Download Development of a Macedonian Logistics Services Firm

Macedonian Project Team
Development of a Macedonian
Logistics Services Firm
Bucharest, 01-03 november 2007
Content:
A. INTRODUCTION
The role of Logistic
The National Concept for Logistics Support
The effort of developing Macedonian Logistics
Service Firm
B. BUSINESS CONCEPT
Goals of Macedonian Logistics Service Firm
Macedonian Logistics Services (MLS)
Supply Chain Management (SCM)
C. CONCLUSIONS
There is a distinct need for the inclusion of the topic
of “Logistics” into ongoing initiatives of the
Government of the Republic of Macedonia in order to
faster the economic development of the country and
at the same time to stay on the track to the EU and
NATO.
Logistics and its role as an enabler, revenue
generator, as well as an inhibiter, play a key and
critical role in commerce and government.
In the global economy customer-oriented business
environment, superior supply chain performance is a
prerequisite to becoming and staying competitive.
• The National Concept for Logistics Support
of the Defense and the Army of the Republic
of Macedonia” was developed two years ago.
• That document recognized public – private
partnership as an essential component of
security and defence policy.
It also gives opportunity for faster development of the
national economy especially by using best practices from
the business sector in the sphere of security and defense
and vice-versa.
Both sectors- Army and bussines sector have benefits of
implementation of contracting logistics.
It can help in decreasing the number of personnel and
creation of wholy operational system, where logistic
system as well as aquistion can functione properly.
On the other side, implementation of the system of
contracting logistics will generate also great benefits for
the business sectors.
Logistics system of the Army is well developed,
logisticians are well educated and skilled workers, which
can be, guarantee for their influence on business circles
and processes.
This is the main idea in the effort of
developing Macedonian Logistics Service
Firm, which could perform many different but
compatible tasks as logistics support of the
Army, support of business sector,
consultancy, education and training of
logistics personnel for the business
community etc.
Logistics and its role as an enabler, revenue
generator, as well as an inhibiter, plays a key and
critical role in commerce and government.
Its insertion into the enabling environment mix will
provide critical connectivity between several major
components of government and industry that are
associated with manufacturing, regulation, trade,
and distribution, to name a few areas.
To put logistics into perspective, at the macro-level
annual global logistics expenditures exceed $3.5 trillion
USD, nearly 20% of the world’s GDP, making logistics one
of the last frontiers for major corporations to significantly
increase shareholder and customer value. In the US, total
logistics activities make up 15-20 percent of finished
product costs. Moreover, at the heart of every effort to
improve organizational logistics performance is supply
chain efficiency.
At times there is confusion surrounding the terms logistics
and supply chain management (SCM).
However it can be explained that the supply chain is the
network of facilities (warehouses, factories, terminals, ports,
stores, and homes), vehicles (trucks, trains, planes, and
ocean vessels), and logistics information systems (LIS) that
are connected by an enterprise’s supplier’s suppliers and its
customer’s customers.
Logistics is what happens within the supply chain.
Logistics activities (customer response, inventory
management, supply, transportation, and warehousing)
connect and activate the objects in the supply chain. Each
one of the things listed in this explanation make up Logistics
and by their size provides some insight as to the impact of
Logistics on the economy of Macedonia and the region.
The challenge for Macedonia, Logistics, is to
develop capacities (companies and government
agencies) in order to improve the performance of
the organizations they support which can lead in
final term of impede progress in the whole
country.
Strengthening that kind of institutions will also
help the country to receive also grants and
loans, including government ministries and
executing agencies as well as nongovernmental
organizations. It is a key to improving the
efficiency and effectiveness of development
assistance.
That is why it is critical at this point in Macedonia’s reform
process to ensure that Logistics is, first included in the
enabling environment mix, and secondly it is brought into
the mix in a pragmatic, systematic way that addresses its
multiple components.
Consequently, in any effort to diagnose and improve the
performance of an organization, in this case Logistics, it
requires an understanding of the forces outside the
organization that can facilitate or inhibit that performance.
Enabling environments support effective and efficient
organizations and individuals, and creating such
environments is becoming an increasingly important
aspect of development assistance.
The enabling environment is made up of the
administrative, technological, political, economic, sociocultural, and stakeholder factors.
More specific, the enabling environment is a set of
conditions, often inter-related, that impact on the
capacity of citizens and civil society organizations to
engage in development processes in a sustained and
effective manner, whether at the policy, program or
project level.
All of these conditions and factors are to be addressed
and, put into the context necessary for Logistics to be
acknowledged and inserted into an enabling
environment initiative.
BUSINESS CONCEPT
Macedonian Logistics Service Firm stated goal has to be to
contribute to wealth creation and sound and sustainable
development of society. Its objective is to generate new
knowledge and solutions for their customers, based on
research and development in technology, the natural
sciences, medicine and the social sciences.
