COSTS FOR IMPLEMENTING LOGISTICS INTO THE COMPANY
Man M., Nowicka- Skowron M.*
Abstract: The ways of approaching the logistic problems need the use of some varied
techniques and means, and the elaboration of a logistic project - which would aim
the entire company - mobilises multiple personnel for a period of a few months and claims
the intervention of logisticians within the logistic consultancy office, whom shall also act
after putting the logistic project into practice. The accomplishment of any logistic wide
change within the company needs an array of activities that may be grouped into: activities
aiming for the improvement of complying with the contractual terms for an immediately
subsequent month; activities having as aim the introduction of a logistic wide progress;
activities having as result the accomplishment and application of some company logistic
projects. (JEL: D61, D30, L22)
Key words: logistics costs, logistics project, logistics implementation.
The use of the method of analysis and synthesis corroborated
with the method of comparison in time and space highlights
that the accomplishment of a logistic project and its implementation into
the company, including the establishment of costs it creates, needs a multitude
of activities which may be structured thusly:
Activities aiming the accomplishment of an immediate profitability
Such activities are based upon three principles, such as: consideration
of globalising the operations as work technique, meaning the determination of the
priority of the processes in relation to their component operations; intensification
of the concerns of coordinating the information with the technological operations;
synchronising the immediate individual objectives with the finality of the logistic
project. See figure 1.
a) Priority of the process in relation to the component operations
The study of any operation must take into account its site - first of all -
within the process it is part of and therefore within the flow where it belongs to.
For accomplishing an efficient logistic change, it is recommended to use some
questionnaires, the filling of which shall offer answers to the following questions:
Do you always provide the coherence of the operational with the strategic? Do you
thoroughly know the representation of the flows? Have you repositioned
the functions? Have you performed the necessary upstream and downstream
standardisations? Are you prudent enough in framing the informational system
*Univ. Prof. PhD. Man Mariana, Universitatea din Petroçani, Romania
Prof. dr hab. Nowicka-Skowron Maria, Czestochowa University of Technology Faculty
£ 165 )
of the company? Have you communicated the data you have for drawing up
the logistic project?
Figure 1. Synchronising the individual objectives with the logistic finality
The answers to such a questionnaire allow the separate analysis of each
operation, as well as the analysis of the way of their being within the flow
b) Coordinating the information with the technological operation
One of the major causes for the occurrence of the primary disfUnctionality
- which shall be improved and even eliminated by the logistic project - consists
in the disaccord between information and technological operation, meaning
not harmonising the information with the technological operation which these refer
to. The factors acting over the logistic flow are multiple, and the downstream
activities are tributary to the coherence established between the information
available at a given moment and the effective accomplishment the flow renders.
c) Synchronising the individual objectives with the logistic finalities
The objectives that have an individual feature within the company
are not always adapted to the specific of the logistic activity. They often ignore
the impact they have onto the client's or company's interest. Another failure occurs
when there happens a change in the composition of a full order formed
by standardised products, a fact raising special problems for the product
programming service. The resolution of such disfunctionalities supposes
the establishment of real objectives, as well as the intensification of the capacity
of communication between the compartments belonging to various functions
of the company.
Activities which consider logistics as a means of introducing the progress into
The thorough analysis of a logistic system needs its structured
representation, which allows the anticipation of the logistic system reaction
to the changes it will undergo. Any structured representation supposes the covering
of three stages, such as: 1st Stage has as aim the retention of the logistic variables
£ 166 )
of the system, the selection of which, as well as observance possibility
and measure, lead to the optimum representation of the logistic system; 2nd Stage
consists in creating some patterns of costs attached to each physical variable
retained in the previous stage; 3rd Stage allows the predetermination
of the influence of various parameters over the system's behaviour and, therefore,
the pattern it represents.
a) Choosing the logistic variables
In order to choose the logistic variables, it is necessary to know
the elements of the logistic system. Let us take into account the example
of a central warehouse of finished products charged with supplying the regional
warehouses. It is tried to change its configuration. The objective aimed is therefore
to decrease of operating costs of the central warehouse. In order to attain
this objective, two elements shall be studied - which become logistic variables -
such as: flows that shall determine the necessary human and material means
of manutention at the entrance as well as at the exit; size of stocks that determine
the necessary storage volumes and surfaces. Each of these two elements must
be quantified into representative units of the real activity.
b) Patterns of costs
The patterns of costs consist in representing the cost variables of the logistic
operations, by starting from the logistic elements retained as logistic variables.
The transportation costs occurred by supply, indicated in lei/t, can be theoretically
represented by the straight line equation:
Ct=a + bx (1)
In fact, the transportation cost is actually represented by a family of equations, each
one of them referring to a certain transported quantity.
