A logistics system is a complex structured set of elements interconnected in a single process and having common goals for organizing a business. The micro-logistics system is the logistic management of the enterprise’s working capital (OS) at the micro level, i.e. at the enterprise level.
In its most general form, such control includes the following cycles:
- determination of the structure of fixed assets , their turnover and profitability, clarification of what constitutes a policy for managing current assets of the enterprise ;
- the next in logic is the financial cycle, on which its duration is determined and the calculation and analysis of the structure of the fixed assets for the financial cycle of this particular enterprise are performed;
- inventory management (US) and the cost of finished goods (CGP);
- receivables management - these are actions for its control and analysis, conclusion of contracts, balance sheet analysis, calculation of collection.
This article will consider the structure of the micro-logical management system, consisting of subsystems for managing material and monetary stocks of the enterprise. The planning mechanism on which the management of the enterprise’s working capital, material and cash reserves is built on the basis of logistics principles allows optimizing the use of stocks and the accompanying change in the stock of financial resources over time.
The main parameters of inventory management of such enterprise resources as finished products and work in progress when applying a strategy with a fixed production lot are the volume of the production order and the point of the production order. At the input of a controlled micro-logic subsystem, suppliers receive material resources that are stored in a warehouse. Then they go into production at the first production stage and are converted into work in progress with a certain intensity. Work in progress enters the second production stage and is converted to work in progress with a different, higher intensity, etc. After the end of the last production stage, the final product is obtained that arrives at the enterprise’s warehouse. From here it is shipped to the consumer.
In this model, the management of working capital of the enterprise and the regulation of the level of stock of products in the warehouse is as follows. The consumer receives demand for a batch of finished products. Stock at a warehouse is controlled only during the period of receipt of demand for it. Then, the current stock in the warehouse minus the demand for finished products is compared with the point of the production order. If the quantity of finished products that the consumer needs is available at the warehouse, then it is immediately shipped to the consumer in the required volume, while the lead time for the order by the manufacturer is minimal. If the required quantity of finished products is not available at the warehouse, then its immediate shipment does not occur, and consumer demand is delayed. At the same time, an order for the production of finished products in the required volume is submitted. From the moment demand arrives from the consumer until the moment of shipment, the current stock in the warehouse is checked daily.
After a certain time (the time of manufacture of the first unit of production) after the resumption of the production process, finished products with the indicated intensity arrive at the warehouse, and its supply begins to replenish. Over time, the stock is replenished to the required level and then the finished product is shipped after the optimal time.
In a similar way, the enterprise’s working capital is managed in the sphere of regulating the level of the stock of work in progress at the warehouse. The stock of work in progress is monitored here daily. Then, the current stock in the warehouse is compared with the point of the production order. If the first indicator is greater than the second, then no action is taken to regulate the level of stock of work in progress. If the order has not been submitted, an order is submitted for the production of a batch of work in progress in the required volume. Some time after the resumption of the production process, the work in progress begins to flow into the warehouse with a given intensity and the stock of work in progress begins to replenish.
Such working capital management methods can also be used to control the level of stock of material resources in the warehouse. Once again there is no need to describe such an algorithm; it is similar to those already described above.
It should be taken into account when implementing this management model that the external demand for the control object is the demand for a batch and the terms of order implementation.