Optimization of business processes in logistics. Optimization of logistics processes at the BNS Group OJSC enterprise. Logistics network diagram
Federal State Educational Institution of Higher Professional Education
Kaliningrad State Technical University
Department of Production Management
Course work
Logistic optimization of enterprise activities using the example of Sovlit LLC
Work completed
student of group 06-MO
Bajorinaite R.V.
Supervisor
Candidate of Economic Sciences, Associate Professor Parshina L.P.
Kaliningrad, 2010
Introduction
1. Technical and economic characteristics of Sovlit LLC
1.1 General information (historical background)
1.2 Dynamics of the main indicators of the enterprise’s activity
2. “Development of a logistics system based on Sovlit LLC”
2.2 Characteristics of material, financial and information flows
3. “Logistic optimization of the activities of Sovlit LLC”
3.2 Inventory logistics
3.3 Distribution logistics
3.4 Transport logistics
Conclusion
Bibliography
During the period of formation of market relations in Russia, a new scientific and practical direction appeared and began to actively develop - logistics. Interest in it is due to the needs of economic and business development and the increased volumes of freight traffic. Initially, firms' efforts were aimed mainly at reducing production costs. Nowadays, when supply everywhere has begun to exceed demand, entrepreneurs have also begun to recognize the importance of ensuring sales by reducing transport and storage costs. New principles of organization and management, based on conceptual approaches and methods of thinking, united by the general concept of “logistics”, are increasingly and successfully applied in practice by the most efficiently functioning enterprises, transport companies, firms and associations.
Currently, there are many types of logistics. Here are some of them:
Transport logistics (and road transport logistics in particular)
Warehouse logistics (warehousing logistics)
Commercial logistics
Information logistics
Marketing logistics
Purchasing logistics
Production logistics
Industrial logistics
Distribution logistics (distribution or sales logistics).
The increased interest in this science in both the global and Russian economies is due to a number of factors: the rapid increase in transportation costs, fundamental changes in the philosophy of inventories, the creation of product channels, the rapid development of computer technology, and the transition from the concept of a seller's market to the concept of a buyer's market.
Foreign experience shows that logistics plays a strategically important role in modern business. From a business perspective, logistics is understood as the effective management of material and related (information, financial, service) flows to achieve corporate goals with optimal expenditure of all resources. The introduction of logistics management methods into business practice allows firms to significantly reduce all types of product inventories in production, supply and, of course, sales, accelerate the turnover of working capital, reduce production costs and distribution costs, and ensure the most complete satisfaction of consumers in the quality of goods and services.
The purpose of the course work is to analyze management at an enterprise using modern logistics methods, logistics optimization of the enterprise’s activities, as a result of which the development of measures to improve the company’s work. The relevance of this topic lies in the fact that effective management in modern market conditions is a necessary condition for increasing business efficiency, creating , development and implementation of the competitive advantages of the enterprise. The subject of the study is the organization of management at the enterprise. The object of the study is Sovlit LLC. The main activity of the enterprise in question is the production of soft carbonated drinks, juice drinks, drinking water and sparkling mineral water.
1. “Technical and economic characteristics of Sovlit LLC”
1.1General information (historical background)
Limited Liability Company "Sovlit" was founded in June 1997. The general director of the enterprise is Sapozhnikov Andrey Vyacheslavovich. The company has an excellent business reputation and an extensive list of clients and completed projects. The successful development of cooperation between Sovlit LLC and regular customers is facilitated by a flexible pricing policy and an individual approach to each partner. The main criteria when choosing products supplied by the company are their reliability. This approach, combined with highly qualified specialists, allows us to solve problems of any complexity. Sovlit LLC uses professional experience accumulated by leading specialists, and also relies on proven and promising technologies.
The activity of the enterprise is characterized not only by constantly growing sales volumes, increasing profitability and net profit, replenishment and modernization of fixed assets, but also by a competent, targeted personnel policy focused on the selection of qualified personnel. Almost all employees of the administrative and managerial apparatus and more than half of the production staff of Sovlit LLC have been working since its inception, have qualifications corresponding to their positions and practical experience in the field of high technologies
The main activity is the production and sale of carbonated soft drinks, juice drinks, drinking water and sparkling mineral water. Production equipment is located on our own premises. There are equipped warehouses for raw materials and for stock of finished products.
Location of Sovlit LLC: 238750, Sovetsk, Nekrasova St., 4. Sovlit LLC uses the professional experience accumulated by leading specialists, and also relies on proven and promising technologies, and develops new non-standard solutions.
Sovlit LLC is a dynamically developing company aimed at increasing the volume of sales of goods, works and services.
The enterprise independently plans its production, economic, financial and other activities on the basis of contracts or other forms of obligations, and is free to choose their subject, the order of economic relationships and determine the responsibility of the contracting parties for their obligations.
The enterprise operates on the basis of the principle of full self-financing, self-financing and self-sufficiency, carries out independent accounting of work results, maintains operational accounting and statistical records, and controls in the manner established by the legislation of the Russian Federation.
The company's activities are characterized by a competent, targeted personnel policy focused on the selection of qualified personnel. Almost all employees of the administrative and managerial apparatus and more than half of the production personnel of Sovlit LLC have been working since its creation, have qualifications and practical experience corresponding to their positions.
Table 1. - Main economic indicators of Sovlit LLC in 2008-2009.
Indicators |
thousand roubles |
thousand roubles |
Abs. off thousand rubles | Relates. off,% |
| 1. Revenue, t.r. | 18710 | 19566 | +856 | 104,6 |
| 2. Profit from the sale of goods, etc. | 6885 | 7885 | +1000 | 114,5 |
| 3. Average annual value of property, t.r. | 283 | 226 | -57 | 79,9 |
| 4. Capital productivity, t.r./t.r. | 24,40 | 48,58 | +24,18 | 199,1 |
| 5.Profitability of sales,% | 61,6 | 71,8 | 10,2 | 116,6 |
| 6.Volume of goods sold, etc. | 11174 | 10980 | -194 | 98,3 |
Thus, from this table we can conclude that the company’s condition has improved and this is evidenced by the dynamics of the following indicators:
· revenue increased by 856 thousand rubles;
· capital productivity increased by 199%;
· sales profitability increased significantly by 16.6%;
1.3 Characteristics of the organizational structure of Sovlit LLC
The enterprise has a linear-functional management structure, when the company is managed not only from the center, but also directly at the workplace: in each economic division of the enterprise there are carefully selected personnel who coordinate the work of a particular entity in accordance with the general strategy of the company.
General management of the company's activities is carried out by the general director. His direct subordination includes the chief technologist, commercial director, chief accountant, chief economist, and deputy director for general issues. The organizational management structure of Sovlit LLC is presented in the diagram in Fig. 1.
Fig.1. Organizational management structure of Sovlit LLC.
The main production process is carried out under the leadership of the chief technologist, who is subordinate to specialists who directly carry out the production of commercial products at two production sites - a site for the production of soft carbonated drinks, juice drinks and mineral carbonated water, a site for the production of drinking water. The chief technologist ensures control over the work, also monitors the quality of finished products, and organizes control over the quality of raw materials, materials, and semi-finished products supplied to the enterprise.
The sales of the company's products are managed by the commercial director, who is subordinate to the sales department and the advertising department. The responsibilities of the sales department employees include concluding contracts for the supply of products, forming a portfolio of orders for certain types of products for specific customers, monitoring the implementation of deliveries and payment for products delivered to consumers. The responsibilities of the advertising department employees are to conduct marketing research, develop forms, methods and means of sales promotion, develop and implement an advertising campaign.
The accounting process is carried out under the guidance of the chief accountant of the enterprise. The chief accountant is responsible for developing accounting policies, maintaining accounting records, and timely submission of complete and reliable financial statements. The accounting department is subordinate to the chief accountant.
Accounting maintains all synthetic and analytical accounting on the basis of primary and consolidated documents coming from individual divisions of the organization, records the enterprise's funds and business transactions with material and monetary resources, and establishes the results of the financial and economic activities of the enterprise. In the divisions themselves, only the initial registration of business transactions is carried out.
Under the leadership of the chief economist of the enterprise, the planning, analytical and financial activities of the company are carried out. The chief economist leads the work on planning and economic stimulation at the enterprise, increasing labor productivity, identifying and using production reserves, improving the organization of production, labor and wages, and organizing in-plant cost accounting. The planning and economic department reports to him.
The economic planning department, under the leadership of the chief economist, develops the economic policy of the enterprise, calculates the profitability of sales and determines the cost of repair work, develops annual and quarterly plans for the enterprise and individual workshops, monitors their implementation, determines ways to eliminate deficiencies, organizes and improves in-plant and intra-shop planning, develops standards for the formation of economic incentive funds, maintains operational statistical records and submits projects and prices for new products for approval, studies and implements best practices in organizing economic planning work.
The responsibilities of the deputy director for general issues include providing the enterprise with qualified workers, organizing the supply of production with materials and equipment, and ensuring the general functioning of the enterprise.
A linear-functional structure best meets the needs of producing a small range of products, subject to their close technological interdependence. This is exactly the kind of production that is carried out at Sovlit LLC. Therefore, the presence of an effective organizational structure has a positive effect on the activities of the enterprise.
1.4 Assessment of the feasibility of reorganizing the organizational structure and the possibility of establishing a single logistics service
In modern conditions, a process of disintegration has occurred in a number of large industrial organizations, the result of which has been the fragmentation of management functions of a single technological process. The activities of numerous supply participants are not coordinated by a single management body, and each of these divisions does not bear responsibility for the final results of joint work. In this regard, the current conditions for organizing material and technical supply are closely related to the strengthening of integration processes in the supply chain, which determine a change in the functions of managing economic flows based on the formation of a logistics center.
The creation of a logistics center in Sovlit LLC is carried out by forming an organizational and functional structure based on the delegation of part of the functions of planning, organization and control to the information and logistics department of the logistics center, which carries out the formation and coordination of supply chains of construction materials through information exchange between all participants in the supply and concentration process regulatory functions within a single logistics division.
The basis of internal organizational and functional interaction between divisions of the logistics center is the provision of information exchange between linear, production services, management staff and the information and logistics department, which allows for coordination and control over the movement of material and other flows in the supply process (Fig. 2).
Rice. 2. Internal organizational and functional interaction of participants in the logistics center.
The external logistics contour for organizing interaction between the information and logistics department and other supply chain participants is presented in Fig. 3. Information interaction between the logistics department and production units of the logistics center, management staff, as well as other supply chain participants is two-way in nature, determining the presence of feedback that allows the information and logistics department to control and coordinate each logistics operation.
Rice. 3. The mechanism of external information interaction between the logistics center and supply chain participants.
Therefore, from all of the above, we can imagine a new organizational structure of Sovlit LLC
Rice. 4. Organizational structure of Sovlit LLC after the introduction of the logistics service
Such sections as the sales department and the supply department were eliminated from the organizational structure. Now they have been reorganized into a single department - the logistics service.
1.5 Composition of the main functions of the logistics service
As already mentioned, the logistics service now includes departments such as the supply department and the sales department of commercial products.
The sales of the company's products are managed by the commercial director, who is subordinate to the logistics service (sales department and supply department) and the advertising department. In charge sales department products include:
1. Implementation of rational organization of sales of the enterprise's products, their delivery to consumers on time and in volume in accordance with orders and concluded contracts. 2. Providing the department with the preparation of forecasts, drafts of long-term and current plans for production and sales of products, conducting marketing research to study the demand for the company's products, prospects for the development of sales markets. 3. Organization of preparation and conclusion of contracts for the supply of products to consumers, coordination of delivery terms. 4. Leads the work on drawing up supply plans and linking them with production plans in order to ensure the delivery of finished products by production departments on time, in terms of product range, completeness and quality in accordance with orders and concluded contracts. 5. Takes measures to implement the product sales plan, timely receipt of orders, specifications and other delivery documents. 6. Provides control over the fulfillment of orders, contractual obligations by business units, and the status of finished product inventories in warehouses. 7. Organizes the acceptance of finished products from production departments to warehouses, rational storage and preparation for shipment to consumers, determining the need for vehicles, mechanized loading equipment, containers and labor for shipping finished products. 8. Carries out the development and implementation of enterprise standards for organizing the storage, sale and transportation of finished products, as well as measures to improve the sales network, forms of delivery of products to consumers, reducing transport costs, reducing excess balances of finished products and accelerating sales operations. 9. Takes part in the organization of exhibitions, fairs, sales exhibitions and other events for advertising products. 10. Organizes wholesale trade of products manufactured by the enterprise. 11. Takes measures to ensure timely receipt of funds for sold products. 12. Participates in the consideration of consumer claims received by the enterprise and the preparation of responses to the claims brought, as well as claims to consumers and their violation of the terms of contracts. 13. Ensures accounting of the fulfillment of orders and contracts, shipment and balances of unsold finished products, timely execution of sales documentation, preparation of the required reporting on sales (supplies), on the implementation of the implementation plan. 14. Coordinates the activities of finished product warehouses and manages department employees.
