K. Management of material resources: an essay on commercial logistics.


K. Management of material resources: an essay on commercial logistics.

In this regard, distinguish between general and subordinate local logistics tasks.

One of the general tasks of logistics is to create an effective integrated system of regulation of material and information flows and control over them, which would ensure high quality product supply.


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Logistics: concepts and functions. Abstract

The abstract considers the concept of logistics, depicts its functions and goals

Logistics concept. Logistics as a comprehensive management of material and information flows within the system should be based on the following principles:

Consideration of the movement of material resources from the primary source to the final consumer as a single material flow, which involves the implementation of such processes as transportation, loading, unloading, moving, warehousing and storage of materials. Introduction of organizational and managerial mechanisms for coordinating the actions of specialists from various services involved in material flow management.

The result depends on how successfully it is possible to integrate into the system a set of measures to rationalize packaging, unify cargo units, improve warehousing, optimize the size of orders and inventory levels, choose the most profitable routes for moving materials and more.

Under the material flow is understood a set of raw materials, semi-finished products that come from suppliers in the form of labor to production units and, turning there into finished products, through distribution channels come to consumers. Circulation of material resources includes their movement to the warehouse of the enterprise, in the shops of transportation of work in progress within the shop, between the shops and, finally, the movement of goods of finished production outside the company in the sphere of their consumption … Consideration of these formally heterogeneous, but the content of a single process as a whole is important.

Obviously, the functions associated with the formation of the material flow of an industrial enterprise are technologically related, and the cost of their implementation is economically dependent. This means that changes in one activity affect others, and attempts to reduce individual costs without considering others may lead to an increase in total costs.

Insufficiently operational actions of supply services can negatively affect the functioning of the production and dispatching department, cause disruptions in its work, and thus disrupt the activities of the sales department. Optimizing the functioning of production units can lead to overloading of warehouses with some types of products and shortages of others.

Reducing transportation costs by reducing the speed and reliability of delivery or abandoning special expensive packaging can be costly for the company and, in particular, lead to increased storage costs. The larger the batch of parts that are put into production, the lower the cost of retrofitting the equipment, but the cost of storing work in progress increases. Conversely, as the batch size decreases, storage costs decrease and equipment upgrades increase. Transport costs depend on the location of production facilities, warehouses, technical control points.

Until a few years ago, the main problems for the creators of logistics systems were the physical flows of goods and raw materials. Under the information support of the physical logistics process of movement of goods from supplier to consumer was understood only accompanying information. With the development and spread of logistics systems in enterprises and firms, there was an increasing need for the development and implementation of logistics information systems, which would allow to organically combine all logistics subsystems.

Formation of information system – a complex and multifaceted process, which uses all the achievements of modern information technology, the latest computer systems, each of which makes it possible to successfully manage production processes through the use of adequate information technology, methods and forms of information support logistics system as a whole.

The new tasks set for the organizers and managers of production to implement logistics principles require them to create an information infrastructure that would allow them to collect, organize and transmit information in accordance with the established tasks. The successful process of production is impossible without identification, standardization of sources of information, its processing and transmission, ie without the creation of a computer network of production.

The capabilities of such a network are evidenced by the achievements of the communication networks of IBM’s Western European subsidiaries. For example, all IBM production units in Germany are integrated for information support via a computer network, which is the basis of the PROFS (Professional Offise) communication system. This system allows anyone who has connected to it to contact any division of the company.

Today, more than 26 of the 30,000 employees of the German subsidiary of IBM are integrated into this system. The production network along with the PR OFS system creates the infrastructure for the entire information flow of the firm. In addition, this network is an integrated basis for another promising network of more than 300,000 IBM employees in Western Europe.

Logistics information support also requires appropriate software, thanks to which the entire logistics system, starting with the subsystems, would work as a whole. The main thing is to unite all departments through the created infrastructure (communication and information systems). This will allow each subject of the general production process to contact any of its other subjects. The communication system should cover all suppliers and customers of the enterprise.

Information logistics provides new opportunities for the organization of the necessary information in accordance with the principles developed by logistics, in a clear system, the main function of which is to receive, process and transmit information in accordance with the tasks set before this system.

According to reputable experts of some Western companies, the information infrastructure created both within individual production units and in the whole company on the basis of modern high-speed computers, appropriate software, transforms information from an auxiliary (service) factor into an independent production force that can, in contrast to other factors, constantly and in a short time to increase productivity and minimize production costs.

However, despite the already proven in practice the effectiveness of information logistics, it is only one element of the overall logistics system, and its successful operation is possible only if the transition of all production to logistics principles. In turn, a comprehensive logistics approach in the field of procurement, transportation, warehousing, production, sales and distribution is absolutely impossible without an information system.

The main provisions of commercial logistics are:

1. Implementation of the principle of a systematic approach, ie optimization of material flow within both the enterprise and its units. However, the maximum effect is possible only with the optimization of either the total material flow from the primary source of raw materials to the final consumer, or some significant parts of it. In this case, all parts of the material chain, ie all elements of macro- and micrologistics systems must work as a single coordinated mechanism.

2. Refusal to produce universal technological and lifting and transport equipment, use of equipment that would meet specific conditions. Flow optimization through the use of equipment that meets specific operating conditions is possible only in the case of production and mass use of a wide range of different means of production. That is, the application of a logistical approach to the management of material flows is possible only with a high level of scientific and technological development.

3. Humanization of technological processes, ensuring modern working conditions. One of the elements of logistics systems is personnel, ie personnel who responsibly perform their functions. The logistics approach strengthens the social significance of activities in the field of material flow management, creates objective preconditions for attracting personnel with higher labor potential to the industry. At the same time, working conditions must be adequately improved.

4. Accounting for logistics costs throughout the logistics chain. One of the main tasks of logistics is to minimize the cost of bringing the material flow from the primary source to the final consumer. The cheap lab report writing 24 solution of this problem is possible only under the conditions when the system of accounting for production and circulation costs makes it possible to separate the costs of logistics. Thus, there is an important criterion for selecting the optimal version of the logistics system – the minimum total cost throughout the logistics chain.

5. Development of service services at the modern level. Today, opportunities to dramatically improve product quality are objectively limited. Therefore, the number of enterprises that resort to logistics services as a means of increasing competitiveness is increasing.

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