Agricultural enterprises operating in a free market, just like companies in other industries, should seek sources of competitive advantage and higher profits on several fronts. One way is to distinguish themselves in the eyes of customers from their competitors, for example, through the diversification of their offer. The second path, which seems more advisable for agricultural enterprises, given the existence of food overproduction and production limits, is the permanent search for opportunities to reduce operating costs. One way to implement this second path is to introduce the concept of logistics into the sphere of enterprise management, which, generally speaking, focuses on optimizing material and information flows within the enterprise as well as throughout the entire supply chain [Christopher 2000, Blaik 2001]. Given the above, the issue of logistics costs, and in particular their comprehensive approach, becomes key.
The problem of a comprehensive approach to logistics costs, despite its enormous importance, does not find its proper place in economic literature, and even less so in the practical activities of enterprises and market entities. And how important this issue is can be evidenced by the fact that in highly developed countries it is estimated that on average 20 – 30% of costs in enterprises are logistics costs [Rzymyszkiewicz 1995]. Attempts made in Poland to identify, assess the level and structure of logistics costs still do not have the character of systematic and comprehensive research [Blaik 2001]. A significant limitation to the development of a comprehensive logistics cost accounting is the use of traditional cost accounting methods in enterprises, which do not provide the necessary information because they are not adapted to explain the issues of modern logistics in its process and market dimension. Furthermore, they do not take into account the separation of logistics costs from other enterprise costs in the entire value creation system. Taking into account the above considerations, the article attempts to estimate the level of logistics costs and determine their structure in selected large-scale agricultural enterprises. These studies should be treated as pilot studies, intended to orient us on the scale of the phenomenon and to serve as a basis for developing methodological foundations for determining logistics costs in this type of enterprise.
The research was of a pilot nature, conducted in the years 2004 – 2007 in seven large-scale agricultural enterprises located in Greater Poland. These were multi-site enterprises – having from 2 to 5 plants in their organizational structure. The area of the analyzed enterprises ranged from 613 ha of agricultural land to 3,628 ha of agricultural land. The enterprises conducted typical agricultural production (crop and livestock), and also engaged in agricultural processing in the field of producing concentrated feed mixtures for their own needs and raw spirit based on their own raw materials [Wajszczuk 2005, Wajszczuk 2008].
Logistics costs can be viewed in different cross-sections. Due to the cognitive goal of the pilot studies, which was to determine the level and structure and the connection of costs with the basic types of logistics processes in the enterprise, calculations were made based on the division of costs according to the basic components of logistics processes. Three basic cost components of these processes were identified, i.e., physical material flow costs (Kfpm), inventory costs (Kz), and information process flow costs (Kpi).
An undoubted advantage of using such a division of logistics costs is the possibility of linking them with the types of processes that determine these costs. However, the difficulty was separating these costs from the enterprise’s accounting system due to its traditional layout and the lack of appropriate IT systems presenting these costs in other perspectives.
Within the individual cost groups, the following components were included, reflecting the specificity of an agricultural enterprise:
a) physical material flow costs (Kfpm)
– depreciation costs of fixed assets involved in physical material flow logistics processes (Kafpm)
– lease costs (lease rents for the yard, garages, sheds, internal roads) (Kdfpm)
– labor costs (Kpfpm)
– costs of consumption of materials, fuels, and energy (Kfpm)
– external transport service costs (Kzfpm)
– other costs (taxes and insurance for means of transport, repairs and maintenance of equipment) (Kinfpm)
b) inventory costs (Kz)
– lease costs (lease rent/depreciation for warehouse buildings) (Kdz)
– labor costs of warehouse workers and other persons participating in the storage process (Kpz)
– loss costs (Kuz) (aging of inventory, losses during evaporation, pests, diseases)
– other costs (warehouse insurance; energy; capital frozen in inventory) (Kjnz)
c) information process costs (Kpi)
– labor costs (including costs of material and energy consumption) (Kppi)
– depreciation costs of information equipment (Kapi)
– cost of telecommunications services (Kupi)
The article comes from the journal “Logistyka” 3/2011.