The main functions (responsibilities) of the supply department, part of the logistics department:
1. Develops enterprise policy on logistics issues. 2. Manages the development of projects for long-term, current plans and balances of material and technical support for the production program. 3. Participates in the calculation of production inventory standards based on determining the needs for material resources (raw materials, materials, semi-finished products, equipment, components, etc.). 4. Manages the development and implementation of programs to continuously provide the enterprise with the material and technical resources necessary for production. 5. Searches for suppliers, focusing on the quality of the proposed material and technical resources, price, delivery time, favorable delivery conditions. 6. Develops relationships with suppliers, analyzes their production and financial capabilities, studies the possibility and feasibility of establishing direct long-term economic relations for the supply of material and technical resources. 7. Prepares and corrects pre-contractual documentation. 8. Conducts negotiations with suppliers to place orders and agree on delivery terms and conditions. 9. Concludes contracts with suppliers. 10. Organizes the study of operational marketing information and advertising materials about the offers of small-scale wholesalers and wholesale fairs in order to identify the possibility of purchasing material and technical resources through wholesale trade, as well as purchasing material and technical resources sold on a free sale basis. 11. Ensures the delivery of material resources from suppliers and sellers in accordance with the terms and conditions stipulated in the contracts. 1 2. Organizes the processing of supplies of material and technical resources (acceptance by quantity and completeness, quality identification, preparation of the necessary acceptance documentation, internal movement to storage areas or production units of the enterprise). 13. Prepares claims against suppliers in case of violation of contractual obligations, controls the preparation of settlements for these claims, and coordinates with suppliers changes in the terms of concluded contracts. 14. Periodically evaluates the terms of existing contracts for the quality of fulfillment of obligations by suppliers in order to make decisions on finding new suppliers and changing schemes for working with suppliers. 15. Organizes control over the state of inventories of material and technical resources, operational regulation of production inventories at the enterprise, compliance with limits on the supply of material resources and their expenditure in the divisions of the enterprise for their intended purpose. 16. Manages the development and implementation of measures to: - increase the efficiency of use of material and technical resources; - reducing costs associated with transportation and storage of material and technical resources; - improving the control system over the consumption of material and technical resources; - identifying and selling surplus material and technical resources. 17. Develops proposals for replacing expensive material and technical resources with more affordable ones in terms of price and acquisition capabilities, but at the same time precisely meeting quality requirements. 18. Coordinates the development and maintenance of procurement databases containing operational information necessary to determine the needs for material and technical resources, sources of procurement, procurement costs, etc. 19. Organizes the preparation of: - requests for material and technical resources (consolidated annual, annual, quarterly, monthly); - acts, conclusions on the quality of incoming material and technical resources.
2.1 Development of a logistics system
Logistics system diagram
The logistics system of Sovlit LLC is echeloned (multi-level) . This is a system in which the material flow is brought to the consumer with the participation of at least one intermediary.
Sovlit LLC produces its goods, then the process of selling the products to regular customers takes place (they are the intermediaries in this logistics system), then intermediary companies bring the goods of Sovlit LLC to the final consumer
Rice. 5. Logistics system diagram
Logistics network diagram
The logistics network of Sovlit LLC consists of many links:
1. Suppliers.
2. Production.
3. Finished products warehouse (distribution center).
4. Intermediary companies: “Klaipeda”, “FART”, “Vester”, “Victoria”, “Seventh Continent” and others. They also have their own transport, which delivers Sovlit LLC products to the end consumer.
The diagram of the logistics network is presented in Fig. 6.
Rice. 6. Logistics network diagram
The supply chain diagram is shown in Figure 6a.
Rice. 6a Supply chain diagram
Properties of the logistics system
Any logistics system has certain general features that must be taken into account.
It is very important to control the integrity (compartmentality) of the logistics system. All Sovlit divisions are presented as a set of elements interacting with each other. Elements exist only in the system, complementing each other. They perform different functions, but pursue a single goal, promoting the product to the consumer. Outside the system, these are only objects that have the potential ability to form a system.
Only coordinated activities and clearly assigned responsibilities will help achieve the expected result.
There are significant connections between the elements of the logistics system that determine the integrative qualities of the system. The company's internal production relations must be more powerful than the divisions' relations with the external environment.
The connections of all departments are ordered in a certain way, all activities are organized. There is a clear hierarchy; all intra-production relations are formed from the subordination of elements of a lower level to a higher one (this can be seen based on the organizational structure of the enterprise).
And finally, the entire system has integrative qualities that are not characteristic of any of the units separately - emergence. Thanks to this property of the system, the company can deliver the right product at the right time, in the right place, of the required quality, at minimal cost, and also adapt to changing environmental conditions (changes in supply and demand).
The integrative qualities of the Sovlit logistics system allow it to purchase materials, pass them through its production facilities and release them to the external environment, while achieving predetermined goals.
The main goal of logistics is to ensure a competitive position of a business organization in the market. Logistics achieves this by managing flow processes based on rules: Delivery at minimal cost of products of appropriate quality and appropriate quantity required by a specific buyer at the right time and to the right place (7 rules of logistics).
The integration of logistics operations into logistics functions primarily depends on the type of logistics system, i.e. a set of functional subsystems in a specific logistics system.
LLC "Sovlit"
Fig.8. Internal material flows
The material flow flowing in the environment external to the company, that is, the material flow from the supplier to the enterprise and from the enterprise to the consumer, is an external material flow.
The input material flow enters the logistics system from the external environment, from the supplier. The output material flow comes from the logistics system to the external environment, to the consumer.
When maintaining the enterprise's inventories at the same level, the input material flow will be equal to the output.
In terms of natural-material composition and quantitative characteristics, the material flow at the Sovlit enterprise is represented by medium, and sometimes large wholesale supplies of a multi-product group of goods.
By consistency, everything is found; material flows are presented in packaged - piece form.
A material flow that is without movement becomes a stock. That is, such a material flow is not continuous in time, it is a discrete material flow.
All actions applied to material flows are called logistics operations or functions, logistics activities.
As for information and financial flows, elementary logistics activity is represented by the collection, storage and transmission of information about material flow, settlements with suppliers and diggers, etc.
The central control system does not interfere with the exchange of material flows between different sections of the enterprise and does not set current production targets for them.
The production program of an individual technological link is determined by the order size of the subsequent link. The central control system poses a task only to the final link of the production technological chain.
Thus, the material flow is “pulled out” by each subsequent link. Moreover, the personnel of a separate unit are able to take into account many more specific factors than a central management system could do.
2.3 Characteristics of logistics operations (activities)
All actions applied to material flows are called a logistics operation or function (logistics activity).
Elementary logistics activities include such actions as loading and unloading goods at an intermediate warehouse, transshipment from one type of transport to another if necessary, sorting, labeling goods directly to the enterprise, etc.
Unloading and receiving (supply of raw materials and materials)
When carrying out these operations, Sovlit LLC is guided by the delivery terms of the concluded contract. Accordingly, unloading sites are prepared for the specified vehicle (trailer, truck) and the necessary loading and unloading equipment. Unloading is carried out at unloading vehicle ramps and container sites. Special equipment for unloading sites on the territory of Sovlit LLC and the correct choice of loading and unloading equipment allow for efficient unloading (in the shortest possible time and with minimal cargo losses).
Operations carried out at this stage include:
· unloading of vehicles,
· control of documentary and physical compliance of delivery orders,
· Documentation of arrived cargo through the information system,
· formation of a warehouse cargo unit.
Protective packaging
The movement of a product from producer to consumer is an inevitable prerequisite for the realization of its use value. At the same time, it is important to ensure complete safety of the quantity, quality and presentation of products along the entire route.
In the distribution processes of manufacturers' finished products, protective packaging plays an important role. In order to protect products from mechanical, climatic, biological and other influences and ensure their high-quality safety during transportation and storage, Sovlit LLC uses packaging. Along with its main function - to ensure the safety of the packaged goods - the container also performs others. It helps speed up the transfer of inventory from manufacturers to consumers: facilitates the movement of products during loading and unloading operations and intra-warehouse operations: improves accounting and organization of product sales; increases the efficiency of using vehicles and storage facilities.
Warehousing and storage
The warehousing and storage process includes:
A) placing cargo for storage,
b) storage of cargo and provision of appropriate conditions for this,
V) control over the availability of stocks in the warehouse, carried out
through the information system.
Warehousing of Sovlit LLC inventories takes place in the distribution center (warehouse). One responsible person is responsible for it, who keeps track of inventory. It should also be noted that the warehouse is rationally located on the territory of Sovlit LLC and thereby ensures its greatest functional efficiency.
Order picking and shipment
The picking process comes down to preparing goods in accordance with consumer orders.
Order picking and shipment include:
a) receiving a customer order (selection sheet),
b) selection of goods of each name according to the client’s order,
c) packaging of selected goods for a specific client in accordance with his order,
d) preparing the goods for shipment (placing them in containers on a carrier),
e) documentation of the prepared order and control over the preparation of the order,
f) combining customer orders into a shipment and issuing delivery notes,
g) loading of goods into a vehicle.
Commissioning of customer orders is carried out in the picking area. Preparation and execution of documentation is carried out through the information system. The address storage system allows you to indicate the location of the selected goods on the selection sheet, which significantly reduces the selection time and helps track the release of goods from the warehouse.
When packing a shipment, the information system makes it easier to perform the function of combining cargo into an economical shipment, allowing maximum use of the vehicle. In this case, the optimal route for order delivery is selected. The shipment is carried out at the loading ramp (the requirements for efficient loading are similar to the requirements for unloading).
Sales
The company’s sales strategy is based on individual work with each client, the implementation of a full range of work, starting from the “project” stage and ending with the signing of a work completion certificate. The company is constantly working to attract corporate clients, using various methods of stimulating sales: seasonal discounts, sending out certificates for VIP clients entitling them to a 5% discount, holding lotteries and drawings with prizes.
If price competition arises, steps are taken to reduce prices for supplied products.
In its activities, the company focuses not only on corporate clients, among whom it has long and firmly won the image of a reliable partner, but also on the segment of small and medium-sized clients, as well as individuals.
Wholesale sales account for 80% of total sales. To date, the company has regular customers who make regular wholesale purchases of products produced by Sovlit LLC. Subject to stability of purchases, product sales in the amount of 3,600 units daily (about 900 thousand units per year) are guaranteed.
Thus, the enterprise has a guaranteed market for its products.
Transportation and forwarding of orders
Transportation and forwarding of orders can be carried out both by the warehouse and by the customer himself (in our case, the clients of Sovlit LLC themselves transport the goods). The last option is justified, because orders are carried out in batches equal to the capacity of the vehicle, without increasing the consumer's inventory. With this transportation option, Sovlit LLC achieves a significant reduction in transportation costs.
Information and computer services for the warehouse
Modern logistics systems cannot function without information and computer support, including Sovlit LLC.
Information and computer services for a warehouse involve managing information flows and are the connecting core of the functioning of all warehouse services.
Information services at Sovlit LLC cover:
· processing of incoming documentation,
· proposals for orders from suppliers,
· placing orders from suppliers,
· management of receiving and sending,
· control of cash in the warehouse,
· Reception of consumer orders,
· preparation of shipping documentation,
· dispatch assistance, including optimal batch selection
shipments and delivery routes,
· processing customer invoices,
· exchange of information with operational personnel and top management
hierarchical level,
· various statistical information.
Inventory Management
Inventory management of material resources and finished products is the process of creating control and regulation of inventory levels in the supply, production and marketing of products. If the space factor is decisive during transportation, then the time factor is crucial when managing inventory. Usually there is always a certain need for stocks of material resources and production on the one hand and between production and the consumer of finished products on the other. Reducing the risks of a shortage of material resources in the production process or unsatisfied consumer demand for finished products, inventories at the same time play a negative role in the economy, freezing the financial resources of organizations in large volumes of inventory. Therefore, the most important task of logistics management at Sovlit LLC is to optimize inventory levels in logistics chains and systems while ensuring the required level of customer service. The high costs of creating and maintaining inventory levels, ranging from 20% to 60% of total logistics costs, further emphasizes the importance of this key logistics function. The order procedure management function determines the receipt and processing of inventory, the timing of receipt of finished products or the provision of services to the consumer, and also initiates the work of the corporate distribution network or logistics intermediaries for the delivery and sale of finished products to consumers. Although the costs of this key logistics function are not as high as transportation or inventory management, its importance in modern business is very high, since it directly determines the quality of customer service.
