Key Criteria For A Well-functioning And Integrated Logistics System

Abstract

This term paper defines what is the integrated logistics system and considers the top key criteria for a well-functioning logistics system. Identify the degree of development of key factors of the Logistic System in Uzbekistan and give reasonable examples with statistical data.

Agenda:

1. Introduction
2. Integrated Logistic System
3. Critical criteria of elaboration
4. Development of logistic system in Uzbekistan
5. Conclusion

1. Introduction

Logistics started in a military environment. It was used to provide all the operations taken that would keep the army fighting the struggle. The service and production firms didn’t have logistics functions fifty years ago and the marketing department were the ones who took care of customer service. The inventory was the obligation of sales or manufacturing depending on the situation and position.

Logistics is still regarded as a new function and there are many companies that still haven’t made significant shift in the organizational structure. It’s extended for head managerial officers and headmasters not to be educated or experienced in logistics. As a result, they don’t view the potential contribution that logistics carries and think of logistics to be costly and consisting of menial tasks. However, most of managers are now moving away from functional departments but moving towards processes (http://blog.royaleinternational.com/2016/12/brief-history-of-integrated-logistics.html)1.

2. Integrated Logistic System

Logistics is the process of planning, implementing and controlling the efficient, effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of conforming to customer requirements (Council of Logistics management 1985)2.

The integrated logistics system ensures product promotion through a continuous and consistent chain of incremental value addition with the purchase of goods and services at the right time, in the right amount and form. Added value means that each stage of the logistics system includes actions that increase the value of the product or service for those who will receive the goods. In doing so, logistics can integrate distribution, production, and supply so as to synchronize rhythms and flows.

ILS is the integrated planning and action of a number of disciplines in concert with one another to persuade system approachability. The planning of each element of ILS is ideally developed in coordination with the system engineering effort and with each other. Tradeoffs may be required between elements in order to purchase a system that is: affordable (lowest life cycle cost), operable, supportable, sustainable, transportable, and environmentally sound.

3. Critical criteria of elaboration

Important tips for effective integrated Logistic System:

• • Proper Planning.

The first stage of performing a task is planning. Now, planning encapsulates various factors. It includes procuring the goods, storage facilities, and delivery of products to the exact location.

Apart from these, the other parameters are – time, transportation, and the price. A supply chain operative should be able to design the flow chart for the whole operation. The objective of planning is to attain maximum work in the least possible time. (https://cerasis.com/effective-logistics-management/)

• • Adopt automation

In the age of automation, technology plays a significant role in increasing the efficiency of an organization. Automation has a vital impact on the business process optimization. There are number of valuable software that can be deployed in the logistics process.

For instance, business process software can be integrated that allows timely updates regarding the motion of goods. The operator and the client/costumer will get detailed information regarding:

• The products that are dispatched from the supplier
• Acquisition of the goods/products at the warehouse
• Delivery of the goods/products at the final destination

This saves a great amount of time because manual interference is liquidated. Furthermore, exact tracking supports in improving overall process management.

Similarly, the account information and employee details can be operated using specific software developed for these tasks. Therefore, the logistics firm should comprise the technology for increasing productivity. (https://cerasis.com/effective-logistics-management/)

• • Value relations

The command is an essential aspect of an organization that is responsible for the rising. Whether it’s the deliveryman or the inventory manager, everyone should be ideal in their respective field of work.

For this, you need to invest in proper teaching and preparing of the employees. Regular training workshops keep the workers updated with the newly trends in the logistics industry. This aids in increased efficiency and gratification of the clients.

A logistics manager with perfect interpersonal skills is crucial for the company. There are times when the things don’t work according to the schedule or plan. In this situation, instead of panicking, you need a reliable person who can sort out the challenges and problems with utmost efficiency.

Moreover, the manager should have prestigious and competent contacts in the industry. This can be advantageous in tapping the business opportunities (https://cerasis.com/effective-logistics-management/)

• • Warehouse Management

Effective logistics management is imperfect without proper/right warehouse management. Storage operations are plenty dependent on the type of goods.

For instance, perishable goods, like dairy products, needs refrigeration facilities. Grains must be stored in moisture free environment. Similarly, the specifications vary according to the products. The logistics firm should aim at improving the warehouse inventory so that there is least wastage of goods.

