The systems approach is a critical concept in logistics. Logistics is, in itself, a system; it is a network of related activities with the purpose of managing the orderly flow of material and personnel within the logistics channel.
The systems approach is a simplistic yet powerful paradigm for understanding interrelationships. The systems approach simply states that all functions or activities need to be understood in terms of how they affect, and are affected by, other elements and activities with which they interact. The idea is that if one looks at actions in isolation, he or she will not understand the big picture or how such actions affect or are affected by, other activities. In essence, the sum of outcome of a series of activities is greater than its individual parts.
The systems approach is key to understanding the role of logistics in the economy, its role in the organization, including its interface with marketing, the total cost concept, and logistics strategy.