Providing service
Service work, i.e. to satisfy someone's needs is called a service.
To ensure the coordination of the activities of the sales service, the operations of monitoring the fulfillment of orders and the provision of services to customers, on the implementation of which the level of service depends, are primarily aimed.
Successfully provided logistics services to customers can easily become the most important, and also a strategic feature that distinguishes a given company from its competitors.
3.1 Procurement (purchasing) logistics
Purchasing logistics resolves all issues related to the logistics of the enterprise and the preparation of products for industrial consumption.
Sovlit LLC, like any enterprise, includes a service that purchases, delivers and temporarily stores raw materials and semi-finished products.
The supply service establishes economic relations with suppliers, coordinating technical, technological, economic and methodological issues related to the supply of goods. Working in contact with the supplier's sales services, the supply service ensures the operation of the enterprise on the macro-logistics system.
Selecting a supplier is one of the most important tasks of a company. The choice of supplier is significantly influenced by the results of work under already concluded contracts, based on the implementation of which the supplier’s rating is calculated. Before calculating the rating, it is necessary to determine on the basis of what criteria the decision on the preference of a particular supplier will be made. As a rule, price, quality and reliability of supply are used as such criteria.
The next step in solving the problem of choosing a supplier is to evaluate suppliers according to the intended criteria. In this case, the weight of one or another criterion in their totality is determined by expert means.
Sovlit LLC has two alternative suppliers of preforms, one of which is located in Lithuania “KLAIPEDA” (supplier No. 1), the other in the city of Kaliningrad “FART” (supplier No. 2).
Table 2 shows the calculation of the choice of supplier based on actual performance results.
Table 2 Selection of supplier based on actual performance results
Table 2a - Dynamics of supply of goods of inadequate quality
Table 2b - Dynamics of violations of established delivery dates
1. Calculation of the average time rate of price growth:
T ts = ∑ T ts i x d i, Where
T ts i - price growth rate for the i-th product
d i - share of the i-th product in the total volume of supplies of the current period
n– number of product varieties
T ts i = ( P i 1 / P i 0 ) * 100, where
P i 1 -price of the i-th product in the current period
P i 0 - the price of the i-th product in the previous period
d i = ( S i / ∑ S i ), Where
S i– the amount of the i-th product in the current period (rub.)
∑ S i – total supply
Let's calculate the average annual price growth rate:
Supplier #1:
Product A : T ts i = 16 / 15 * 100 = 106,7
d i = 16 * 1500 / (16*1500+10*1400+8*10000+10*9000) = 0,12
Product B : T ts i = 10 / 9 *100 = 111,1
d i = 10 * 1400 / (16*1500+10*1400+8*10000+10*9000) = 0,07
Product B : T ts i = 8 / 10 *100 = 80
d i =8 * 10 000 / (16*1500+10*1400+8*10000+10*9000) = 0,38
Product G : T ts i = 10 / 12 * 100 = 83,3
d i = 10 * 9000 / (16*1500+10*1400+8*10000+10*9000) = 0,12
T ts = (106,7 * 0,12) + (111,1 * 0,07) + (80 * 0,38) + (83,3 * 0,12) = 60,9
Supplier #2:
Product A : T ts i = 13 / 12 * 100 = 108,3
d i = 13 * 9000 / (13*9000+10*12000+11*10000+12*11000) = 0,24
Product B : T ts i = 10 / *100 = 125
d i = 10 * 12000 / (13*9000+10*12000+11*10000+12*11000) = 0,25
Product B : T ts i = 11 / 7 *100 = 157,1
d i =11 * 10 000 / (13*9000+10*12000+11*10000+12*11000) = 0,23
Product G : T ts i = 12 / 9 * 100 = 113,3
d i = 12 * 11000 / (13*9000+10*12000+11*10000+12*11000) = 0,28
T ts = (108,3 * 0,24) + (125 * 0,25) + (157,1 * 0,23) + (113,3 * 0,28) = 125,3
1. Calculation of the growth rate of supply of defective goods:
T b R = ( d b R 1 / d b R 0 ) * 100 , Where
d b R 1 – the share of defective goods in the total volume of supplies of the current period
d b R 0 – the share of defective goods in the total volume of supplies of the previous period
Supplier #1:
January: 120 / 9000 * 100 = 1.333
February: 220 / 21900 * 100 = 1.005
T b R = 1,005/1,333 *100 = 75,39
Supplier #2:
January: 390 / 31000 * 100 = 1.258
February: 530 / 42000 * 100 = 1.262
T b R = 1,262 / 1,258 * 100 = 100,32
2. Calculation of the growth rate of average lateness:
T O P = ( ABOUT Wed 1 / ABOUT Wed 0 ) * 100 , Where
ABOUT Wed 1 = average delay per delivery in the current period (days)
ABOUT Wed 0 = average delay per delivery in the previous period (days)
Supplier #1:
January: 28 / 10 = 2.8
February: 31/9 = 3.4
T O P = 3,4 / 2,8 * 100 = 121,43
Supplier #2:
January: 43 / 12 = 3.6
February: 34 / 15 = 2.3
T O P = 3,6 / 2,3 * 100 = 156,52
| Index | Indicator weight | Supplier rating for this indicator | Product evaluation by weight | ||
| Supplier #1 | Supplier No. 2 | Supplier #1 | Supplier No. 2 | ||
| 0,5 | 60,9 | 125,3 | 30,45 | 62,65 | |
| Quality | 0,3 | 75,39 | 100,32 | 22,62 | 30,1 |
| Reliability | 0,2 | 121,43 | 156,52 | 24,29 | 31,3 |
| Supplier rating | 77,36 | 124,05 | |||
Conclusion: The second supplier has a high rating for poor performance. It follows that Supplier No. 1 (KLAIPEDA company) is more reliable, because his overall rating is lower. It is with this supplier that the contract should be renegotiated.
3.2 Inventory logistics
Enterprise inventory management
The main tasks of inventory logistics are: determining the optimal volume of the ordered batch, choosing a method for managing inventory.
The growth of an enterprise's need for material resources can be satisfied extensively (by purchasing or producing more materials and energy) or intensively (more economically using existing reserves in the production process).
At the Sovlit LLC enterprise, there is no targeted approach to the formation and storage of reserves. There is also a shortage of raw materials during the seasonality of the consumption process, i.e. it is necessary to establish relationships with regular suppliers of material resources. The need for additional personnel in the logistics department. The main problem can be called a shortage or, conversely, an excess of inventories, thus, the task of optimizing material inventories becomes very relevant, because underestimated inventories of material resources can lead to losses associated with downtime, unsatisfied demand and, consequently, loss of profit, as well as loss of potential buyers of products; and on the other hand, the accumulation of excess material reserves ties up the working capital of the enterprise, reducing the possibility of its profitable alternative use and slowing down its turnover, which is reflected in the value of total production costs and the financial results of the enterprise. Economic damage is caused by both the significant presence of reserves and their insufficient quantity. The relevance of the problem of optimizing an enterprise's material reserves and effectively managing them is due to the fact that the state of inventories has a decisive influence on the competitiveness of the enterprise, its financial condition and financial results. It is impossible to ensure a high level of product quality and reliability of its supply to consumers without creating an optimal amount of stock of finished products, as well as stocks of raw materials necessary for the continuous and rhythmic functioning of the production process.
Solving the problem of increasing the efficiency of inventory management in the modern economic environment requires a transition from traditional management methods to logistics, which makes it possible to include inventory management as part of the main directions of the company’s actively implemented strategy for its market behavior.
In this regard, the creation of methodological tools that make it possible to quantify, analyze and predict various options for forming an inventory management strategy is of particular relevance.
Assortment differentiation using the ABC method (Pareto diagram)The idea of the ABC method is to select the most significant from the point of view of the designated goal from the entire set of objects of the same type. Such objects, as a rule, are few in number, and it is not them that the main attention and efforts need to be concentrated.
The ABC method (Pareto diagram) allows, in accordance with specified criteria, to select 3 groups of ABC goods in the general nomenclature for the purpose of selective management of inventories of these goods.
Group “A” includes elements of the highest importance according to the selected criterion: 20% of the product gives 80% of the result.
Group “B” includes elements of medium importance: 30% of the product gives 15% of the result.
Group “C” includes the remaining products: 50% of the product gives 5% of the result.
ABC analysis algorithm:
1. The consumption of goods for a certain period is taken.
2. Goods are distributed in descending order of their consumption.
3. Consumption is calculated on an accrual basis.
4. The percentage of the amount of consumption of each product relative to the total accumulated consumption is determined.
5. A graph is being built.
Let's apply this type of analysis to the Sovlit LLC enterprise. The ABC analysis is presented in Table 3.
| Primary list | Ordered list | Group A, B, C | ||||||
| Item no. | Product name | Annual product sales | Item no. | Annual product sales | Share of position in total volume, % | Cumulative share, % | ||
| 1 | Pinocchio (1.5l) | 10 000 | 10,55 | 9 | 18 000 | 18,99 | 18,99 | A |
| 2 | Lemonade (1.5l) | 9 500 | 10,02 | 10 | 17 800 | 18,78 | 37,77 | A |
| 3 | Duchess (1.5l) | 8 900 | 9,39 | 1 | 10 000 | 10,55 | 48,32 | A |
| 4 | Orange (1.5l) | 7 670 | 8,09 | 2 | 9 500 | 10,02 | 58,34 | A |
| 5 | Kvass Zamoskvoretsky (1.5l) | 7 980 | 8,42 | 3 | 8 900 | 9,39 | 67,73 | A |
| 6 | SSN “Pineapple” (2l) | 4 400 | 4,63 | 5 | 7 980 | 8,42 | 76,15 | A |
| 7 | SSN “Cherry” (2l) | 4 950 | 5,22 | 4 | 7 670 | 8,09 | 84,24 | IN |
| 8 | Mineral water (0.5l) | 5 600 | 5,91 | 8 | 5 600 | 5,91 | 90,15 | IN |
| 9 | Drinking water (3l) | 18 000 | 18,99 | 7 | 4 950 | 5,22 | 95,37 | WITH |
| 10 | Drinking water (5l) | 17 800 | 18,78 | 6 | 4 400 | 4,63 | 100 | WITH |
| Total : | 94 800 | |||||||
Let's construct the ABC curve in the coordinate system. The graph is shown in Figure 9.
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9 10 1 2 3 5 4 8 7 6 number
goods
A B C
Rice. 9. Distribution of goods using the ABC method
Group A products are the most important products that account for the majority of the money invested in inventories. Inventory levels for item A are constantly monitored, accurately determining the costs associated with purchasing, delivery and storage, as well as the size and timing of the order.
The graph shows that the group "A" hit, i.e. The following products give 80% of the results:
1. Drinking water (5l)
2. Drinking water (3l)
3. Pinocchio (1.5 l)
4. Lemonade (1.5l)
5. Duchess (1.5 l)
6. Kvass Zamoskvoretsky (1.5l)
To the group "IN" hit, i.e. The following products give 15% of the result:
1. Orange (1.5l)
2. Mineral water (0.5l)
They were included in group “C”, i.e. The following products give 5% of the result:
1. SSN “Pineapple” (2l)
2. CCH “Cherry” (2l)
Assortment differentiation using the XYZ method
Differentiation of the product range using the XYZ method is carried out depending on the degree of uniformity of demand and forecasting accuracy. The sign on the basis of which goods are divided into groups X, Y, Z is the demand variation coefficient, determined for each assortment item.
The coefficient of demand variation for individual assortment items (υ) is calculated using the formula.
where, xi is the i-th value of demand for the position being evaluated;
x – average quarterly demand for the position being assessed;
n is the number of quarters for which the assessment was made.
Procedure for performing XYZ analysis:
1. Determination of coefficients of variation for individual assortment items.
2. Grouping of control objects in order of increasing coefficient of variation.
3.Construction of an XYZ analysis curve.
4. Dividing the set of control objects into three groups: group X, group Y, group Z..
The calculation of the demand variation coefficient is shown in Table 4. The XYZ curve graph is shown in Figure 10.
Group X includes goods for which demand is uniform or subject to slight fluctuations. The sales volume for goods included in this group is well predictable.
To the group "X" hit, i.e. located in the interval 0 ≤ υ< 10%:
1. Drinking water (3l)
2. Drinking water (5l).
Group Y includes goods that are consumed in fluctuating volumes. In particular, this group may include goods with a seasonal nature of demand. The ability to forecast demand for goods of group Y is average.
