Logistics projects in logistics outsourcing – part 1
However, it remains necessary to provide an answer to the question posed in the introduction: what exactly is a logistics project? As already mentioned, the degree of complexity of the environment, both immediate and distant, in which logistics currently operates, is very high. This requires the creation of a dedicated logistics project management methodology that takes into account all the conditions of this field of management. However, a distinction must be made here between projects carried out for the benefit of logistics and logistics projects. A project for the benefit of logistics is a project whose goals are not necessarily aligned with the logistics goals of a specific entity, but which conditions the functioning of logistics within that entity. Examples of such projects may include training for the logistics department or infrastructure projects, such as roads and transport hubs built for the needs of special economic zones or co-financed by Structural Funds.
Unlike projects carried out for the benefit of logistics, a logistics project is “a time-bound undertaking aimed at the implementation of a one-off and unique action intended to deliver a specific good at a planned time, to a designated place, and at a specified cost”. The above definition points to the integration of two areas – project management and logistics. It can therefore be indicated that a logistics project should not only contain the previously described features of a project but also take into account the requirements of the “logistics philosophy” outlined by Sołtysik. A different definition of a logistics project was presented by J. Witkowski and B. Rodawski. According to them, “A logistics project should be understood as a one-off, time- and budget-constrained undertaking (task), the implementation of which serves to improve the efficiency and effectiveness of product flows and the accompanying information in enterprises, supply chains, or spatial systems”. However, from the point of view of generalizing the long-term goal that is realized through the implementation of the project, a logistics project can be defined as: “A time, cost, and organizationally separated undertaking aimed at the implementation of a one-off and unique action optimizing a specific logistics process”.
It is also necessary to point out the features that distinguish a logistics project from projects carried out in other areas of an enterprise’s operation. The most important features include:
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the necessity to take into account logistics conflicts (cost trade-offs)
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the use of total logistics cost as a decision criterion during analyses
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the necessity of adaptive management
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the necessity of constructing a methodology for its implementation dedicated to the project
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the necessity of defining the level of customer service offered as a result of the project implementation, as well as within the project itself
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determining the role and location of the logistics project in the organizational structure of the enterprise.
Cost trade-offs are one of the most important factors that must be analyzed when planning a logistics project. They show the relationships between individual spheres of logistics functioning and are to a large extent responsible for the formation of logistics costs in an enterprise. When planning and subsequently implementing a logistics project, one must analyze the risk of logistics conflicts appearing and adopt appropriate countermeasures aimed at optimizing the aforementioned costs. The optimization of cost trade-offs is integrally linked to the use of total cost in a logistics project as the main decision criterion. Total cost is nothing more than the sum of individual partial logistics costs. However, the use of total cost as a decision criterion requires defining the logistics cost accounting in the enterprise, and consequently in the project, and performing appropriate calculations on this basis. The next two features that distinguish a logistics project from the general pool of implemented projects are closely related. Another feature of a logistics project is the adaptability of managing such a project. In the practice of implementing logistics projects, a poorly defined goal (the so-called project intent) is often assumed at the planning stage, which undergoes gradual detailing and refinement during implementation.
The article comes from the “Logistyka” magazine 1/2009.