Moreover, maximize the storage capacity of the warehouse. Usage of vertical storage columns is recommended. Effective realization of the software for sequencing the products is required because there should be no delay and setback while locating the product when the order is placed. The warehouse personnel should be well-trained and educated for the warehouse operations. (https://cerasis.com/effective-logistics-management/)

4. Development of Logistic System in Uzbekistan

LLC “Association for the Development of Business Logistics” in 2015 conducted a study on the theme “Development of logistics in Uzbekistan: current situation, forecast for the future, key tasks and priorities of companies”. The study was based on a survey among entrepreneurs of Uzbekistan, they were asked, on an anonymous basis, to answer 23 questions.

The survey involved 72 companies from various sectors of the economy of Uzbekistan. Of these, 64% (46 companies) are small and medium-sized businesses, 36% (26 companies) are big businesses. The analysis showed that of the total number of transport companies surveyed, only 18% have the opportunity to provide, in addition to the transportation itself, also additional services. . This suggests the need for training and professional development of their staff so that they can provide a wider range of new logistics services, or so that they can at least cover the standard set of services of a modern logistics company. The same picture is observed with freight forwarding companies.

Most of the companies faced problems in “Transport Logistics” (56% of companies). The second area where companies encountered problems is Information Logistics (about 28% of companies).

63% of surveyed companies indicated that they need to upgrade their transport logistics staff, 50% of companies need information logistics, and 42% of companies need more trained warehouse logistics specialists.

76% of companies consider the use of innovative solutions and technologies in logistics to be important. The most effective ways to optimize logistics processes, according to the respondents, are “Implementation of innovative solutions, systems and technologies (24% of respondents), “Better personnel management and personnel motivation ”(20% of respondents),“ Optimization of the process of transportation of goods ”(19% of respondents ). In 2015, the most pressing issues facing Uzbek companies were “Improving the level of customer service” (28% of respondents), “Personnel training” (27% of respondents) and “Cost optimization” (26% of respondents).

When asked what problems you would like to solve next year, many companies answered: “Personnel training and development” (18% of respondents), “Optimization of transportation” (15% of respondents), “Implementation of the latest information systems at the enterprise” (12 % of respondents) and ‘Optimization of information and documentary circulation’ (11% of respondents)

The reality of today is the need to improve the transport and trade infrastructure, which includes the creation of modern warehouse complexes for the storage, processing, warehousing and distribution of export-import goods. Undoubtedly, these warehouse terminals could serve both domestic cargo and cargo transit through Uzbekistan. The creation of Logistics Centers with functions and all the proper infrastructure of the “dry port” could be a good solution for optimizing the international transport of goods.

Currently, of the existing warehouse terminals in Uzbekistan, only a small amount meets modern requirements for such complexes. They are specialized and export-oriented (for example, cotton terminals) or created to provide freight transportation and maintenance of free economic zones (Navoi FEZ and Angren FEZ)

The geographical location of Uzbekistan is a strategically important aspect and stimulus for the development of a network of modern warehouse complexes and logistics centers that could minimize the logistical costs of manufacturing and trading companies for the delivery of goods

(http://www.adbl.uz/ru/vse-o-logistike/otchet-po-rezultatam-issledovaniya-sostoyaniya-logistiki-v-uzbekistane-za-2015-god)

5. Conclusion

In conclusion, we would like to say that in Uzbekistan the logistics is not sufficiently developed and the development of integrated logistics in Uzbekistan does not meet the above criteria.

Most articles indicate a low level of customer satisfaction, inventory and warehouse management.

But according to the latest information of stat.uz, Uzbekistan intends to improve strategic relations with Korea, including transport logistics and transportation. In our opinion, it is necessary to increase investments and attract foreign specialists

References:

1. http://blog.royaleinternational.com/2016/12/brief-history-of-integrated-logistics.html
2. Council of Logistics management 1985
3. https://www.slideshare.net/maxgalarza/integrated-logistics-51788673
4. https://cerasis.com/effective-logistics-management/
5. https://en.wikipedia.org/wiki/Integrated_logistics_support
6. http://logistika.uz/en/info/articles/4752
7. https://stat.uz/ru/press-tsentr/novosti-uzbekistana/5650-otnosheniya-mezhdu-respublikoj-uzbekistan-i-respublikoj-koreya-podnyaty-na-uroven-osobogo-strategicheskogo-partnerstva
8. http://adbl.uz/ru/vse-o-logistike/obzor-sostoyaniya-transportnoj-logistiki-v-uzbekistane-2016-g.
9. http://www.adbl.uz/ru/vse-o-logistike/otchet-po-rezultatam-issledovaniya-sostoyaniya-logistiki-v-uzbekistane-za-2015-god