To the group "Y" hit, i.e. located in the interval 10 ≤ υ< 25%:
1. Mineral water.
To the group " Z" included goods for which demand arises only sporadically. It is difficult to predict the volume of sales of goods from group Z.
To the group "Z" hit, i.e. located in the interval 25% ≤ υ< ∞:
1. Pinocchio
2. Lemonade
4. Orange
5. Kvass Zamoskvoretsky
6. CCH “Pineapple”
7. CCH “Cherry”
Let's build the ABC–XYZ matrix
Table 4a - ABC–XYZ matrix
| AX9, 10 | BX- | CX9, 10 |
| AY- | BY8 | CY- |
| AZ1, 2, 3, 5 | BZ7 | CZ- |
Table 4b
ABC–XYZ matrix value
| A | B | C | |
| X | AX: High turnover rate |
BX: Average turnover rate High predictability of demand |
CX: Low turnover rate High predictability of demand |
| Y | AY: High turnover rate |
BY: Average turnover rate Average Demand Predictability |
CY: Low turnover rate Average Demand Predictability |
| Z | AZ: High turnover rate Low predictability of demand |
BZ: Average turnover rate Low predictability of demand |
CZ: Low turnover rate Low predictability of demand |
Conclusions: For product items included in the groups AX, AY, AZ, an individual inventory management technology is selected.
For example, for products in the AX group, the optimal order size should be calculated and monitored daily. For group AY, the period between checks should be increased.
Inventory management of goods included in the groups BX, BY, BZ can be carried out both individually and equally across groups; only planning dates and delivery methods change.
Inventory management of goods included in the groups CX, CY, CZ can be carried out using longer periods.
Thus, to such products as Drinking water 3l. (No. 9) and Drinking water 5l. (No. 10) you should apply both a management strategy, including calculation of the optimal order size and daily control, and inventory management using longer periods.
For products: Pinocchio 1.5l. (No. 1), Lemonade 1.5 l. (No. 2), Duchess 1.5 l. (No. 3), Kvass Zamoskvoretsky 1.5 l. (No. 5) a management strategy should be applied, including individual inventory management technology.
Products: Mineral water 0.5 l. (No. 8), CCH “Cherry” 2l. (No. 7) a management strategy should be applied, including managing inventory of goods both individually and equally in groups; only the planning terms and delivery methods change.
3.3. Distribution logistics Analysis of the enterprise's product distribution system
The distribution system used by the enterprise has only one distribution center - a warehouse for finished products. Rice. 11. Material flow distribution scheme It should be noted that the warehouse network through which material flow is distributed is a significant element of the logistics system. The construction of this network has a significant impact on the costs that arise in the process of bringing goods to consumers, and through them on the final cost of the product sold. Therefore, it is so important for each enterprise to competently build its warehouse network. A system with one distribution center in this case has both its positive and negative properties for the enterprise: Pros: 1. The enterprise does not need to create an extensive network of warehouses serving any territory, it does not need to create an extensive warehouse infrastructure, so it does not incur additional costs for maintaining additional warehouses; 2. The company does not incur large transport costs, because under the existing distribution system, the enterprise does not maintain a significant fleet of vehicles due to the fact that it does not independently transport its products; 3. The company has the opportunity to sell its products to wholesale buyers at a lower price, because This price does not include transport costs. This low price can attract those wholesale buyers who have created a wide network of distribution centers, established transport facilities, and they, accordingly, have the opportunity to deliver goods to their wholesale bases at minimal costs. Disadvantages : 1. Under the existing distribution system, the enterprise is quite dependent on its wholesale customers. It can be noted that the company sells the vast majority of its products (98%) to only three intermediaries. Those. we can conclude that Sovlit’s sales structure is not diversified enough, as a result of which this enterprise is highly susceptible to fluctuations in demand from the above wholesale buyers, and this, in turn, may negatively affect the future success of sales of the enterprise’s products. In this case, these wholesale buyers can, in a certain situation, dictate their terms to the enterprise, seeking certain benefits for themselves and taking advantage of the fact that the enterprise is quite dependent on them; 2. This distribution system, when a wholesale buyer is forced to independently remove the company’s products from its warehouse, leads to a limitation in the number of buyers willing to cooperate with Sovlit LLC. After all, not every intermediary has the desire to independently deliver the products purchased by him from a given enterprise to his distribution center, thereby incurring all the costs associated with transporting the goods to the wholesale warehouse, its further storage and delivery to various retail outlets. This is precisely why Sovlit LLC has such a small number of resellers. Determining the required number of warehouses in the serviced area One of the main points in optimizing the distribution system is determining the required number of warehouses. First of all, you need to take into account the number of consumers, their location, as well as the volume of material flow they consume. The priority factor here, as indeed with any optimization process, is to minimize total costs. If you make the number of warehouses small (1-2), then in this case the transportation costs for delivery will be the highest (it is worth noting that these options are considered in the future, and not as an already existing event). The option with a large number of distribution centers assumes the presence of 5-6 distribution centers, as close as possible to the places where consumers of the material flow are concentrated. In this case, transportation costs for goods supply will be minimal. However, the appearance of such a number of additional warehouses in the distribution system increases operating costs, costs for delivering goods to warehouses, and for managing the entire distribution system. It is possible that additional costs in this case may significantly exceed the economic benefits obtained from reducing the mileage of transport delivering goods to consumers. Therefore, in our case, the preferred option is that the area is served by three additional warehouses. In total, four warehouses will operate in the distribution system (since the finished product warehouse can still perform the distribution function). Note that when the number of warehouses in the distribution system changes, part of the costs associated with the process of bringing the material flow to the consumer increases, and part is decreasing. The following costs act as variables: 1. transportation costs;2. inventory holding costs; 3. costs associated with the operation of the warehouse; 4. costs associated with managing a warehouse system. 1. Dependence of transportation costs on the number of warehouses in the distribution system The entire volume of transport work for the delivery of goods to consumers, and, accordingly, transport costs, are divided into two groups: · costs associated with the delivery of goods to warehouses of the distribution system (let's call this category of transport work long-distance transportation); · costs of delivering goods from warehouses to consumers (near-distance transportation).As the number of warehouses in the distribution system increases, the cost of delivering goods to warehouses, that is, the cost of long-distance transportation, increases as the number of trips increases, as well as the total mileage of transport. The nature of the dependence is not straightforward, since there are conditionally constant and conditionally variable components, as a result of which delivery costs grow more slowly than the distance. For example, when the distance increases from 20 to 60 kilometers (3 times), delivery costs increase only 2 times. Another part of transport costs is the cost of delivering goods from warehouses to consumers, which decreases with an increase in the number of warehouses. This occurs as a result of a sharp reduction in vehicle mileage. Total transport costs, as a rule, decrease with an increase in the number of warehouses in the distribution system. However, this decrease is not as pronounced as the decrease in costs for short-distance transportation, since the form of dependence is affected by the increase in costs for the delivery of goods to warehouses (with an increase in the number of warehouses). 2. Dependence of inventory holding costs on the number of warehouses in the distribution system As the number of warehouses increases, the service area of each of them decreases. Reducing the service area also entails reducing inventory in the warehouse. However, inventory typically does not shrink as quickly as the service area. There may be several reasons for this. For example, the need to maintain safety stock. In a single warehouse model, safety stock must be kept in one location. Increasing the warehouse network entails replicating the safety stock, that is, by creating several warehouses, it is necessary to create a safety stock in each of them. As a result, the total stock in all warehouses will increase (compared to the stock in a distribution system with one central warehouse).3. Dependence of the costs associated with the operation of a warehouse on the number of warehouses in the distribution system. With an increase in the number of warehouses in the distribution system, the costs associated with the operation of one warehouse are reduced. However, the total costs of the distribution system for maintaining the entire warehouse facility are increasing. This happens due to the so-called effect of scale: when the warehouse area decreases, operating costs per square meter are reduced. increase.4. Dependence of the costs associated with managing a distribution system on the number of warehouses included in it. Economies of scale also operate here, and therefore, as the number of warehouses increases, the cost curve for management systems becomes flatter. A prerequisite for the effective functioning of a distribution system with several warehouses is computerization of management (in our case, this is another additional cost item). From all of the above, we can conclude that the creation of new warehouses requires huge capital investments. At the moment, Sovlit LLC cannot afford this, and the management of the organization is absolutely satisfied with the current state of affairs. Sovlit LLC has been operating in this mode for many years (with one distribution center) and receives a stable income. Optimization of the location of distribution centers in the serviced territory The amount of transportation costs can vary significantly not only depending on the number of warehouses, but also depending on the location of these warehouses in the serviced territory. The distribution center (finished product warehouse) of Sovlit LLC is located in an inconvenient location, on the outskirts of the city, so transport costs the costs of intermediaries in this case are quite high. Even if there is one warehouse in the distribution system, it is more rational to place it in the center of the serviced territory, and not on its outskirts. The problem of locating distribution centers can be formulated as a search for an optimal solution, or as a search for a suboptimal one ( close to optimal) solution. In this case, when expanding the distribution network, it is most advisable for the enterprise not to build new warehouses, because This requires large financial investments, and it is better to use existing warehouses with established infrastructure, equipped access roads, etc. That is, it would be more rational to either purchase warehouses, preferably in the city center, or rent them. For a more accurate calculation of determining the location of a distribution warehouse in the serviced area, there is centroid method
The main goal is to minimize transportation costs. It is required to determine the X and Y coordinates of the warehouse.
where, G – freight turnover
Xi, Yi – coordinates of consumer i
Table 5 - Coordinates of retail outlets of Sovlit LLC
| Store number | X coordinate (km) | Y coordinate (km) | Freight turnover (pieces/month) |
| "Vester" | 15 | 11 | 90 000 |
| "Victoria" | 17 | 16 | 93 000 |
| “The Seventh Continent” | 18 | 13 | 86 000 |
| mn No. 16 | 18 | 15 | 50 000 |
| mn No. 27 | 22 | 16 | 40 000 |
| mn No. 52 | 23 | 35 | 45 000 |
| mn No. 44 | 28 | 34 | 49 000 |
| mn No. 33 | 40 | 23 | 65 000 |
| mn No. 29 | 35 | 25 | 78 000 |
| mn No. 5 | 14 | 15 | 80 000 |
X km = 90 000*15 +93 000*17 + 86 000*18 + 50 000*18 +40 000*22 + 45 000*23 +49 000*28 + + 65 000*40 + 78 000*35 + 80 000*14/90 000 + 93 000 + 86 000 + 50 000 + 40 000 +45 000 + + 49 000 +65 000 +78 000 + 80 000 = 1 350 000 + 1 581 000 + 1 548 000 + 900 000 + 880 000 +1 035 000 + 1 372 000 +2 600 000 +2 730 000 +1 120 000/ 676 000 = 22
Y km = 90 000*11 + 93 000*16 + 86 000*13 + 50 000*15 + 40 000*16 +45 000*35 + 49 000*34 +65 000*23 + 78 000*25 + 80 000*15/ 676 000 = 990 000 + 1 488 000 +1 118 000 + 750 000 +640 000 +1 575 000 +1 666 000 + 1 495 000 +1 950 000 +1 200 000/676 000 = 19
Xwarehouse = 22 - Warehouse
Ywarehouse = 19
Rice. 12. Determining warehouse coordinates When choosing a site for a distribution center, after the decision on the geographic location of the center has been made, the following factors also influence: 1. Size and configuration of the site. A large number of vehicles servicing input and output material flows requires sufficient space for parking, maneuvering and passage. The absence of such areas will lead to congestion and loss of time for clients (possibly even for the clients themselves). It is necessary to take into account the requirements imposed by fire services: in case of fire, free passage of fire equipment must be ensured to warehouses. 2. Transport accessibility of the area. A significant component of the operating costs of any distribution center is transportation costs. Therefore, when choosing a site, it is necessary to evaluate the roads leading to it and become familiar with the plans of the local administration to expand the road network. Preference should be given to sites located on main (main) routes. In addition, it is necessary to study the availability of the territory with other types of transport, including public transport, on which the accessibility of the distribution center both for its own staff and for clients significantly depends. 3. Local authorities' plans. When choosing a site, it is necessary to familiarize yourself with the plans of the local administration for the use of adjacent territories and make sure that there are no factors that could subsequently have a restraining effect on the development of the distribution center. In addition to the listed factors, when choosing a specific site for a distribution center, it is necessary to familiarize yourself with the peculiarities of local legislation and analyze costs to improve the territory, evaluate the existing buildings on the site (if any), take into account the possibility of attracting local investments, and become familiar with the situation on the local labor market. Conclusions and proposals for optimizing the distribution system Based on the results of the analysis of the distribution system carried out in the previous paragraphs, we can draw a general conclusion that the existing product distribution system of Sovlit LLC does not meet many logistics requirements, does not ensure maximization of enterprise profits, and leads to an increase in transportation costs when delivering finished products from the enterprise's warehouse to the final consumer, etc. However, this structure has been used by the enterprise for more than seven years, and so far the enterprise management does not intend to make such significant changes to it. This is due to the fact that changing the existing system requires significant capital investments (creating a fleet of vehicles, renting or purchasing warehouse space within the city), and in addition, a qualitatively different approach to organizing the management of material and information flows is required. The enterprise also needs to establish direct connections with the direct consumers of its products. The principles that guide the management of the enterprise are clear. After all, this sales structure is the most “painless” for the enterprise in the short term, because all transport and storage costs in this case are minimal, and the enterprise is freed from the need to independently engage in retail sales of its products. But if we consider the long-term perspective, taking into account the influence of positive and negative environmental factors, it becomes obvious that the existing system needs to be changed and optimized in in accordance with basic logistics principles. Optimization of the existing distribution system can be carried out in several directions: 1. It is necessary to increase the number of distribution centers (wholesale warehouses); 2. It is optimal to place these warehouses in the serviced area; 3. Create a sufficient fleet of vehicles with the required carrying capacity and rationally organize its work to deliver the enterprise’s products from the place of production to the place of consumption; 4. It is necessary to establish direct connections with consumers of the enterprise’s products (both individuals and legal entities). Those. diversify the sales structure as much as possible, which will ensure the company a stable and uniform demand for its products and reduce trade risk to a minimum; 5. At the same time, we should in no way lose the already established connections with wholesale buyers, but offer them to continue to work on mutually beneficial terms, and in the new conditions they will have the opportunity to choose the most convenient distribution center for them in order to reduce their transportation costs. Of course, when buying goods directly near their distribution centers, intermediaries will already count on a higher price, in which the enterprise will include its costs of delivering products to the place of consumption. It should be noted that after optimizing the distribution system, these costs will be minimized, which, with the existing the level of retail prices for the company's products will increase its profits.
