**2. Literature review**

those that actually trying to develop its core competencies to offer a standard of excellence in goods and services and are concerned with its strategy and with the workforce. The market organizations have demanded a set of features that include efficiency, effectiveness, dynamism, creativity, agility, flexibility and having holistic vision, to be competitive and having defined their strategies, seeking business

In [1] are highlighted the indicators that assess the efficiency of internal activities and processes, and logistics performance indicators are suggested. They are classified into the following categories: stock management, cost, productivity, quality and customer service. However, it is necessary to develop a performance evaluation form for the supply chain, using external and internal indicators together to evaluate the performance of the entire chain, not only internal indicators of logistics, so that, working together, companies manage to achieve the best return busi-

In [2], it is considered the designation of logistics as "logistics management." Also it is cited that this concept can be included into customer service, traffic and transportation means, storage, selection of local to manufacture and store, inventory control, order processing, acquiring, transportation of materials, distribution, supply of parts, packaging, returning goods and order volume forecast and that an organization must provide products and services to customers according to their

Sometimes logistics is related to the marketing, as the strategic process to managing the acquisition, transfer, storage, parts, and finished products, together with the flow of information and its marketing channels to maximize profit with costcutting. There is no single definition for conceptualizing logistics, which be

accepted by all researchers in the field. The important thing is that companies know that it is present in the business world and that professionals must understand their target that "is to make available products and services where they are needed, when

The traditional logistics refers to activities such as packaging, transportation, loading, unloading and storage, etc. The modern logistics reaffirms the concept of integrated logistics management and its implementation. It is important to outstanding that modern logistics must be understood as the medium during the acquisition, production, and operation of the whole process to delivery to the final

In contemporary organizational environment, logistics appears as a strategic concept, because of not only materials management and physical distribution, but also for providing values of time and place for customers, for becoming an element that stands for organizations, with agility, flexibility and integration of internal and external channels. Several authors describe that the concept of logistics can be separated into three basic items: food (suppliers), plants (internal) and distribution (customers). This represents a group that is often defined as highly empirical, resulting in negative effects that directly influence the outcome of the final perfor-

Despite the importance of internal logistics, it has not been fully understood, particularly in manufacturing industry [7–9]. However, it constitutes a large part of the total cost for businesses [10]; average logistics costs represent between 10% and 30% of total sales volume in a typical production company [11]. This chapter is composed by eight parts: An introduction, a Literature Review, a section of materials and methods where it is explained all the procedure developed, a section of results analysis and finally the conclusions, the acknowledgments, the conflict of

sustainability.

ness of supply chain.

they are desired" [3].

mance of organizations [5, 6].

interest and the references.

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consumer [4].

needs and requirements as efficiently as possible.

*Operations Management - Emerging Trend in the Digital Era*

#### **2.1 Internal logistics concepts**

Several authors state that an internal logistics system well designed and correctly used increases the efficiency of an organization [12, 13].

To summarize, several aspects of logistics performance are very important for a company, and among others refer to delivery, quality, robustness, information, and cost and customer service. However, it is also important to consider which is the combination of high efficiency, performance, and effectiveness [14]. For [15] the performance efficient logistics activities alone are not enough. To create competitiveness for the company, it is essential that the right kind of logistics activities to be prioritized and through the right performance variables. However, as discussed by [16], there is a lack of standardized ways of dealing with the internal logistics requirements influencing the overall logistics performance. In general, logistics managers are trying to use measurements to help design and manage more effective and efficient logistic systems for the client. Identifying the value of internal logistics and its critical performance criteria can be a way to help this development [17].

Design and improve the internal logistics system involves decision making at different levels, such as strategic, tactical and operational issues. As such, it involves long-term planning (strategic) and aspects of planning and control (management) of short and medium term [18]. An internal logistics system that works well requires involvement and understanding of the system at all levels. Logistics professionals should be empowered with the necessary experience in essential and critical functions for their own company and fully understand how they affect the entire value chain [19].

