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Minimizing transport service costs in the procurement process of a manufacturing enterprise

The essence of the logistical approach to flexible response to dynamically changing customer expectations implies the need for coordination of processes, and primarily the synchronization of their flow in time and space. New enterprise management patterns emphasize the role of the time factor. Strategies assuming so-called time compression lead to the elimination of time segments where no value is added, but additional costs are generated. “…time compression represents the youngest competitive strategy; it is defined as a strategy ensuring the achievement of the most for the lowest costs, in a shorter time”

1. The time factor thus takes on a new meaning in assessing the efficiency of processes occurring in an enterprise.
It should be considered on two levels: at the production level and more broadly – in the supply chain, which covers a very wide range of diverse activities and actions, starting from procurement logistics. Here, basic activities are found, such as: purchasing, transport, packaging, and storage. These are a consequence of the physical flow of material streams. Transport issues occupy a special place in the logistics chain.
One aspect of assessing transport efficiency is the unfavorable – compared to Western enterprises – level of transport productivity. This is a result of, among other things, prolonged, unjustified waiting for service – unloading at the transshipment yard or loading at warehouse ramps. Long waiting times in queues mean a lower level of utilization of transport means, and consequently, rising costs. As K. Kowalska states, “… achieving the goal, i.e., profit in the case of purchases, mainly means reducing costs, which is achieved through: […] lowering transport costs”.

One of the strategic decision-making areas related to transport in procurement is the organization of the supply base structure. Decisions made in this area concern the number of suppliers and the organization of deliveries. In turn, the number of suppliers is linked to the choice between sourcing from many sources or from one. The consequence of the adopted supply base structure is the scope of administrative activities related to entering purchase documents into the IT system, and then unloading the shipment, i.e., dispatch. The task of dispatch is to unload the shipment from transport means to storage locations as quickly as possible, so as to maintain the efficiency of material flow. The unloading point can be a “bottleneck” in the flow of goods.
Optimization of logistics processes related to procurement, including the optimization of loading and unloading “technology”, requires the use of mathematical modeling procedures, and the results obtained provide concrete guidelines for the company’s management. The issues addressed in the article concern the optimization of the transport system in the conditions of a manufacturing enterprise. When speaking of a transport system, deeper dependencies must be taken into account, not just simple connections between system elements. Logistical relations in the area of transport result from the adopted supply base structure and are characterized by a multitude of criteria. This means that from a decision-making point of view, we are dealing with a multi-criteria optimization problem. For the purposes of the presented study, the optimization criterion adopted was the minimization of system costs, or more precisely – the total costs of transport units waiting for service (unloading) and service costs. The optimization calculation is conducted using the example of Alfa SA, a company operating in the construction finishing materials market. As one of the larger manufacturers in the industry, Alfa SA supplies the Polish market and foreign markets. The company’s turnover reaches approximately 400 million PLN annually, and it employs 900 people. The company supplies the market with products through approximately 200 commercial partners in the country and about 100 abroad. The analytical process is conducted using elements of queuing theory.

The article comes from the journal “Logistyka” 1/2008.

L2008-1s72.pdf