The Total Cost Concept of Logistics: One of Many Fundamental Logistics Concepts Begging for Answers
这篇社论指出物流总成本概念虽被广泛接受但缺乏深入研究，提出了关于其定义、影响因素和绩效结果的一系列未解问题，并呼吁学者运用多种理论和方法开展基础研究。
In logistics research, the low hanging fruit has not been picked. Journal of Business Logistics should be a salient source for answers to fundamental questions of logistics and supply chain management, and to that end we seek such research. In this editorial, we provide one example that is replete with many fundamental research topics—namely, the total cost concept of logistics. The total cost concept of logistics has been something of a tenet of faith in our discipline. In fact, standard textbook discussions of logistics often include the concept of “total costs.”1 For many years, popular textbooks have made the total cost concept the cornerstone of logistics: Central to the … logistics system is … the total cost concept. (Ballou 1999, 38) Total cost analysis is the key to managing the logistics function. One of the major goals of the organization should be to reduce the total cost of logistics activities rather than focusing on each activity in isolation. (Stock and Lambert 2001, 28) An inherent characteristic of the business logistics approach is the total-cost analysis. (Coyle et al. 1990, 40) Many quantitative studies have been performed to measure how various decisions are affected when a very limited sum of certain costs are considered. Still, little research exists on the topic of total cost itself to elucidate its meaning, antecedences, and outcomes. Indeed, careful consideration of the concept evokes more questions than answers: What is total cost? Which costs should be considered part of total costs for logistics purposes? Do firms really perform better when they strive to minimize total costs? Which factors drive the extent to which firms comprehensively assess total costs, or have a total cost orientation? What are the real operational, financial, or even relational outcomes of attempting to minimize total costs? These are just a few relevant questions that logistics research has not yet addressed in a comprehensive manner. Our fundamental concept, the total logistics cost concept, is ripe for theory development and testing. Organizational theory could be used to develop theory regarding how structure and environment influence a total cost orientation. Organizational behavior could be used to develop theory regarding how motivation, performance, and satisfaction of individuals are antecedences and outcomes of a total cost orientation. Econometric studies could examine the effects of a total cost orientation on financial performance. Scales could be developed to measure total cost orientation, and its dimensions, as well as related total cost constructs. Microeconomics and experimental economics could be used to understand how competition, uncertainty, and concentration affect total cost orientation. There is significant opportunity to improve our understanding of the total cost concept by employing well-known theories such as social exchange theory (Hofer et al. 2009), transaction cost economics (Tate et al. 2011), network theory (Autry and Griffis 2008), agency theory (Rungtusanatham and Rabinovich 2007), resource dependence theory (Hofer et al. forthcoming), and many other well-known theories. Application of such theories to the total cost concept will help us to better describe the meaning of the total cost concept and how it behaves within a nomological network. This will help our discipline to move more rapidly to addressing normative questions such as: Under which environmental conditions will the implementation of the total cost concept strongly impact firm or supply chain performance? Many of the mathematical models that have looked at total logistics costs assume that managers will be making rational decisions, but in reality they cannot even compute optimal solutions (Tokar et al. forthcoming) and are subject to a number of decision biases. To this end, we need behavior experiments (Knemeyer and Naylor 2011) to test hypotheses relevant to theory development in the area of the total cost concept. Behavior experiments could be used to test and develop theory around topics involving the total cost concept, such as: How do conflicts of interest affect the implementation of the total cost concept? How does perceived uncertainty affect motivation for minimizing total costs? How do various incentives affect implementation of the total cost concept? These types of research questions lend themselves well to behavioral experiments. Because there are a number of studies that focus on research questions that are related to the total cost concept, meta-analysis could be employed (Rabinovich and Cheon 2011) to analyze the relative importance of various costs on logistics performance across many studies. Using press releases on supply chain software implementation in conjunction with company annual reports, event studies (Rabinovich and Cheon 2011) could be employed to examine the impact of different types of software implementations (e.g., transportation planning, warehouse management, forecasting, material requirements planning, distribution requirements planning, scheduling, layout, etc.) on various costs, including the cost of goods sold. There are also many opportunities for the application of accounting theory as well as operations research. To minimize total costs, a firm must be able to measure those costs or at least to understand the general way in which the costs are affected by the decisions at hand. When one considers the barriers to accurate and comprehensive cost