Internal Logistics handles all the management of the internal supply process, storage, transportation and distribution of goods within the organization, that is, to meet its domestic demands as support for manufacturing [20]. According to [6], the cycle of support to manufacturing activities is directly related to internal logistics, i.e., planning and production control. Thus, the logistical support to the production aims mainly to establish and maintain an economic and orderly flow of materials and stocks in process in order to meet the schedules of the production sector. The logistics support production has the operational responsibility for the following activities: handling and storage of products, materials, components and semi-finished parts. With the changes in the business environment, logistics service concepts have evolved and various issues were added in operational logistics tasks such as packaging, outsourced inventory management, bar code, and information systems. These operational logistics tasks were considered, and called as "internal logistics," and these activities should "interact with other functional areas" [21]. Internal logistics thus involves logistics activities within the walls of an organization, e.g. internal transport, materials handling, storage and packaging [15].

Other more recent studies indicate that the internal logistics has been the attempt to organize and optimize the internal activities with the cost reduction objective for organizations in different segments. However, organizational issues such as the lack of a strategic vision that become in difficulties need to be addressed. The transfer of knowledge and technology used in the manufacturing industry could be of great benefit concluded by [22].

According to [23], the end consumer determines the success or failure of supply chains. Thus, an important part of logistics performance is linked to customer service and to be able to respond to their needs and requirements. When it comes to internal logistics as a system, both the client and the service provider are the same at the organization itself. So to see the internal logistics as a system, both the service provider and the customer are the same company. As such, the customer's needs and requirements can be translated for internal purposes. Therefore, the performance of internal logistics is under the control of the company, and can provide a more direct indication of the effects of the relationship involving structure and logistics [16].

Given this approach to internal logistics, was noticed a gap both in theory and in practice referred to this issue. Many discussions in the general theoretical field of logistics has been developed. Companies need support with tools and models or methods that make it possible to identify, organize and help to define and shape to analyze them; it is evident in the daily graded citations mentioned above about the lack of studies in this area. Therefore, this chapter suggests a way to define and evaluate the internal logistics.

Based on the readings of selected articles and the development of a pattern was possible to define a more comprehensive concept of internal logistics:

Internal logistics is planning, execution and control of the physical flow and internal information of the company, seeking to optimize the resources, processes and services with the highest possible profit.

According to the standpoint of logistics as a picture or an approach that consists of several parts and aspects, it is often described as a system, which is the perspective used in this work to analyze the internal logistics as part of the system. According to [24], the logistics system is always open and in a state of exchange with its environment. However, the limits of the system and subsystems and components included vary depending on different perspectives.

The system studied in this chapter is the internal logistics system, where the system boundaries are the physical limits of the company under study. Then internal logistics comprises logistics activities within the walls of an organization, such as internal transport, materials handling, storage and packaging [15].

There are three different angles from which, logistics operations can be seen: processes, resources and organization. All these aspects can be seen as parts of the logistics system, as the flow of goods and information to be made through a series of stages called activities and processes [25]. In addition, resources refer to all means, equipment and personnel needed to run the process. Finally, the organization includes all planning and control procedures necessary to implement and manage the system.

Several authors argue that an internal logistics well designed and properly used increases the efficiency of an organization [26]. The project of internal logistics system is therefore an aspect that strongly influences the competitiveness of the system and is therefore related to the objective of this chapter.

A well-formulated strategy helps to use all the resources of an organization and create value based on its internal competition and shortcomings in relation to the external environment. However, it is of great importance that the logistic function and logistics strategy are integrated and aligned with other functions and strategies

**Articles key points IT LT PCP PCM ST IM SP RC WP LA HL IM PP**

Decision making X X X X X X

Cost-cutting X X X X X X X X X Customer and supplier logistics X X X X

X X X X

EDI in logistics X X X X X

Optimization transport X X X X X Routing and inventory X X X X X X X X X

Consolidation loads X X X X *IT = information technology; LT = logistics techniques; PCP = planning and control production; PCM = planning and*

