1. Tendering Process (Bidding)
This process allows you to better research the logistics market and find the best offers at the most reasonable prices. Bidding in the Russian Federation is split into two types, open and closed, and can be carried out in either one or two stages, in the form of a contest or an auction. As part of a unified information system for public procurements and to eliminate machinations to do with tender proposals, there is in Russia an official procurements portal zakupki.gov.ru. There are, of course, other platforms too, including fee-based ones. The fee for access to tender platforms in Russia at the moment is 1,000 – 1,500 roubles a month.
Inviting vendors to participate can be done by telephone, electronic mail out, by placing a call for bids on the company website or on social media. If the tender is posted on the major platforms, further advertising is not required: vendors keep a keen eye out for new requests.
During the tender process, particular attention needs to be paid to the demands made of the service provider, to safeguard against unscrupulous partners: for example, to prescribe in detail the make/year of manufacture/capacity of a vehicle to be used.
After free registration with the website findtenders.ru, it is possible to see the results of those tenders which have taken place. We’ll have a look at one of them: intracity and suburban road haulage of loose bulk consignments (of coal, for example) in Kemerovo Oblast. With the highest price being 492, 590 RUB, the winner – ООО “Resurs Sibiri”– offered a price of 164, 612 RUB. That’s a saving of over 300%!
2. Motivating the Logistics Department
The introduction of extra motivation for employees in the logistics department will enable any company to reduce transport costs and make savings on logistics spending. Setting up a motivational system is not the most straightforward of tasks, and it is important to understand that employees need to be motivated not simply to carry out their duties, but to meet the objectives which lay before the logistics department more effectively and with better quality, and to introduce new technology and higher professional standards.
The main ways of increasing motivation are considered to be:
– awarding of individual bonuses. But the department’s functions and objectives, its plans, should be set out from the start. And the bonus system should really be introduced on the basis of key performance indicators (KPIs);
– the transition from a fixed payment system to one based on piecework. Earnings will depend on demonstrable results. The difficulty lies in the logistics department being a non-earning arm. However, such a system of payment can act as a stimulus to cutting costs;
– gamification – is a fashionable term for a well-known way of increasing the competitive streak. For example: there is a board hanging in the department with a calendar drawn on it, and on a column on the left hand side, fastened by magnets, are badges representing different cars. Each badge represents an employee. And in proportion to professional achievements, day after day, the cars move forwards. Everyone will be interested to know who, by the end of the month, will arrive at the finishing line first. A further stimulus would be a valuable prize or bonus for the winner of the “race”.
3. Outsourcing of the Logistics Department
If the company deals with only a small number of deliveries, then it is possible to do without a logistics expert on the staff and to use the services of one outside the company. At the present time, there are a large number of professionals prepared to work part-time or remotely, which can help the company to make substantial savings.
On the market there is a wide choice of companies or private individuals who can offer to meet your cargo delivery requirements. The cost varies and depends not only on the region but also on the customer’s needs: the cargo’s tonnage, its class, and so on.
The cost of cargo delivery around Moscow, then, is from 5 to 10 RUB/kg (the heavier the load, the cheaper the delivery costs).
In the regions, the cost is noticeably lower. In Khabarovsk, for example, a lorry and 2 freight handlers costs 1,000 RUB/hour. But in Perm a GAZelle plus freight handlers: around 600 RUB/hour.
4. IT Solutions
Using modern warehouse and logistics management systems enables costs to be controlled and human error to be minimized. Modern IT solutions for logistics include electronic document management, geolocation of the cargo and transport vehicles, personnel management (including payroll calculations), task management and plotting services, data storage in cloud services, and so forth.
The cost of such solutions depends on their functionality and the number of licences purchased: for one or several work stations. For example, a fairly well-known solution which is perfectly suitable for a small or medium-sized business and which integrates very well with the Bitrix system is 1C-Logistics: Warehouse Management 3.0. For one work station this will cost 24,500 roubles, and for 5 work stations: 105,000.
In Place of an Afterword
Logistical outlay can account for around 20–30% of production costs. Its reduction significantly increases competitiveness and can help the company to survive times that are difficult for the economy and for business. If we want to say which of these methods employed are the most effective, then for maximum effectiveness we would recommend applying all of these tools in combination. A spending optimization strategy should be put together step by step, introducing new solutions in successive stages. The important thing is not to rush, and before each change to evaluate the effect of those steps already made.