measurement, it becomes apparent that this alone could prevent actual and complete implementation of the total cost concept (Eroglu et al. forthcoming). There are four primary challenges to cost measurement: Nonstationary variables where stochastic models assume stationary variables. Complexity of measuring opportunity costs. Nonlinear and/or discontinuous costs. The cost of measuring costs. First, although most of our stochastic models assume stationarity, many of the causal variables, such as demand are often nonstationary. Dekimpe and Hanssens (1995) conducted a meta-analysis of 44 studies that included 180 sales time series and found that 68% were nonstationary. Second, opportunity costs are important and useful to measure, but they are very difficult to measure. For example, many times the weighted average cost of capital is used to measure the capital cost of holding inventory and the associated costs. However, a more accurate view of the cost of holding inventory considers profit that is foregone as a result of the capital not being available for the most profitable use because it was invested in inventory.2 Third, many costs have a different nature than existing models assume. Often, costs we treat as linear are actually nonlinear. Also, many costs are discontinuous and change their nature in various decision variables. For example, transportation costs increase the unit cost when order quantities involve LTL shipments. However, when they get to the point where they involve TL shipments, then they become an ordering cost. This is not too complex for a single item, but when a truck is carrying multiple SKUs, it is very complex. Suppose a retailer replenishes a set of stores from a given distribution center. Assume each store gets a TL per day. Sometimes the TL is not full but it is going every day regardless. In that case, the transportation cost cannot be assigned to a particular SKU because no particular SKU is causing the transportation cost. In effect, the daily truck to the store from the DC is essentially a store operations cost. Such a scenario can get even more complicated. For example, suppose that at some point additional SKUs are added to the store such that one truck is not enough. In that case, applying the total cost concept would require the cost to be assigned to the incremental increase in the assortment—it should affect the assortment decision. But merchandise managers may not be aware of the increase the transportation capacity required to increase the assortment. Even if they were aware of it, the merchandise manager may not be assessed by that cost and therefore might not be interested in measuring it. Costs such as transportation costs should be assigned to the cause of the cost, not simply divided over the number of units shipped. This is important if the goal is to minimize total costs, but application of the concept is complex. Fourth, measuring costs is not costless. The very act of measuring costs must be weighed against the benefits of measuring the costs. Measuring the costs requires employment of skilled and costly labor. Such labor must have an understanding of the economics of costs, including the concept of opportunity cost. It requires skill in cost accounting and finance. It may require some skills from industrial engineering, such as time motion studies. It also requires an understanding of the nature of the costs and business processes associated with transportation, warehousing, inventory control, customer service, order fulfillment, and more. Again, a key foundational concept of logistics is the total cost concept, yet, as we can observe from the previous discussion, even the measurement of the costs is challenging. Does that mean the total cost concept is not worthwhile? If some firms go further in cost measurement, do they perform better than the others? That is another worthwhile research topic that has yet to be explored, and the results would be relevant to the validity and implementation of the total cost concept. Of course, it is also clear from the above discussion that we need research on cost measurement. Creation of cross-functional teams of researchers may be productive to this end. Not only is measuring the costs difficult, but also modeling the costs is difficult. First, many times the costs have unknown relationships to their decision variables. For example, the extent to which adding an additional distribution center will affect all of the costs associated with distribution is not completely known. We can model how inbound and outbound transportation costs will change; we can model how inventory costs will change; and we can model how labor costs and other warehousing costs will change. But these are all based on current transportation costs, current labor rates, current opportunity costs, and so on. Our ability to forecast transportation rate changes is limited as is our ability to forecast changes in any of these variables. The costs can be difficult to model because they can be affected by so many exogenous factors and the fact that many of them are nonstationary. We would like to see topics that are fundamental to logistics and supply chain management addressed thoroughly in Journal of Business Logistics. Since the total cost concept of logistics has been a foundation of our discipline, we must develop and test theory relevant to the concept. We thank the following individuals for their helpful comments, edits, and input on earlier drafts of this manuscript: Adriana Hofer, Jason Arentz, Christian Hofer, and Christopher Vincent. Their input resulted in a significant improvement to the manuscript.