3.4 Transport logistics
Transport logistics – deals with transportation issues, solves the problems of choosing vehicles, choosing a transportation method, developing optimal routes for transport schedules.
A significant part of logistics operations along the route of material flow from the primary source of raw materials to final consumption is carried out using various vehicles. The costs of performing these operations amount to up to 50% of the total logistics costs.
Figure 13 shows the external transport system of the enterprise.
Fig. 13. Transport system of the enterprise.
The finished products of the intermediary company are delivered using their own transport.
The main type of transport of the enterprise is cars. Road transport is traditionally used for short distance transportation. One of the main advantages is high maneuverability.
With the help of road transport, cargo can be delivered door-to-door with the required degree of urgency. This type of transport ensures regular delivery, as well as the possibility of delivery in small quantities. Here, compared to other types, less stringent requirements for product packaging are imposed.
Figure 14 shows the organization of transportation involving several vehicles.
Information financial flows
Material flows
Rice. 14. Organization of transportation involving several modes of transport
3.5 Economic assessment of the effectiveness of the proposed measures
These measures will improve the following performance indicators of the enterprise: turnover, inventory management costs, warehouse turnover, transportation costs.
According to estimates, trade turnover should increase by approximately 16%. This is due to the choice of a more reliable supplier who will deliver goods with the least number of delays and defects, and therefore with minimal costs.
Turnover of the enterprise:
T = To/Сср,
where To is the turnover for the period, rub.;
Ssr - average cost of 1 batch of goods, rub./p. Trade turnover before improvement: T= 2844000/32000= 89 batches. Trade turnover after improvement: T= 3299040/32000=103 batches.
The cost of inventory management will decrease by approximately 20%, as a result of applying a better inventory management strategy, including calculation of the optimal order size and control.
Cost of inventory management (RUB per 1 batch of goods):
where Re is the amount of operating costs for the year, rub.;
T - trade turnover, p.
Cost before improvement: C = 620,000/89 = 697 rub.
Cost after improvement: C=49600/103= 481 rub.
Warehouse turnover time will decrease by 17% due to a decrease in the time spent delivering goods to the warehouse (thanks to the new, more advantageous warehouse location).
Warehouse turnover:
PO = T/txpsr,
where txpср is the average time of storage of goods in the warehouse (days);
T - time period (days).
Warehouse turnover before improvement: PO = 365/27.7 = 13.2 days.
Warehouse turnover after improvement: PO = 365/32.5 = 11.2 days.
The enterprise's transport costs are expected to be reduced by approximately 35% thanks to the proposed transportation organization scheme, which includes the participation of several modes of transport, namely the enterprise's transport and the transport of the forwarding company (or supplier's transport).
Transport costs before improvement (rubles per year): 750,000
Transport costs after improvement (rubles per year): 487,500
In this course work, an analysis of the logistics system of the activities of Sovlit LLC was carried out. And the following conclusions were made: The use of logistics can significantly increase the efficiency of trade. The main components of the effect are as follows:
1. Reducing inventories for the purpose of product distribution.
2. Maximum use of space and volume of a retail enterprise.
3. Accelerating capital turnover by controlling the time of end-to-end processes for placing and executing orders.
4. Reduction of transport costs, which can be achieved due to the high consistency of participants in the use of transport.
The total effect from the use of logistics exceeds the sum of the effects from improving the listed indicators. This is explained by the emergence of organized logistics systems with a market-valuable ability to ensure the delivery of the right cargo, the required quality, in the right quantity, at the right time and in the right place at minimal cost.
Optimizing logistics operations can give a company a competitive advantage and ensure successful, efficient operations. By wisely using tools for analyzing and managing logistics processes, company managers are able to significantly increase the efficiency of the enterprise.
Bibliography
1. Volgin V.V. Warehouse: Practical guide – 2nd ed. - M.: Publishing House "Dashkov and Co", 2001. - 315 p.
2. Gadzhinsky A.M. Logistics/ A.M. Gadzhinsky. – M., 2003. – 407 p.
3. Gordon M.P., Logistics of goods distribution. - M.: Center for Economics and Marketing. 2002. - 168 p.
4. Degtyarenko V.N. Fundamentals of logistics and marketing: Textbook / GAS. - Rostov, 1992.5. Dashkov L.P., Pambukhchiyants V.K. Commerce and trade technology: A textbook for students of higher educational institutions. – 4th ed., revised. and additional - M.: Publishing and trading corporation "Dashkov and Co", 2002. - 596 p.6. Kretov I.I. Logistics in foreign trade activities / I.I. Kretov, K.V. Sadchenko. – M., 2003. – 190 p.7. Plotkin B.K. Fundamentals of logistics: Textbook / LFEI. - L., 1991.8. Rodnikov A. N. Logistics: Terminological Dictionary. - M.: Economics, 1995.
Annex 1
Northwest Angle Method
The purpose of transport methods is to determine the best routes for transporting goods from several supply points to several consumption points, ensuring the lowest total costs associated with the production and transportation of goods.
Typically, the capacity of each of the sources of goods and the needs for these goods of each of the destinations (consumption) are considered. The process of solving a transportation problem begins with determining a feasible initial solution, then improving the solution to its optimum. The initial information for the solution is:
A) the capacity of each production enterprise;
B) the needs of each consumer of goods;
C) the transportation costs of delivering a product from each source to each destination.
(E) Requirement 400pcs
(A) capacity 300 pcs
(F) Requirement 400 pcs
(V) Power 500 pcs
(C) Power 500 pcs
(D) Requirement 500 pcs
(E) Requirement 400pcs
(A) capacity 300 pcs
(F) Requirement 400 pcs
(V) Power 500 pcs
(C) Power 500 pcs
(D) Requirement 500 pcs
Fig. 15 Transport diagram
The initial data is entered into a matrix that has the following form:
Table 6 - Transport costs for the delivery of one air conditioner for an enterprise:
Table 8 - 1) Valid solution to the problem
Where A, B, C are the capacities of production enterprises;
D, E, F – consumer needs
Costs = 300*6+200*4+300*5+100*8+400*8= $7300
Table 9 - 2) Method of sequential improvement of the solution
a) A–E: +8$-6$+4$-5$= 1$
This means that for each air conditioner transported from A to E, the total cost will increase by 1 dollar from the achieved level.
b) A–F: +2$ -6$ +4$ -5$ +8$ -8$= -5$
A negative index indicates that cost savings can be achieved if routes A–F are included in the transportation routes.
c) B-F: +2$ -5$ +8$ -8$=-3$
A negative index indicates that cost savings can also be achieved if route B-F is included in shipping routes.
d) C-D: +5$ -4$ +7$ -8$= -2$
A negative index indicates that cost savings can also be achieved if route C-D is included in shipping routes.
UDC 658.78
OPTIMIZATION OF LOGISTICS PROCESSES IN WAREHOUSING
L. A. Kobeleva, L. K. Zaidullina
Kazan National Research Technical University named after A. N. Tupolev - KAI Russian Federation, 420111, Republic of Tatarstan, Kazan, st. K. Marx, 10
Email: [email protected]
The task is set to optimize logistics processes in warehousing. As a result of the work, three stages were identified, the main advantage of which is the maximum reduction of costs and maximum increase in profits. It is shown that these proposals play a large role in logistics processes, doing business and relate to rocket and space dynamics, since the warehouse is an integral part of the manufacture of rocket and space technology.
Key words: optimization of logistics processes, ABC analysis, XYZ analysis, identification of incoming products, warehouse reorganization.
OPTIMIZATION OF LOGISTIC PROCESSES IN WAREHOUSE ECONOMY
L. A. Kobeleva, L. K. Zaydullina
Kazan National Research Technical University of A. N. Tupoleva - KAI 10, K. Marx Str., Kazan, 420111, Republic of Tatarstan, Russian Federation E-mail: [email protected]
In article the task of optimization of logistic processes in warehouse economy is set. As a result of work three stages by the main dignity of whom are revealed the maximum cut in expenditure and the maximum increase in profit is. It is shown that these offers play a large role in logistic processes, business also belongs to is rocket - space dynamics as a warehouse an integral part of production it is rocket - the space equipment.
Keywords: optimization of logistic processes, ABC the analysis, XYZ the analysis, identification of the arriving production, reorganization of a warehouse.
Logistics is the process of planning, controlling and ensuring the efficient and constant flow of goods and services to meet consumer demands.
Every day, business laws require maximum cost reduction and, of course, maximum profit increase. If you are in the business of supplying goods or services, then you are directly involved in the acquisition of raw materials and goods, as well as their processing and delivery. For the correct and high-quality processing and coordination of cargo, financial and information flows, the logistics process is used, the main task of which is to optimize logistics processes.
Optimization of logistics processes is the achievement of the most efficient transport and logistics system. When there are changes in the market, business diversification, the opening of new divisions, increased competition, or changes in the company's development strategy, it is useful to start optimizing logistics. It is necessary to take into account that irrational transportation over long distances and long-term storage of large inventories in huge warehouses reduces a significant share of the revenue of individual enterprises.
Current problems of aviation and astronautics - 2017. Volume 2
Today, a number of methods are being developed in Russia to speed up and optimize logistics processes in warehousing. Optimization of warehouse operations is the careful work of qualified employees. Actions must be consistent and thoughtful.
A modern large warehouse is a complex technical structure, consisting of numerous interconnected elements, having a specific structure and performing a number of functions for the transformation of material flows, as well as the accumulation, processing and distribution of goods among consumers.
The first step to speed up transportation is choosing a warehouse location. Divide into regions in which it is planned to sell products, conduct market segmentation, take into account the proposed methods of sales, and conduct a check using the method of full logistics costs. It is important to reorganize the warehouse, conduct an ABC analysis for the placement of goods according to turnover, the configuration and number of floors of the premises. Conduct XY analysis to forecast demand and, accordingly, the frequency, volume and frequency of orders for goods.
The second step is to prepare the warehouse for receiving products. To do this, it is necessary to obtain timely information about the expected delivery of goods from the supply department, determine the number of employees involved in unloading and receiving products, and determine potential storage locations.
The final stage is to carry out such an operation as identifying incoming products, with the help of which control, accounting, condition and movement of products in the warehouse will be carried out. However, the choice of identification should be approached by carefully weighing all options, including financial ones. To increase the efficiency of operations, methods such as individual coding, bar coding, radio frequency identification can be used. An example of a fragment of a plan for implementing improvements to the operation of a warehouse is described in the table.