However, the basic task of each company is profit
maximization but it must be realized through its effort to
optimize its support efforts in Macedonia, in the area of
Logistics.
Final goal for the company is to become a reputable
service provider that can make interpret the requirements,
engage and understand the enabling environment
conditions and factors, and know how to develop and
implement Logistics for profitability and sustainment, as
well as support economic development of the country.
Macedonian Logistics Services (MLS) provider is to be a
private company working in collaboration and in
association with an established regional logistics
services provider, that offers a full range of business
logistics services.
It will have a direct connection to the Macedonian
Transport Association, Macedonian University System,
Regional Transport and Logistics Associations, as well as
Macedonian and Regional Manufacturers.
The MLS will provide a range of Logistics services. In the
area of Logistics Consultancy services will includes
strategic planning, project assessment, development, and
management, individual process design and modeling,
and implementation.
The area of Education and Training will
include collaboration with the Macedonian
and Regional education foundation that
provides Supply Chain Management
curriculum and instruction and professional
development, and will seek to install
standards and certification.
At this time, there are several key areas that can be
exploited immediately in Macedonia reference
Logistics.
• They are, the banking sector’s needs for cash
management, the health sector’s need for medical
logistics, the government’s need to integrate the
national procurement system, the need for the
development of a national distribution hub, the need
for improved production logistics, the need for
automated inventory control for asset visibility and
accountability, and the need for SCM curriculum
development and instruction within the functional
areas.
• The basic idea is that Macedonian logistics services
firm offers a range of services to the commercial,
government, and educational sectors.
It has to be capable to offer support to the
Army as well as to the business sector.
In order to be efficient it is necessary to
connect the education base with the
commercial and government sectors that can
provide education and training, consultancy,
and IT insertion.
It means necessity of developing training and
education on SCM, Transportation Logistics as
well as importance of bringing commercial
logistics through the various facets of SCM into
the bilateral enabling environment mix.
The crucial problem in development of that
business idea will be challenges with the change
of mentality of the people who cannot get rid of
communist legacy.
There are also other reasons that can jeopardize
realization of that idea and make that company
profitable (government/laws, change mindset,
business environment).
How to make this idea operational?
Government has to entertain working with a "developing" logistics services
consultancy providing its "credibility and financial backing" through working
arrangements.
The best way is to make Government shareholder in that company with
maximum 49% of equity capital. Government investments can be in fixed
assets (buildings like warehouses, restaurants, laundry services, gas station,
maintenance capacities, but also in vehicles, computers etc).
In order to make significant progress in human resources management, this
MSC has to find partner (universities in the country) to work SCM and educate
efficient personnel for the business sector.
There is no doubt that to successfully compete in today's fast-paced business
world, supervisors and managers trained in supply chain management are
essential.
They lead the teams responsible for the flow of goods and services throughout
our global economy. These leaders must effectively and efficiently managing
the activities of warehousing & logistics, sales and marketing, control and
governance of their products and services to their customers.
The Syllabus of that educational program has to
provide a framework that allows participants to
integrate and apply proven supply chain
management strategies within their scope of
responsibility, by examining managerial behavior,
organizational strategies, incentive alignment, legal
considerations, operational execution and other
management topics.
The Logistics and Supply Chain Management,
together, integrate all the activities involved in the
procurement, storage, movement of goods, and
payment from the initial suppler to the final
customer. It means that whole business cycle
depends on efficient functioning of SCM.
• The educational program has to provide orientation,
training, and practical application of the theory, concepts,
systems, processes, and technologies used in the
functions of logistics and its supply chain, with a focus on
their integration and management.
• The training courses have to provide the student with the
knowledge and skills associated with current practices in
Logistics and Supply Chain Management areas that
include:
– Purchasing, transportation, warehousing, and inventory
management,
– Operations, quality control, and project management,
information technology and supplier relationships,
– Organizational development, staffing and supervision, and
outsourcing.
Conclusion
The logistic support of the Army, using the
fundamental elements of logistics (requirements,
procurement, and distribution) and the basic
aspects of command (organization, planning,
execution and supervision), forms a bridge
between the economic system of the nation and
the operations of the combat forces.
Efficient use of logistics experiences in business
sector can create possibility of better
engagement of economic and industrial
resources of the country.
We can conclude that national economy develops
under influence of defense strategic needs as
sustaining of armed forces, military production etc.,
which are also logistical focuses.
Logistics play key role to ensure that combat forces
and combat support forces are supplied with what
they need to accomplish the mission on the real time,
place and with necessary quality, in the process of
achieving this.
Logistics and Supply Chain Management, together,
integrate all the activities involved in the
procurement, storage, movement of goods, and
payment from the initial suppler to the final customer.
Whole business cycle can be improved through
efficient SCM.
Any questions?