What Really is the Difference between Commercial and Military Logistics?

At CANA, we provide logistics operations and data analysis to clients that span across both federal and commercial markets. We have observed some differences in the understanding of terminology and processes between markets and realized it might be helpful (and informative) to explore the term logistics in both the military and commercial contexts. As we will discuss, logistics has rich, nuanced differences depending on who is using it.

The term logistics is thought to have originated among French military writers of the mid-19th century and was originally used to refer to the art of coordinating troop movements and lodging. It was French Emperor Napoleon, in fact, who is credited with well-known maxims as, “[a]n army marches on its stomach,” and “[t]he amateurs talk tactics: the professionals talk logistics.” Despite its military origins, the art of logistics has grown to encompass a very wide variety of activities in both military and commercial endeavors.

Military Logistics

Military logistics provides the means to translate national resources into combat power. Specifically, logistics transforms human effort, natural resources, and industrial capacity into personnel units, weapons, equipment, and supplies. In military-speak, these elements are colloquially known as the three B’s: beans, bullets, and band-aids. Logistics delivers these elements to the training area or battlespace as required, and then sustains the military forces throughout the course of operations. Logistics then returns those forces and materiel assets to their home bases once operations conclude, re-arming and re-equipping them as needed. Well-known historical examples of military logistics in action include the American supply and support buildup during Operation Desert Storm in the early 1990’s and from a slightly different and unsuccessful perspective, the Siege of Stalingrad in World War II.

At the basic level, military logistics includes: transportation - moving personnel and supplies between locations; supply - the requisition authority, distribution, and care of supplies; maintenance - actions taken to keep materiel in, and return material to, serviceable (or usable) condition; general engineering - construction, facilities maintenance, obstacle removal, explosives ordnance disposal, fuel handling, water production and power generation; health services - activities and organizations that address wounds, injuries, and disease; and general services - command support and services including administrative and civil actions, billeting (or lodging), food services, mortuary services, and contracting.

Additionally, military logistics organizes supplies into ten categories referred to as “Classes of Supply” (also referred to as “CoS”). These classes run the gamut of things from a Meal-Ready-To-Eat (MRE) in Class I, to screws and nails in Class IV, or medical supplies in Class VIII. The military, of course, also supplies munitions and explosives, with those being counted in Class V.

Military logistics also organizes activities along strategic, operational, and tactical levels and handles most logistics planning and management separately for each military branch (i.e., Army, Navy, etc.). The holistic management of the military supply chain is challenging, particularly considering the enormous scale and scope that characterizes military operations. Management roles, services, functional areas, and/or CoS lines are compartmentalized and do not necessarily support unified understanding or control of the entire military logistics enterprise by any single organization.

For what it lacks in efficiency, military logistics makes up for in robustness and adaptability. The military logistics approach in Marine Corps Doctrinal Publication 4.1 says that, “[w]ar is conducted in an environment of complexity, fluidity, disorder, and uncertainty.” War and the preparation for war are inherently unstable as the competing actors involved have different and opposing end states in mind. Military logistics’ emphasis on effectiveness over efficiency is indicative of the fact that a failure end state can be a matter of literal life or death. It makes for an exciting, but very serious enterprise.

Commercial Logistics

In the commercial world, logistics includes the procurement, maintenance, distribution, and replacement of resources conducted by corporations, firms, or industries. Generally speaking, commercial logistics often tends to imply the functions of transportation or warehousing. But, the commercial industry has greatly expanded on concepts of logistics to include modifiers like inbound, outbound, global, local, reverse, green, and circular. Concepts such as reverse, green, and circular logistics are more pervasive and critical in today’s world, as companies focus on reducing waste, and supporting regeneration and their global environmental responsibility. These few examples of modifiers refer to nuanced functions or concepts that are not necessarily replicated (or even valued) in a military context, where the warfighting purpose, which defines military logistics, is fundamentally different from commercial logistics.

Those of a certain age in the early 1990’s will remember when McDonald’s stopped using the burger packaging plastic clamshell. Although great for hot hamburgers, the containers, at over 10 million polystyrene boxes a day, filled landfills and damaged the ozone layer. Changing to a different wrapper served to help green a huge conglomerate’s logistics practices. If the current McDonald’s wrappers were reused/recycled into something that could tangibly re-enter the global supply chain, McDonald’s logistics could be defined as reverse and circular. These are important concepts, but present ongoing challenges for the commercial logistician.

A typical commercial logistics department is often oriented on a narrower goal of supporting the operations of its particular business. Due to its focus and more stable working environment, commercial logistics can tend to be more efficient than the military. The commercial industry embraces “Supply Chain Management” (also referred as “SCM”). This also came to prominence during the 1990’s, and is described by Investopedia as the “management of the flow of goods and services and includes all processes that transform raw materials into final products.”

SCM tends towards a holistic approach to managing the logistics process, including all the different aspects, to include information flow and technology. This applied science is an arguably better approach to achieve consistent results over time than the military’s compartmentalized approach. This is notable in corporations such as Amazon, which has refined the efficiencies of supply chain management to the point of, in some instances, requiring only a one-hour window from a consumer’s computer click to home delivery. It is important to note, however, that SCM oriented on efficiency objectives will typically result in supply chains that may be too “fragile” for military applications. The logistician must balance these trade-offs on a daily basis.

Similarities

Despite differences, military and commercial logistics have many points in common. Each can serve as a source of concepts, techniques, and technologies for the other. In both military and commercial settings, it is not uncommon for the logistics stakeholders and planners to be less influential than the primary operations functions. Few people applaud the Napoleonic era French Head of Army Supply, Claude-Louis Petiet, or know off-hand the Director of Supply Chain Operations at Microsoft (it’s Jonathan Allen), but their contributions were, and remain, important.

In the military, logisticians often have a much wider perspective of the battlefield than the tactical commanders they support, but they are also not critically considered in initial planning sessions and sometimes receive almost insurmountable timelines. In the commercial world, logistics and its many variants may be viewed as a secondary, but necessary, cost center. Few companies realize their logistics department probably touches every aspect of their operations and is an excellent source of information that can drive operational decisions.

While there are obvious technology leaders in commercial logistics, it appears both military logistics and the wider commercial logistics market tend to be slower to adopt new technology. In the case of the military, this is often due to funding priority going to other operational priorities; whereas on the commercial side, it can be driven more by a reluctance to invest large sums into untested or niched technology until it is well proven and widely used. This being said, both military and commercial logistics are undergoing a digital and information revolution as emerging technologies such as machine learning, blockchain, robotics, and automation are finding ready use cases in logistics applications. Although challenges such as siloed data, cyber-security, and counterfeiting issues are evident, the anticipation of exciting logistics innovation is real.

In Summary

Logistics in both military and commercial spaces continues to be both an art and a science. Logisticians are hardworking and important contributors to organizational success. At CANA, we support these unsung masters by providing a blend of both best in class commercial and military-based tools and services that simplify and automate logistics processes and promote their capabilities. What do you see as the differences and similarities between military and commercial logistics? We’d love to hear from you in our CANA Forum found here - CANA Connect Forum (canallc.com)

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Article by: CANA Advisors’ Jason Fincher (Principal Logistics Analyst), Terry Hagen (Principal Logistics Analyst), and Joe Moreno (Director of Development)