Implementation plan for warehouse improvements
Suggestions Importance of implementation Result
Selecting a warehouse location High Allows you to save on costs and inexpensively transport the necessary consignments of goods
Carrying out warehouse reorganization Medium Comparison to save on costs and inexpensively transport the necessary consignments of goods
Conducting an ABC analysis High Identification of excessive use of resources
Conducting XYZ analysis High Increasing the efficiency of the commodity resource management system
Preparing the warehouse for receiving products Medium Facilitating delivery processes
Identification of incoming products Medium Helps track items in the warehouse
An example is OJSC Kirovgrad Warm Alloys Plant, the largest Russian enterprise, one of the world leaders in hard alloy products, where the implementation of logistics processes in the warehouse continued for several years. Problems that were associated with a lack of warehouse space, the amount of time, shipping or loading of goods reduced the efficiency of the warehouse. The successful implementation of specialized programs and warehouse reorganization made it possible to reduce problems to zero.
Thus, knowing the list of necessary operations, my recommendations are one of the main ones for introducing logistics innovations into it. It is expected that the introduction of such innovations will simplify and optimize warehouse operations, which will allow the productivity of your enterprise to increase even more.
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2. Optimization of logistics processes. [Electronic resource]. URL: http://www. fill2001.narod.ru/OptimioLogist.htm (access date: 03/30/2017).
3. Warehousing logistics [Electronic resource]. URL: http://www.xcomp.biz/tema-7-logistika-skladirovaniya.html (access date: 03/30/2017).
4. Kichemasova E. V., Sokolova K. V. Optimization of logistics processes // Scientific community of students of the XXI century. Economic sciences: collection. Art. according to mat. XXVI Int. stud. scientific-practical conf. 2014. No. 11(26).
5. Application of lean manufacturing principles in the formalization of business processes at a technical university / G. F. Mingaleev, R. Ya. Akhmadiev, R. F. Garifullin // Vestnik Kazan. state tech. University named after A. N. Tupolev. 2015. No. 1. P. 148-152.
© Kobeleva L. A., Zaidullina L. K., 2017
The selection criterion follows from the purpose of the decision maker. Traditionally, the goal of logistics is to organize the supply of the right product (in terms of quantity and quality) to customers at a given place and time at the lowest cost. At the same time, logistics itself acts as a functional area for managing operations for the physical movement and storage of resources and goods, called “logistics operations.” As a result, logistics optimization is focused on the criterion of minimum costs (logistics costs) for performing these operations. This criterion has a number of disadvantages.
Managing a complex economic object involves optimizing the flow passing through it (converting resources into benefits) at all stages of its movement. Hence, the most important principle of effective management is the principle of global (in the sense of complete coverage of the controlled process) optimization. However, limiting the subject of logistics to only “logistics” operations and applying the criterion of minimum “logistics” costs makes it impossible to make globally optimal decisions.
The resulting indicators of the behavior of economic objects are always economic parameters. At the same time, the practice of optimization decisions that has developed within the framework of traditional logistics deals mainly with technological variables, while economic variables, if taken into account, are only indirectly - as restrictions.
Technological criteria aim at maximizing the intensity of resource use and reduce the process of optimizing a complex flow to finding a bottleneck in the economic process. But optimal technological solutions are extremely rarely consistent with optimal economic criteria.
A possible reason for the technological emphasis on “logistics” optimization is the uncertainty of what type of costs - gross or average - should be minimized. If we are talking about gross costs, then, firstly, you need to understand that they are generally not minimized, because as output increases, they always increase. Minimization of gross costs as a selection criterion is applicable only in the aspect of the comparative efficiency of alternative options that are identical in all other conditions (and, first of all, in terms of output). But all the creative potential of logistics is precisely connected with the rejection of this identity. Secondly, the inclusion in the analysis of the parameters of time and place of delivery not only expands the space of acceptable choice, but also raises the question of optimizing the logistics chain organized to implement a specific type of flow, i.e. coordination of local solutions of all its links. At the same time, the assessment of comparative effectiveness based on the criterion of minimum gross costs is not intended to solve this problem.
In this matter, an analysis of average costs per unit of product is more adequate, since it aims to study their dependence on flow parameters (speed, delivery time, etc.) at all stages of its movement. But then it is obvious that decisions based on the criteria of the “bottleneck” and the minimum total average costs will be identical only in the case of decreasing functions of average costs in each of the logistics links connected in the chain. But there are no compelling reasons to recognize the pattern of this case.
On the contrary, the optimal (according to the criterion of minimum average costs) production level is, as a rule, less than the maximum possible output. Accordingly, the value of the global (according to the criterion of minimum total average costs) optimum output may exceed its locally optimal level in individual operations. Thus, the bottleneck principle cannot be accepted as a general flow optimization method.
It must be emphasized that even eliminating all the previous comments (which is possible in principle) does not allow us to focus on the criterion of minimum average costs when optimizing logistics solutions, since the scope of its application is extremely limited.
The most significant feature of economic activity is the orientation towards maximizing the welfare of the economic entity. When applied to production, this goal is specified in the profit indicator. At the same time, no nature of the demand function allows us to abstract from the price factor. Even in conditions of perfect competition, when a company is able to control only its costs and output, profit maximization is achieved when output exceeds output with minimum average costs. In other words, the criterion of minimum average costs under any type of market structure cannot be perceived even as a special case of maximum profit.
One effective means of controlling overall costs is to fully focus all resources on achieving results. Moreover, it is not the absolute level of total costs that is important, but the relationship between the efforts and the results obtained. Even when efforts and resources are systematically directed toward identifying opportunities and achieving results, cost analysis and control are necessary.
In the process of planning logistics costs, enterprises take into account:
- a) the results of the analysis of individual items of logistics costs and identified reserves for their savings;
- b) indicators developed by specialists of the enterprise’s logistics service for the upcoming (planned) period (necessary reserves, income, profit, etc.);
- c) standards for spending funds, resources, current tariffs for freight transportation, utilities, etc.;
- d) factors influencing changes in logistics costs for individual items in the planning period;
- e) indicators of logistics costs for the reporting period for other enterprises, for the industry as a whole;
- f) forecast calculations of logistics costs and the main directions of their savings in the planning period.
In order to control logistics costs, logistics specialists need to conduct analysis, namely:
- a) identify cost centers - functional areas of the business where significant costs accumulate and where their effective reduction can bring real results;
- b) find important cost points within each center of their concentration;
- c) consider the enterprise’s business as a whole as one cost stream;
- d) consider the cost as the amount that the consumer pays rather than as the amount of costs that arise within the enterprise as a legal entity or object of tax accounting;
- e) classify logistics costs in accordance with their main characteristics and thus diagnose total costs.
The competitiveness of an enterprise depends not only on the level of costs associated with the operation of the enterprise itself, but also on the level of costs of suppliers and distribution channels.
To achieve an advantage, a company's total costs must be lower than those of its competitors. There are two ways to achieve this: logistics warehouse cost costing
- 1) use resources more efficiently than competitors and manage factors affecting costs;
- 2) rebuild the enterprise's cost structure in such a way as to eliminate some elements that create costs.
Ways to reduce logistics costs:
- 1) search and reduction of those activities (procedures, works, operations) that do not create added value by analyzing and revising the supply chain.
- 2) negotiations with suppliers and buyers to establish lower selling and retail prices, trade markups.
- 3) assisting suppliers and buyers in achieving lower costs (customer business development programs, seminars for resellers).
- 4) forward and backward integration to ensure control over total costs.
- 5) search for cheaper substitutes for resources.
- 6) improving the coordination of the enterprise’s activities with suppliers and consumers in the LC, for example in the field of timely delivery of products, which reduces the costs of inventory management, storage, warehousing, and delivery.
- 7) compensation for cost growth in one link of the LC by reducing costs in another link.
- 8) use of progressive work methods to increase employee productivity.
- 9) improving the use of enterprise resources and more efficient management of factors affecting the level of total costs.
- 10) updating the most costly links of the LC when making investments in business.
Logistics systems according to the field of activity of a particular business entity are divided into two groups:
- - micrologistics systems;
- - macrologistics systems.
Micrologistics systems, as a rule, relate to individual enterprises, for example, to a product manufacturing enterprise, and are designed to manage logistics flows in the processes of production and/or procurement of resources and marketing of finished products.
Figure 3.1 - Micro- and macrologistics systems
In Fig. Figure 3.1 presents five micrologistics systems - A, B, C, D and E, which together form the ABCDE macrologistics system. In this case, a certain pattern can be identified. So, for example, the logistics system AB, including resource supplier A and manufacturer B, can be:
- - macrologistic, since it unites two legally and/or economically independent economic entities;
- - consisting of two micrologistics systems, if enterprises A and B are a legally registered association of enterprises.
Based on this, it can be argued that the ABCDE logistics system will also be considered micrologistics if the enterprises included in it represent a legally and / or economically separate group - an integrated logistics system. Logistics management in an integrated logistics system is a management approach to organizing the work of a manufacturing enterprise and its logistics partners (intermediaries), which provides the most complete consideration of time and spatial factors in the processes of optimizing the management of logistics flows to achieve the strategic and tactical goals of a given enterprise in the market . The concepts of minimizing overall logistics costs and managing the quality of logistics functions and operations at all stages of the production and commercial cycle are decisive for the formation of integrated logistics systems. Management of links in an integrated logistics system should be built on the principle of maximum independence with strict control over the activities of these links, and therefore the role of economic management methods increases significantly.
Let's consider a number of main aspects of managing an integrated logistics system:
- 1) determination of the efficiency of economic activities of the units of this system;
- 2) determining the effectiveness of the functioning of a link as part of an integrated logistics system;
- 3) identifying the bottleneck in the integrated logistics system.
The efficiency of economic activities of the links of the integrated logistics system is determined by the following algorithm;
The share of costs of each link (D zli) in the costs of the logistics system is calculated. Usually, the value of total assets is used as a monetary expression of the amount of costs when making calculations. Consequently, the sum of the costs of each link is the book value of the assets managed by this link. Let's calculate using formula (1):
D zli =3 li /?3 li, (1)
where 3 li are the costs of the i-th link of the logistics system;
- ?3 li - costs of the logistics system as a whole;
- - the share of each link (D pli) in the total net profit of the logistics system is calculated using formula (2):
D pl =P li /?P li, (2)
where Pli is the net profit of the i-th link of the logistics system;
- ?Pli - net profit of the logistics system as a whole;
- - the efficiency ratio of economic activity is calculated (TO whether ) for each link of the logistics system according to formula (3):
TO whether = D pli /DZ li (3)
The links of the logistics system are ranked according to the value of the business efficiency coefficient.
OPTIMIZATION OF LOGISTICS PROCESSES WITHIN THE FRAMEWORK OF THE GENERAL REFORMING OF THE COMPANY’S ACTIVITIES
Optimizing the activities of any organization implies reforming and transforming every business process without exception, and logistics is one of the first on this list. Using the example of a specific trading and manufacturing company, the authors show how a well-thought-out policy of its management contributes to the organization’s resilience to various types of market “shocks.”
Even the most superficial analysis of companies’ activities in conditions of economic instability allows us to conclude thatthe readiness of many organizations for the realities of the crisis, in this regard, the experience of the company, which began to “prepare the sleigh in the summer,” is largely interesting. Using the example of ZAO XX-Logistic, we will look at how The decisions made by the manager radically affect the work of the company.
The company was organized in 1993, its initial activities can be characterized as wholesale trading and purchasing: purchasing building materials from Russian and Polish manufacturers (then Turkish and Chinese appeared) and selling them from a warehouse in Moscow. By 1998, the company had a stable sales market in the capital region and opened branches in other large cities of Russia. The crisis that broke out in the same year seriously shook its position in the market; in order to survive, the company began selling building materials at retail, the goods were delivered to customers in employee cars. It was necessary to close regional branches, and the warehouse space available there was temporarily mothballed or leased out. However, these steps did not bring the desired result - the company, which was previously on the list of leaders in the building materials market, lost its leading position. It took five years to realize how depressing the company's affairs were. The product sold poorly, competitors' pricing policies were more attractive to consumers, and the method of delivering goods using personal transport of staff was morally (and technologically) outdated. Another year or two - and the company could declare itself bankrupt, so the management decided to sell regional assets (warehouse and office space for rent), move to the region and intensify cooperation with companies operating in the DIY segment (they were active at that time entered the Russian market). At the end of 2004, the company moved to the nearest Moscow region and leased 15 new cars. Since the acquired warehouse space needed to be filled with something (their own goods occupied only 35% of all space), such a direction as the responsible storage of someone else’s goods began to develop. In 2006, the company became a production and logistics company - the organizations that rented the neighboring areas moved out, the management decided to purchase them and place warehouses and their own production there (carpentry shop). At the same time, the question arose about the profitability of production: leasing payments for vehicles had to be paid for another year, and payments on the loan for the purchase of production premises ate up all the profits. The active development of the DIY market required a new approach to company management, and the necessary knowledge was not enough, so they began to rebuild “as best they could”...
