Loading-unloading

- transportation costs; the proper equipment at a store house allows accelerate the load-unload process, thus reducing idle-stay transport time;

- proper controlling and documentation (information system)

Warehousing and storage

Main principle – optimal utilization of a store place and equipment. Also the conditions have to be correspondent to the product characteristics. Systems of: “address space”, or “free choice space”.

Transportation and expedition

Economically reasonable – centralized delivery by a warehouse. Combination of cargoes and routes, smaller deliveries become possible (less inventories), reduce of transp. Costs.

Managing packages (containers)

Multipurpose (reusable) utilization.

Standard pallets: 1200x800 and 1200x1000 mm. Therefore – unification of transport package to allocate on the pallets.

Relative unit of space: base module (базовый модуль) – rectangle, 600x400 mm, which has to be placed multiple times on a store place (transport platform, work surface of store equipment). By using the common module it enables to optimize the sizes of deliveries throughout the material flow.

On the grounds of “base module” the package sizes are developed – by virtually creating a “grid” (сеть) of the pallet work-space and therefore defining external and internal parameters of packaging.

Services:

Sorting and marking; quality controls; expeditors; information services (systems); leasing of store-place; concluding treaties (contracts) with transp-n firms; other.

3. Management of inventory systems

System approach being used to satisfy material requirements at all levels of material flow.

System of inventory management – an aggregate of rules and indexes stipulating purchasing volumes and time frames for inventory replenishment.

The most useful system parameters:

• rerun (restart) purchasing point – minimal (controlling) level of inventory where new purchase necessary if reached;

• size of separate purchase;

• normative level of inventory;

• procurement sequence, or replenishment periodicity; others.

Technological inventory systems (ordinarily used):

• inventory system with a fixed periodicity of purchase orders;

• system with a settled size of purchase order;

• system “minimum-maximum”;

• system with a settled periodicity of inventory renewals till the planned level.

The first two systems are appropriate when inventory being uniformly utilized; stable process.

System with a settled size of purchase order

Relatively simple

Parameters: volume of delivery and “point of purchase order”

Algorithm:

Volume of delivery is fixed. Periodicity – might be different, depending on material consumption in the logistic system. Point (time) of purchase order – when inventory level drops till the critical line, which is called “point of purchase order”.

The critical line should be enough to ensure linear production process until new inventory comes into the logistic cycle, leaving “risk stocks” untouchable. The critical line to be calculated according to consumption history for the time lag between filling an order and actual inventory delivery to the warehouse. In the taken system such time leg is considered as a constant one.

System aim – to avoid inventory shortages.

Implementation if:

High absence of inventory costs; Restrictions put by the supplier on a minimal purchase order size; High storage costs; High prices for the inventory to be ordered; other.

In practice: orders size depends on occasional organizational issues – freeing up storage space, price discounts, etc.

The unbroken inventory records are required (not to miss the “point of p.o.”). Bar codes.