Design for logistics is a series of concepts in the field of supply chain management

Supply chain management

Supply chain management is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers...

 involving product and design approaches that help to control logistics costs and increase customer service level

Service level

Service level measures the performance of a system. Certain goals are defined and the service level gives the percentage to which they should be achieved...

s. These concepts were introduced by Professor Hau Lee of Stanford University

Stanford University

The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...

, and have the three key components: Economic packaging and transportation, Concurrent and parallel processing, and Standardization.

Economic packaging and transportation

There are three levels, moving from operational, to tactical and finally strategic.

1. Common sense: Product and packaging must be designed so it is easy to ship and shelf (for instance, Rubbermaid
   Rubbermaid
   Rubbermaid is an American manufacturer and distributor of many household items. It is a subsidiary of Newell Rubbermaid. It is most well known for producing food storage containers and trash cans...
   
    design that fits Walmart's 14x14 shelving). Making a product much stronger and more rugged than necessary for its normal function typically increases parts cost, but sometimes it lowers the net cost by reducing the cost of padding and protection for shipping.
2. Facilitate logistic function: Must be easy to pack and repack, and easy to track.
3. Enables efficient design of supply chain and business model: For instance, IKEA's supply chain and business model (flat packages etc.)

Concurrent and parallel processing

Modify the manufacturing process so that steps that were previously performed in a sequence can be completed at the same time. This will help reduce manufacturing lead time, lower inventory costs through improved forecasting, and reduce safety stock

Safety stock

Safety stock is a term used by logisticians to describe a level of extra stock that is maintained to mitigate risk of stockouts due to uncertainties in supply and demand. Adequate safety stock levels permit business operations to proceed according to their plans...

 requirements, among other benefits.

Standardization

The idea of standardization is to exploit economies of scale, and doing things once that can be applied many times. Standardization can be done through:

1. Parts: Where common parts are used in many different products
2. Process: Standardize manufacturing and product processes so that decisions about which specific product to manufacture can be delayed. This is in fact delayed differentiation
   Delayed differentiation
   Delayed differentiation or Postponement is a concept in supply chain management where the manufacturing process starts by making a generic or family product that is later differentiated into a specific end-product...
   
   .
3. Product: Also known as downward substitution. For instance, car rental companies frequently fill reservations with higher-end vehicles when the lower-end vehicles are not available.
4. Procurement: Standardize processing equipment and approaches that can be used for several products (for instance, one machine for both high and low end products).