FIRST EXPERIENCES IN OPTIMIZATION OF LOGISTICS BUSINESS PROCESS
Due to the specifics of the business, territorial location, lack of developed infrastructure
The relationship with customers that existed at that time can be characterized as “personal sales,” and the scheme of working with DIY stores led to the fact that the presence of a warehouse only hindered the implementation of business plans. Warehouse workers spoke about the need to switch to item-by-item accounting and weekly planning and prioritization in working with clients. The accounting department responded by stating that there were not enough employees to keep records “with a lag of one day”; The company's management was forced to constantly expand its staff. A logical question arose: why are there only 6 sales managers in the commercial department, 18 people in the shipping document issuance department, and 42 people in the accounting department. The Deputy General Director was asked to develop an alternative to the existing work system. In Fig. Figure 1 shows a diagram of the logistics process that existed at that time.
Rice. 1 . Initial diagram of the logistics business process
Problems related to personnel in one way or another were grouped into four groups.
1.Unformalized business processes. At the “conceptual level,” everyone knew their functionality and area of responsibility, but the immediate managers of most departments only guessed about the actions that their subordinates performed to achieve the goals and objectives of the business, which led to dependence on a larger number of “key employees.”
2. High staff turnover in the warehouse (loaders and storekeepers) and in the accounting department contributed to the emergence of a conflict of “areas of responsibility.” Once a week, the general director held a meeting-discussion, where questions were raised from the series “who, to whom, when and what should have been transferred” and “why was this not done?”
3.Lack of standards for the number of department employees, the need to analyze staff workload. A simple analysis of the size of the average company (in 2005 it was 521 employees) allows us to ask the question: why did the number of loaders in one of the warehouses during 2005 fluctuate from 68 to 15, with the norm established by the staffing table of 45 people?
4. Lack of clearly demarcated responsibility for resolving certain issues. Despite the presence of a three-stage management system, most “operational-tactical” issues (for example, who and when will repair the gate damaged the day before by a truck) were decided by the general director.
After presenting the “list” of problems to the general director, his deputy immediately began solving them.
In order to
to formalize business processes, the company hired a specialist whose task was to:
1) carry out timing of warehouse operations and standard actions of employees involved in the supply chain;
2) formalize the work process for each position, taking into account the parity of functional operations carried out within the company’s activities, and calculate the optimal number of employees employed at each stage of logistics.
In order to reduce staff turnover, an assessment of employee competencies was carried out jointly with the HR manager. The results of this assessment were taken into account
· when creating a candidate profile,
· development of KPIs for each participant in the logistics business process,
· changing the employee remuneration system.
In order to increase the efficiency of the company's management system and promptly provide management with up-to-date information, it was decided to implement the 1Cv8: Inventory Management program.
The results of the work carried out were presented to the General Director in March 2007:
■ based on a detailed study of the work process and the timing of operations carried out in the warehouse, the business process manager, together with the heads of line departments (except for accounting), described the functionality of each position, the area of responsibility of the specialist occupying it and the procedure for his interaction with colleagues;
■ analysis of staff workload made it possible to calculate the optimal number of employees at each site and in divisions, and the issue of determining the functionality of employees was worked out;
■ an attempt to optimize the number of personnel was unsuccessful;
■ the generated candidate profile turned out to be irrelevant, because due to the lack of a sufficient number of candidates for vacancies, it was necessary to accept all more or less suitable ones;
■ the essence and purpose of KPI was unclear to ordinary employees; they perceived payments for achieving indicators as a monthly bonus, and very often remained dissatisfied with its size;
■ the 1Cv8: UPP program was installed, servers were updated, some personal computers were replaced with a terminal version, a fiber-optic cable was laid for fast system communication; At the same time, virtually no one used the program: no more than 3–5% of employees entered information into the database.
Summing up, the general director noted that a huge amount of preparatory work had been done, but this did not lead to a sustainable increase in sales of logistics services and an improvement in the company's management structure. It was decided that in the future the work on introducing changes would be led by the general director himself. Management listed the following as the main strategic goals of the organization:
■ increasing the number of consumers of the company's logistics services;
■ adaptation of the organizational structure to the assigned tasks;
■ increasing business profitability;
■ taking advantage of external growth opportunities (DIY market).
PREPARATION FOR IMPLEMENTATION OF A NEW APPROACH
Two weeks after summing up the results, the general director formed a working group, which included his deputy and invited consultants.
We list the tasks assigned by management to members of the working group:
■ reducing the influence of personal attitudes of sales managers on the profitability of logistics operations;
■ reducing labor costs for personnel involved in logistics operations to a level not exceeding 16% of the revenue generated by these operations;
■ change in corporate culture, resulting in
a core of employees must be formed who are aware that their activities directly affect the company’s profit; everyone must understand what they are responsible for, be ready to bear such responsibility and not shift it
on colleagues and superiors;
■ creating conditions under which the general director and other responsible persons will be able to control the planning horizon and the employee’s progress towards their goals;
■ all employees involved in the logistics business process and having an automated workstation must use the 1Cv8: UPP program.
Fulfillment of the listed tasks should have ensured sales growth not at the level of 18% (predicted stable sales growth), but at least at the level of 20% by the spring of 2008.
In order to take advantage of the growing market for construction materials and warehouse logistics, it was necessary to reconsider the entire logistics chain from the moment the client appears until the completion of the work. During that period, the labor market was experiencing an increase in wages and a significant tilt towards the “candidate market”; company employees who expected wage increases from July 1, 2007 could destabilize the situation by resigning due to “unjustified hopes.”
Calculations showed that if we follow the traditional path and organize work according to the principle “as is - as should be - as will be,” then the strategic goals will not be achieved, so the members of the working group decided to start from the final objectives. They developed a model in which all the conditions set by the general director are met. This “ideal” model made it possible to determine what the company lacks to operate within the prescribed framework. It turned out that first of all it is necessary to redistribute the functionality (Fig. 2). Only in the case of such a redistribution was it possible to solve the problems of reducing labor costs, providing the ability to control the work of employees, and introducing the 1Cv8: SCP program.
Rice. 2 Logistics business process optimization project
Since this version of the changes involved not only the introduction of CRM and SRM blocks “1Cv8: UPP”, but also the intensification of work on the implementation of this program in other departments, the working group participants linked the change in functionality with the automation of logistics operations. These processes were considered as parallel. Their successful implementation was impossible without active training, which, in turn, led to the reform of the training system in the company, and this contributed to a change in corporate culture.
IMPLEMENTATION OF THE COMPANY'S NEW LOGISTICS MODEL
If at the design stage everything was clear with the new functionality and distribution of areas of responsibility, then for employees to understand the fact that “from Monday we are working in a new way,” it took not only meetings and familiarization of each employee with the new job description, but also active work to change communications in the company, transition to automated rails. Since considerable funds were spent on the acquisition of “1Cv8: UPP”, and business processes still needed to be rebuilt, the “1C8 ideology” was taken as the basis for the implementation of the new approach. That is why some business processes were changed or simply “liquidated”.
Table. Changing the approach to doing business and the areas of responsibility of employees
|
Was |
Area of responsibility |
It became |
Area of responsibility |
|
Demand Forecasting |
Sales Manager |
Regulating demand for warehouse space |
Sales Manager |
|
Customer Service |
Storekeeper, Department of Internal Affairs Economist, Accountant |
Relationships with customers |
Sales Manager |
|
Warehouse inventory management |
Head of warehouse |
Customer Service |
Storekeeper |
|
Logistics communications. |
There was no specific person in charge |
Fulfillment of orders (reception / shipment) |
Storekeeper |
|
Maintaining documentation for the receipt/dispatch of goods (invoice, waybills, work completion certificate, etc.) |
Storekeeper, accountant |
Production flow in a warehouse |
Head of warehouse |
|
Order Processing |
Department of Internal Affairs Economist |
Procurement |
Purchasing specialist (formerly economist) |
|
Packaging |
picker |
Cargo handling, dismantling and packaging |
Loader-picker |
|
Cargo shaping |
picker |
Warehousing, Storage, barcoding |
Loader-picker |
|
Selection of warehouse premises for cargo storage |
Sales Manager |
Dispatcher |
|
|
Procurement |
Procurement Specialist |
Transportation (own) |
Dispatcher, driver |
|
Logistics of returnable containers (pallets) |
Sales Manager |
||
|
Transportation (own) |
Dispatcher, driver |
||
|
Warehousing and storage |
Loader |
||
In order to optimize business processes and in accordance with the principles of CRM, it was decided to fill out the “Event Cards” (Fig. 3) immediately after the negotiations, but
Reforming the usual work pattern was not easy - for example, sales managers were not ready to work in CRM, and filling out the “Event Card” was accompanied by the manifestation of negative emotions.
Rice. 3. Event card
The general director’s working day began with reading the “Event Cards” (filled out by sales managers the day before), and he directly addressed any questions that arose to those in charge. If previously related departments waited for the sales manager to come in (or call) and ask for the necessary data, then as a result of the activity of the general director, the time for resolving such issues has been reduced to a minimum. Employees of related departments even developed a kind of “warning reflex of warning the boss’s question” - most of the related departments not only began to read “Event Cards”, but also prepared a solution / answer with the requested data in advance.
In general, sales managers and most employees involved in logistics managed to “instill” a work culture in CRM. Thus, storekeepers are accustomed to logging into the system approximately once every two hours and generating reports on the “Order Fulfillment (Reception / Shipping)” process and planning the activities of their subordinates taking into account the assigned tasks. Previously, sales managers, purchasing specialists and dispatchers were not very interested in the situation in the warehouse, because... This is the area of responsibility of another department, and they sent vehicles to the warehouse at any time convenient for them. With the introduction of the 1Cv8: UPP program, the dispatch of vehicles to the warehouse began to be regulated by a waiting list; Of course, situations are possible when a vehicle arrives for loading/unloading at odd hours, in which case it is sent not to the dock, but to the reserve ramp.
Another plus was that the new system provided the possibility for the loaders themselves to record information concerning the person performing a specific operation, as well as the place and standard time for its implementation, as a result, claims for misgrading and violation of the integrity of the packaging were reduced. And the functionality itself has changed: previously there were pickers in the warehouse who were engaged in the formation of cargo and its packaging, and then handed over their work to loaders, and no one was responsible for the quality of the cargo. With the introduction of an “accounting system” and the unification of functionality, each cargo became targeted. The system allowed any loader-packer to find out
· what cargo did he complete and when,
· how much money did he earn?
· what quality factor is calculated for the shipped cargo?
Informal “master classes” were held in the break room of the loaders-packers, at which warehouse workers exchanged experience in finding successful solutions, as a result, the overall professionalism of the team began to increase and, most importantly, the time of loading and unloading work decreased.
The functionality has changed not only for loaders and packers. Thus, storekeepers began to deal with primary accounting, the need for so many accountants disappeared, and those who remained became not accountants, but accountant-controllers. Thus, management accounting carried out by storekeepers became the basis for accounting, while responsibility for entering primary documentation was assigned to storekeepers. Managers now have the opportunity to quickly access quantitative and qualitative indicators.
By June 2008, the company achieved the following results:
■ implementation within the framework of 1C programs v 8: SCP" of CRM, SRM blocks; The work of the accounting department, financial department and human resources department has been partially reformed (38 jobs have been automated);
■ reduction in labor costs for logistics employees (from 31% to 18% of revenue); number of personnel (from 329 people to 222 people);
■ the ability to control costs not only by department (some costs were taken into account there as total), but also by business process (with the ability to drill down into categories A and B clients);
In accordance with the rules of marketing of three categories A, B and C. But the costs for the third category of customers in this company were not profitable to take into account in detail and therefore for category C the company calculates costs collectively, unlike customers of categories A and B.