*WIP = working-in-progress; LA = layout; HL = handling; IM = internal transport; PP = picking and packing.*

X X X X X

XX X XX X X

Health care logistics X X X X X Logistics performance X X X X X X Inbound logistics X X X X X X X Cross-docking X X X X

*Conceptualization, Definition and Assessment of Internal Logistics through Different…*

Supply networks X X X

*DOI: http://dx.doi.org/10.5772/intechopen.94718*

Automated material handling

Identifying business value using the RFID e-Valuation framework

Inventory and transportation

Integration between logistics and

*Source: Prepared by authors (2020).*

systems

decisions

Assembly lines

Delivery X X X

X X

Intralogistics operations X X X

Smart logistics X X X X X Manufacturing strategy X X X X

*control manufacturing; ST = storage; IM = inventory management; SP = supply; RC = receipt;*

Companies that emphasize logistics periodically reorganize its logistics functions in their attempt to find and keep the best design in the business environment which is rapidly changing [28]. The overall response capacity could be achieved through a greater sharing of information between partner organizations and a careful selection of suppliers by the purchaser. **Table 2** provides a summary of the components

The novelty of this chapter is related to a new definition of internal logistics which implies a description of its component parts according to this new definition, and the procedure for evaluating its level in anyone company or

of the organization, to create competitiveness [15].

*Key points to compose the concept and components parts.*

used in different studies applied to internal logistics.

factory.

**129**

**Table 1.**

Projecting and improve internal logistics system comprises decision making at different levels, such as strategic, tactical and operational levels. As such, it includes long-term planning (strategic) and aspects of planning and control (management) of short and medium term [18]. Internal logistics system that works well requires participation and understanding of the system at all levels. Logistics professionals must be equipped with the necessary expertise in critical and essential functions for their own company and fully understand how they affect the entire value chain. Supply chains are often faced with the situation where they have to accept some degree of uncertainty, however, must develop a strategy that allows them to adjust supply to demand [27]. In general, it can be affirmed that a strategy is about how to make the planning, which is very different from doing [18]. To conduct portfolio analysis were consolidated by central themes articles and one can see some evidence as to the possible parts of internal logistics. For a better demonstration of sets of items was prepared to **Table 1** resulting in a preliminary view of the parts.


*Conceptualization, Definition and Assessment of Internal Logistics through Different… DOI: http://dx.doi.org/10.5772/intechopen.94718*

*IT = information technology; LT = logistics techniques; PCP = planning and control production; PCM = planning and control manufacturing; ST = storage; IM = inventory management; SP = supply; RC = receipt; WIP = working-in-progress; LA = layout; HL = handling; IM = internal transport; PP = picking and packing.*

*Source: Prepared by authors (2020).*

#### **Table 1.**

the organization itself. So to see the internal logistics as a system, both the service provider and the customer are the same company. As such, the customer's needs and requirements can be translated for internal purposes. Therefore, the performance of internal logistics is under the control of the company, and can provide a more direct indication of the effects of the relationship involving structure and

Given this approach to internal logistics, was noticed a gap both in theory and in practice referred to this issue. Many discussions in the general theoretical field of logistics has been developed. Companies need support with tools and models or methods that make it possible to identify, organize and help to define and shape to analyze them; it is evident in the daily graded citations mentioned above about the lack of studies in this area. Therefore, this chapter suggests a way to define and

Based on the readings of selected articles and the development of a pattern was

According to the standpoint of logistics as a picture or an approach that consists of several parts and aspects, it is often described as a system, which is the perspec-

Internal logistics is planning, execution and control of the physical flow and internal information of the company, seeking to optimize the resources, processes

The system studied in this chapter is the internal logistics system, where the system boundaries are the physical limits of the company under study. Then internal logistics comprises logistics activities within the walls of an organization, such as

There are three different angles from which, logistics operations can be seen: processes, resources and organization. All these aspects can be seen as parts of the logistics system, as the flow of goods and information to be made through a series of stages called activities and processes [25]. In addition, resources refer to all means, equipment and personnel needed to run the process. Finally, the organization includes all planning and control procedures necessary to implement and manage

