials. It is the policy of the department to go into the market like any other buyer where it can. ”

“ But in many towns, and especially in America, the supply is considerably greater, but also in many cases a good deal of the supply is lost by leakage of the mains. The supply through the branch mains of a distributing system is calculated from the population supplied. But in determining the capacity of the mains the fluctuation of the demand must be allowed for. ”

“ With a mill in A, working with much economy, and a number of household workshops in B producing with less economy, the product of the large mill may invade the territory supplied by the little workshops, and the carrier may receive in return for transportation about as much as the difference between the two costs of production. ”