■ the ability to model and analyze the plans of procurement specialists;
■ the ability to control the calculation of the commodity component for a unit of cargo (which allows you to estimate the size of the costs of its movement) for cargo flow to DIY stores;
■ management of credit history and pricing in custody and sales transactions. Since the company has been working with the majority of clients (who have been granted a loan) for a long time, it has already accumulated data on the payment history (for the loan) and if you analyze it, you can see that when the client is in the “high sales” zone, then the turnover of goods is high and they pay according to loan in a timely manner, and when sales are in the “low sales” zone, there are delays in loan payments. Therefore, the Logistics company took into account this feature of customer behavior and calculated a curve for each client on a loan, taking into account everything: both early repayment of the loan and delays in payments on it. Therefore, the sales manager does not just call the client with a question about when you will pay off the debt, but draws up a payment schedule based on the data schedule and the mutual benefit for the parties from the current situation.
RESULTS OF ANNUAL OPERATION OF THE NEW MODEL
A year has passed since the company's management announced that the first stage of implementation of planned innovations was completed. The company, like the whole country, has undergone a number of changes during this time due to the crisis situation, which made it possible (unlike the situation in 1998) to talk about achieving the planned profit targets. Summing up the results in July 2009, the company's general director noted that work on reforming management made it possible to increase its market share. The following factors contributed to achieving this result.
■ During the preparatory period, the company divided its assets into three components:
1) “breadwinner” - logistics business process;
2) “future breadwinner” - the “Production” project;
3) “innovation project” - development and production of new products.
With the onset of the crisis, it was easy for the company to mothball the third project, leave the second one to be self-sustaining, and direct all its efforts to the development of the first one.
■ Automation of the “main direction” allowed management, who had the opportunity to familiarize themselves with the operational data of management accounting, to make more informed decisions. In a situation where the cost of a container unit (pallet) and the additional rate for accepting cargo outside of working hours have undergone changes among most competitors who have switched to “standby” mode, the “Secure Storage” service has become very attractive in the new conditions. Overhead costs have decreased, unloading and shipping (as well as issuing documents) is faster than steel, because introduced an automated management system: in relationships with clients, paperwork and control over the storage/assembly of goods for shipment, which in turn contributed to the conclusion of new contracts with new clients.
■ Reducing labor costs and transferring most employees to a new payment system (mostly piecework) in the pre-crisis period allowed the company's management not to reduce personnel.
■ The “knowledge exchange” system that spontaneously arose and was supported by management allowed newcomers, who were additionally recruited in February-March 2009, to join the team without any problems.
■ The ability to analyze and promptly change purchasing plans made it possible to avoid having “dead” assets in stock at the time of the crisis.
■ By managing a credit history in a situation of delay in payment for supplies, it is “very rational” to calculate the transaction price and, based on the situation, make decisions that are mutually beneficial for all parties.
Netocracy is a new form of social management, when the main value is not material objects (money, real estate, etc.), but information. - Approx. auto
Meritocracy (literally “power of the worthy”) is a management principle according to which leadership positions should be occupied by the most capable people, regardless of their social and economic background. - Approx. auto
- INFORMATION TECHNOLOGY
- LOGISTICS SYSTEM
- LOGISTICS
- LOGISTICS PROCESSES
The article discusses the features of the use of modern information technologies in logistics, their role in optimizing logistics processes, and also highlights the main solutions that will allow logistics companies to achieve the most effective results.
- Optimization of work with transport in a warehouse as a factor in reducing logistics costs
- The use of mobile applications and their role in optimizing logistics processes
- Warehouse information security problems and ways to solve them
- Mobile application for automating the process of receiving goods into a warehouse
- Information technologies in the management of the social protection system
In modern logistics, the use of information technology is an integral part. Now it is difficult to imagine building and organizing the process of delivering goods without timely exchange of information and without a quick response to market needs. Today, it is almost impossible to ensure the quality of goods and services that are in demand by consumers without using modern information systems and software systems for planning, analysis and support for commercial decision-making in the logistics system. And precisely due to the development of information systems and technologies, logistics has become the predominant form of organizing product distribution in highly competitive markets in economically developed countries.
In modern logistics, information systems and information technologies usually mean a set of software and hardware tools and methods for producing, processing, transmitting and consuming information in systems that ensure the distribution of goods. The main direction in the development of information technologies in logistics is the integration of information flows and communication support for the transportation of goods. It is these areas that are associated with integration processes in the economies of countries with high development and represent a new scientific and practical direction - telematics. This direction is focused on the active use of information networks and computer systems. But the development of this direction in our country is associated with a number of problems, which are highlighted below:
- quality of equipment and its maintenance;
- personnel training and qualifications;
- integration of information processes;
- the cost of personal computers, communications and peripheral equipment;
- technological changes in processes that are associated with the processing and use of information in the field.
The constant development of information logistics is associated with the growing role of information in the economic process, and with the development of computer technology and communications. In the modern world, the value of information is determined by a number of factors:
- high percentage of information resources in total employment;
- high share of information in the final cost of goods and services;
- innovative function, which manifests itself in the generation of scientific and technological progress;
- the integrating function of information in the economic body of society, which to a decisive extent ensures a tangible effect of the functioning of the economy.
The relevance of the introduction and use of information technologies in logistics is associated with the continuous growth in the volume of data that needs to be processed. The usual, classical methods no longer adequately extract the required information from the data stream and this does not allow it to be used to manage the company. The most significant factor in management is the speed of data processing and obtaining the necessary information. The circulation of information has an increasingly serious impact on the efficiency of company management, and, accordingly, on its economic success. In addition, information has increasingly come to be called “strategic raw materials.” In developed Western countries, spending on information exceeds spending on energy. And with a reasonable, correct approach, these expenses produce results. Labor productivity is significantly increased by modern information technologies, which are built on the basis of the use of intelligent data processing and information warehouse concepts.
If the necessary information is received and modern technology for processing it in logistics systems is available, the company will be able to derive good benefits. Therefore, logistics departments that operate successfully place computerization as a priority and consider it as an important source of realizing the potential capabilities of logistics in financial aspects. If electronic data exchange networks are used with potential consumers, the enterprise will be able to significantly increase its competitiveness and market share.
The introduction of information technology tools in logistics is aimed at ensuring the movement of goods and interaction between company departments, as well as between firms in the process of purchasing and distributing goods. And therefore, based on this, the main direction of research should be the division of logistics systems into phases of material flow with a description of the supporting functions of logistics (transportation, inventories). It is important to note that information technologies themselves do not have value in the practice of organizing product distribution. That is, a regular purchase and installation of expensive specialized software will not lead to a solution to the company’s problems in the field of logistics. And in order for the logistics management system to give a positive result, a detailed description of all physical processes is required and only then the introduction of a computer program into the existing system or the development of effective software. Software becomes effective only in those cases when, during implementation and operation, programmers and consultants collect all feedback and wishes from users, do the appropriate analysis, select suitable solutions and customize the program for a specific company.
In logistics, information technology and automation remain key areas at the current stage of development. But, despite this, logistics information systems are developed on various computing platforms using different programming languages, which are often incompatible with each other, and are not created taking into account the requirements of international standards.
Since the global Internet is now becoming more and more widely used, technologies such as bar coding and electronic data exchange are turning from purely technical equipment into means of automatically identifying the behavior of modern business. Therefore, certification and standardization of supply chain processes and logistics services in sectors of the Russian Federation’s economy play a significant strategic role for the country’s economy.
A logistics system in production will be effective only if the necessary conditions are created for its integration into existing production processes. This problem can be solved if an appropriate information base is created. This includes up-to-date stock reviews, i.e. the availability of actual and planned orders, the maintenance of production main and intermediate warehouses and delivery times, processing, waiting and downtime and monitoring their compliance. To collect this data, the production system throughout the company has sensors and measuring tools, they help monitor the timing of current processes, their volumes and transmit this information for subsequent processing. The logistics system imposes certain requirements on its “measuring” network:
- reliable and fast (manual or automated) collection of necessary data on means of production and vehicles;
- the presence of an in-production decision support information system structure, which always contains up-to-date information on the progress of all production processes for each site.
In warehouse logistics, one of the most important competitive advantages and optimization goals is time - this is perhaps the main indicator of the activity of an enterprise that uses warehouse premises. Usually, the one who is able to deliver the goods to the consumer the fastest sets the conditions, others, in turn, are left to play by someone else’s rules, and almost always these rules are far from the most profitable for the “lagging” players.
Automation of all warehouse logistics processes helps to optimize, in addition to time, also the costs associated with maintaining more personnel, and, nevertheless, automation of the warehousing and storage processes themselves is just the tip of the so-called iceberg.
It is required to implement a unified system in order to optimize the entire process. This system will have to be able to automate all existing logistics processes in warehouse management, as well as provide the manager with information about the activities of the entire company.
Modern information technologies, which are intended for implementation in logistics, offer a number of optimal solutions for a variety of warehouse tasks. Starting from the simplest accounting and reaching modern technologies for automatic identification at all stages of product distribution.
The experience of implementing warehouse automation systems shows that the basic needs of companies related to warehousing are almost identical for most market participants. Firstly, this is the prompt collection and detailed analysis of information about the goods passing through the company’s warehouse complex, high speed of operations in the warehouse and accuracy of product identification, control of workers in the warehouse and the creation of a reasonable system of personnel motivation. These problems can be attributed to the needs of the basic level, and quite often their solution with the help of automated warehouse management systems will already be sufficient for a significant increase in the efficiency of the warehouse.
There are quite a few programs from foreign and Russian developers that automate warehouse operations. Among Russian developments, the most popular is the 1C-Logistics: Warehouse Management program, which is a joint solution by 1C and AXELOT.
Among foreign programs there may be highly specialized solutions for warehouse complexes of the WMS (Warehouse Management System) class. But recently, company managers, faced with the need to use warehouse space in one way or another, prefer to use ERP (Enterprise Resource Planning) class systems - a single integrated platform. It is capable of making business processes transparent for company managers to make important management decisions. Such products combine advanced functionality, openness to external interaction and flexibility, and allow the development of various industry solutions that represent a new stage in the development of company management systems. A system that is tailored and adapted to the tasks of the industry will help solve not only standard business problems that are provided by the built-in functionality, but also take into account the features that are characteristic of the business processes of a company in this industry.
There are not so many ERP systems on the basis of which industry-specific solutions for the warehouse complex have been developed. Among them, the most common systems are Microsoft Dynamics. Industry solutions based on these products provide companies with the opportunity to gain competitive advantages by creating the most efficient processes for processing inventory at the zone and cell level, improving the quality of customer service, increasing the number of orders processed, and reducing the cost of tracking the characteristics of batches of goods.
These industry solutions are designed for both manufacturing and distribution companies interested in developing an efficient warehouse facility that will enable them to handle large volumes of orders. At the same time, their important feature is a very convenient mechanism for generating management reporting, managing purchases and sales, as well as financial management functions, an accounting and analysis mechanism in various sections.
Most of the operations that are performed manually are automated, and this thereby helps to avoid a large number of errors that are associated with the human factor. For example, when selecting weighted goods, their quantity is automatically adjusted within the permissible deviation.
It is also important to note the significant role of logistics experts in solving special problems in logistics processes and in creating technical specifications for improving the warehouse information system. Since, when introducing changes in the technological process, expert logisticians are able to significantly reduce the company’s risks at the transition stage in a fairly short period of time, train employees and ultimately obtain the most positive result.
An information logistics system allows you to improve the management of increasingly complex logistics supplies. For small and highly organized production systems, such as synchronous production and Just-in-Time deliveries, the ability to properly manage the movement of incoming resources becomes increasingly important. Due to the activities of information logistics during the exchange of supply data, the efficiency of inventory management increases. Instant receipt of information about the movement of goods adds confidence in the speed of delivery of goods and makes it possible to replace real stocks with information flows. The exchange of supply data, which extends to a network of supplying firms and transport companies, enables the manufacturer to reduce the costs associated with ensuring the activities of the entire logistics chain. The manufacturing company receives tangible benefits by increasing its efficiency. This savings can be divided in certain proportions between three participants in the processes: supplier, manufacturer and transport company, while recouping the costs of creating and maintaining modern information systems and creating additional income from their use. The effective effect that results from the action of information logistics stimulates all people who are involved in the logistics process to maintain the achieved level of this process, as well as to invest new resources for its further optimization.
Bibliography
- Transport logistics [Electronic resource]. – Access mode: http://transportnaya-logistika.ru/
- Information and management portal [Electronic resource]. – Access mode: http://portal-u.ru/
- Gadzhinsky, A. M. Logistics: Textbook for higher and secondary special educational institutions / A. M. Gadzhinsky. – M.: Information and Implementation Center “Marketing”, 2006. – 432 p.
- N.V. Skuzovatova. Methods for optimizing warehouse processes in the effective management of enterprises. Magazine “Intelligence. Innovation. Investments" Orenburg, 2010. No. 3. pp. 44-51.
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