Several authors argue that an internal logistics well designed and properly used increases the efficiency of an organization [26]. The project of internal logistics system is therefore an aspect that strongly influences the competitiveness of the

Projecting and improve internal logistics system comprises decision making at different levels, such as strategic, tactical and operational levels. As such, it includes long-term planning (strategic) and aspects of planning and control (management) of short and medium term [18]. Internal logistics system that works well requires participation and understanding of the system at all levels. Logistics professionals must be equipped with the necessary expertise in critical and essential functions for their own company and fully understand how they affect the entire value chain. Supply chains are often faced with the situation where they have to accept some degree of uncertainty, however, must develop a strategy that allows them to adjust supply to demand [27]. In general, it can be affirmed that a strategy is about how to make the planning, which is very different from doing [18]. To conduct portfolio analysis were consolidated by central themes articles and one can see some evidence as to the possible parts of internal logistics. For a better demonstration of sets of items was prepared to **Table 1** resulting in a preliminary view of the parts.

possible to define a more comprehensive concept of internal logistics:

tive used in this work to analyze the internal logistics as part of the system. According to [24], the logistics system is always open and in a state of exchange with its environment. However, the limits of the system and subsystems and com-

ponents included vary depending on different perspectives.

internal transport, materials handling, storage and packaging [15].

system and is therefore related to the objective of this chapter.

logistics [16].

the system.

**128**

evaluate the internal logistics.

and services with the highest possible profit.

*Operations Management - Emerging Trend in the Digital Era*

*Key points to compose the concept and components parts.*

A well-formulated strategy helps to use all the resources of an organization and create value based on its internal competition and shortcomings in relation to the external environment. However, it is of great importance that the logistic function and logistics strategy are integrated and aligned with other functions and strategies of the organization, to create competitiveness [15].

Companies that emphasize logistics periodically reorganize its logistics functions in their attempt to find and keep the best design in the business environment which is rapidly changing [28]. The overall response capacity could be achieved through a greater sharing of information between partner organizations and a careful selection of suppliers by the purchaser. **Table 2** provides a summary of the components used in different studies applied to internal logistics.

The novelty of this chapter is related to a new definition of internal logistics which implies a description of its component parts according to this new definition, and the procedure for evaluating its level in anyone company or factory.


• The survey was applied to the different industries of the industrial pole of

*Conceptualization, Definition and Assessment of Internal Logistics through Different…*

• It was stablished an Internal Logistics Index for evaluating its level in any

• For this porpoise there were used an Excel tab, the fuzzy logic, and the neural

The Industrial Pole of Manaus has more than 565 companies of small, medium and large size, involving seven subsectors of different branches of activities, which can be seen in **Figure 1**. The emphasis of the companies to be researched will focus in the two-wheel sector that is the 16.77% of the PIM billing. The research will be

To assess the internal logistics, a survey was conducted to different companies of the Industrial Pole of Manaus. For data had statistical significance, it was analyzed

The "right" sample magnitude for a specific application depends on many factors, such as costs, administrative aspects, level of precision, level of reliability, variability within the population or subpopulation of interest and specimen method. These factors interact in multifaceted ways. Although a consideration of all the variations is beyond the scope of this chapter, the remainder of this epigraph covers a situation that commonly occurs with simple random samples: How to find the

*Share of activities of sub-sectors in sales of the industrial pole of Manaus in the period from January to February*

*2015 (calculated based on sells in dollars). Source: Suframa – Industrial indicators (2015).*

• With all these information, then there were analyzed and decided which tools would be used for assessing the internal logistics according to its new definition

Manaus.

networks.

**Figure 1.**

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company or factory

what size the sample should have.

and according to its components parts.

*DOI: http://dx.doi.org/10.5772/intechopen.94718*

All this procedure is explained in detail below.

developed in companies of medium, large and small size.

minimum sample magnitude that offers the desired precision.

**Table 2.**

*Theoretical background of the internal logistics components.*