Total distribution costs. The total cost of the warehouses within a distribution
system is set according to the formula:
Canual = a + bQ (2)
Q represents the annual tonnage distributed by the warehouse.
The same result is obtained by using a linear regression performed over
the assembly of the warehouses, by taking into account two coordinates, such as:
the quantity sold annually by the warehouse; the operating cost (figure 2).
The representation in figure 2 highlights a class of homogenous
warehouses, the global costs of which are approximated by a straight-line and two
"abnormal" warehouses. Additionally, it may be observed the simple study
of the "cost per ton" is insufficient for grasping the particularities of these
warehouses. Therefore, the accomplishment of such patterns of costs becomes
an additional means of study and analysis, by highlighting the class of homogenous
warehouses and by discovering the abnormal points which a veridical explanation
must be found for.
vol.1 POLISH JOURNAL OF MANAGEMENT STUDIES
Man M., Nowicka- Skowron M.
a —ßxed costs
h — vnrinhle. cnrf
Figure 2. The coordinates of the total distribution costs
The monthly cost occurred by the operation of a warehouse may be
calculated with the formula:
Q represents the tonnage monthly transiting the warehouse.
The determination of this linear pattern supposes the evaluation of two
parts: a fixed part (for a given activity level) and a variable part (determined
by the managing tasks, administrative management tasks, surfaces, expenses
occurred by the structure and system of information).
c) Influence of representative parameters
The logistic study is influenced by the representative parameters:
frequency of deliveries and price of the products. The two parameters
are represented by the Histograms of orders, accomplished by volumes or weight.
They influence the decision of direct delivery from the factory or through
warehouses. The orders to be directly delivered (they have sufficient tonnages
or volumes) represent an important part of the total tonnages or volumes,
but occupy a relatively small ponderosity in the total order. Warehouses
are therefore necessary, the number of which must be set and the position
of which must be stipulated.
Activities occurred by the elaboration of the logistic projects
Any logistic operator must respond to two interlocutors: to a client
in the logistic chain, whom he/she cannot respond to unless they have a certain
degree of autonomy and only within the logistic regulations and procedures
established and within the capacities they have; to a certain hierarchic position
that must rethink its role for keeping the autonomies and for focusing the actions
^monthly =A + B' Q (3)
£ 168 )
POLISH JOURNAL OF MANAGEMENT STUDIES
Man M., Nowicka- Skowron M.
over determining the capacities, formation, control, management, by exceptions
and periodical recurrences of the major, strategic options. Such an evolution
is attained only by the logistic demarche, which fundamentally changes
the connections between various agents, the ratios with the hierarchical echelons
and modalities of exchanging information.
Any logistic project comprises four phases, such as: a phase for evaluating
the performance level aimed for; a phase for evaluating the current performance
level; a phase for defining the various scenarios of evolution; a phase for planning
in time the chosen scenario. See figure 3.
Is Phase 2*a Phase
Logistic perfo rmanc
e LOQS&C performance
3ra Phase Target
aimed Current •performance
Level of the structure
Ts T2 T3 Time
Figure 3. The phases of the logistic project (a, b)
£ 169 )
The logistic projects understood as an assembly of logistic demarches have
an impact over the structure as well as over the company's culture. The structural
changes have led to modifying the contents of some positions in the company
and to creating new rules in the dialogue and exchanges with the logistic suppliers
and providers. The thorough cultural changes of structures are those performed
on time. They keep the role as engine of logistics and encumber the occurrence
of some restrictions at a given time, in the way of applying certain competitive
logistics in practice.
 Dima I.C., Sistemul logisticii firmei, Tehnica Publishing House, Bucharest, Romania
 Auzony X., Le management du service
Éditions D'oiganisation, Paris, France
 Avril P., Le pilotage de l'incertain dans la distribution, Ed. D'organisation, Paris, France
KOSZTY WDRAŻANIA LOGISTYKI W PRZEDSIĘBIORSTWIE
Streszczenie: Sposoby podejścia do problemów logistycznych wymagają wykorzystania
różnorodnych technik i metod, a opracowanie projektu logistycznego - który będzie
dotyczył całego przedsiębiorstwa - mobilizuje pracowników do działania
w kilkumiesięcznym okresie i wymaga interwencji logistycznej pracowników biura
doradztwa logistycznego, którzy powinni działać także po wdrożeniu projektu. Realizacja
wszelkich i szerokich zmian logistycznych w firmie wymusza szereg działań, które mogą
być podzielone na: działania zmierzające do poprawy przestrzegania warunków umownych
bezzwłocznie dla kolejnego miesiąca; działania mające na celu wprowadzenie postępu całej
logistyki; działania mające efekty w postaci realizacji i stosowania niektórych projektów
logistycznych w firmie.
£ 170 )