The Place of Logistics in Infrastructure Management

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What is Enterprise Infrastructure?

Infrastructure is the foundation a company is built on and encompasses human capital, business processes, technology, and other tools.  Infrastructure is composed of critical systems and structures that divide into two broad groups:

  • Hard infrastructure: the physical systems as well as the fixed assets required for these systems to function.
  • Soft infrastructure: the functions, people, and processes required for the organization to function.

Depending on the size and complexity of the organization, the infrastructure management program requires varying degrees of planning, architecture, operation, and controls.  What specifically is considered infrastructure will vary from industry to industry and even intra-industry. Still, some categories will be universal to all organizations.  For example, computing, network, and IT services fall under critical infrastructure for most companies in the digital age.  Depending on the severity, an issue with this infrastructure can be very damaging to an organization.  Another example would financial systems and processes.  Again, a severe failure here can be disastrous for an organization.

How Does Logistics fit in Enterprise Infrastructure Management?

Logistics is the supply chain management segment responsible for the flow of goods, services, and information from the point of origin to the end-user/customer. Essential functions of logistics include (but are not limited to) inventory management, purchasing and supplier selection, demand forecasting, transportation, and warehousing.  Logistics covers both inbound and outbound flows.  Inbound logistics involves purchasing and managing inbound materials or inventory, for example. In contrast, outbound logistics includes storing and transporting the final product and related information to the end-user.

How does this fit into infrastructure management? The logistics function (more precisely) the people, processes, tools, and technology behind it) falls under soft infrastructure. While not all organizations require a logistics function, those that do are likely to view it as part of its critical infrastructure. This is especially true for enterprises that rely heavily on the efficient and timely flow and use of goods/services across the supply chain. These organizations will make logistics a part of their critical infrastructure strategy, and will ensure all people, processes, and tools within the function are always at peak (or at least near-peak) at all times. This means building policies and procedures into the infrastructure management program specific to the logistics function, including:

  • Business continuity and disaster recovery plan regarding enterprise logistics.
  • Hiring and training guidelines for critical members of the logistics function.
  • Best practices for selecting, monitoring, and dealing with all inbound and outbound logistics stakeholders, and having backup plans in place if one or more fail.
  • Risk management process surrounding all information systems and all other technology critical to smooth operations of the logistics function (likely to be part of the broader enterprise digital infrastructure policy).