MAGAZINE №4 (75) August 2016


CATEGORY Sourcing 


In supply logictics one of the strategic objectives is to «Make or Buy» (MOB) decision. For example, a production company before entering into contracts with suppliers, must answer the question: Is not it more profitable to the company to produce individual components for the assembly of the finished product than to buy them from other companies. For traders, a similar problem can be solved, for example, in relation to the procurement of logistics services, as an alternative means of transport agent, is considered the acquisition and operation of their own cars. Thus, companies can achieve significant savings in operational costs and significantly improve the profitability of the business.

In carrying out various activities on their own, the cost structure of the company is a fairly wide range of calculation items, most of which does not depend on the activity of the company in the market. On the contrary, resorting to the services of intermediary companies, the number of elements of costs narrows considerably and most of them goes into the category of variables. This arrangement, on the one hand, allows you to focus on the quality of products and the most complete satisfaction of end users, but at the same time, leaving without due attention to the costly side of the issue and its impact on the profitability of the company.

In solving the problem «Make or buy», used a model «Total Cost of Ownership» (TCO), which in addition to the selling price of the supplier considered wholesale prices, terms of payment and the amount of transport costs, which in turn are determined depending on the type of transport. In addition, the total costs were taken into account marketing and transaction costs associated with the analysis of the market of goods and services, as well as the alignment of interaction with suppliers.

As a result of the calculations made in the article, it was shown that in spite of the generally accepted lately attractiveness of outsourcing, with sufficient scale and regularity of the business, expanding the list of functions and the implementation of additional activities, can have a positive impact on the economic results of the company.


Published in Sourcing

MAGAZINE №6 (71) December 2015


CATEGORY Optimization and economic-mathematical modeling  Inventory management  Sourcing


Modern business is increasingly interested in the methods, models and approaches of the logistics theory, with the help of which it is possible to find internal reserves in order to provide resource conservation. Primarily, this is due to the fact that the increasing competition level in the goods and service market in Russia and the impact of various types of crisis lead to the gradual limitation of the profit margin. As a result, profitability increase is not about retail margin and sales volume, but about reducing current expenses, associated with the vatious aspects of the company business, including logistics.
Stocks requirement planning (which concerns all logistics function areas at whole and purchasing management in particular) can be considered as the typical example. It is known that overstocks can reduce profit margin because of additional costs, which are the following: storage costs, losses because of immobilization and formation of non-liquid assets (as a consequence of lower turnover). Most companies are faced with a situation where at the same time with an increase in sales volume, profitability is declining. Management decisions which are made periodically do not lead to the desired results. Moreover, they can make situation worse because of incorrectly established links between cause and effect.
In addition, when analyzing the current state of the inventory management system, it is difficult to assess how effectively interact with each other several divisions of the company involved various aspects of logistics activities.

It is possible to identify causes of these phenomena using correlation and regression analysis with the help of which the establishment of indicators interrelation can be made. These indicators reflect the results of company business activities when the interrelation between them is not functional or it is not ordistored by the imposition of indirect and incidental factors.

In order to use correlation and regression analysis successfully, systematic accumulation of statistical data on changes in the various indicators concerning the company stocks is needed. In particular, they are the following: income and sales volume (sending into production for industrial companies), stock balance, etc.

The inflation, the income level of residents, interest rates on bank loans, the cost of advertising, social and demographic structure of society and others can be noted as factors, which have direct or indirect impact on the individual business organizations efficiency. 


Published in Inventory management

Magazine №3 (56) June 2013

AUTHORS  Levina T.V.Yagudina D.E.

CATEGORY  SourcingCorporate logistics retailers


In article the competitive benchmarking among the largest Russian network retail companies concerning supply strategy is carried out, the main forms of supply are analysed and the technique of a choice of a form of supply on the basis of Kralich's modified matrix and use of technology of the AVS-XYZ-analiz  is offered.

Keywords:  form of supply  Logistics supply matrix Kraljic ABC analysis XYZ analysis supply strategy centralized control decentralized control


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