Logistics Network in Balkans Concept and Realisation Neochimiki

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Planning The combination and synchronization of the goods needed for the production and distribution of the ready products is the first element that the logistic department must coordinate with production and sales department.

Purchasing After planning logistic department receives a list of raw materials and services required by the production department for a certain period. The logistic department assessing and choosing the possible suppliers to deliver the necessary raw materials on the required dates.

Inventory Inventory management is also very important point for the operation of the company. It must be enough to supply the production but not to huge in order to keep the balance.

Production Based on the production plan the raw materials are moved from the inventory to the production plan and then the ready products are stored back to the whorehouse waiting to be delivered to the customers.

Transportation When the ready products arrived in the whorehouse the transportation department (part of the Logistic department)determines the most efficient way or what is agrees in to the commercial agreement to ship the products in order to be delivered on a specific date to the customer.

Upstream supply chain

Key Performance Indicators

Neochimiki is certificated according to ISO 9001 so the company has established a KPI matrix in order to assess its suppliers and to take a corrective actions if needed. The matrix is based on Key Performance Indicators or KPYs . “KPI's in logistics can help management identify and sort out problems during its normal operation. These measurements can be seen as factors for the improvement of the operation in the supply chain. Upon seeing unfavorable results in the metrics, logistics can find the aspects that need improvement and can identify the areas where the business is strong. Using the metrics, logistics management can draw up solutions or plan to enhance its performance and to make the management more effective in carrying out the objectives of the organization.

KPI logistics is a crucial tool in assessing the progress of logistics business. It can also be a means to indicate the efficiency and effectiveness of the different levels of management. Logistics management that provides effectiveness in the operation leads the organization to its success. Mismanagement at one point of the supply chain can lead to costly transactions that can eat up profits, thereby jeopardizing the position of the logistics business in the supply chain.” (http://EzineArticles.com/?expert=Sam_Miller)

“Supplier assessments provide an opportunity to view a Supplier's performance across many aspects. When applied to many Suppliers across several categories it will allow each rating to be compared to a best in Class Achievement. In this way you can actually create competition between Suppliers without having the Suppliers compete in the same industries or categories. Assessments or Evaluation Matrixes are used predominantly to establish a means to accurately assess Suppliers or Business partners and provide a framework for ongoing Supplier Development and effective Supplier Selection.”( Stubbings,1999)

There are four main key areas in the Matrix:

- Quality,

- Delivery,

- Price,

- Management

The scoring system of Neochimiki is graded from 1 to 5 like 5 being the highest. KPYs evaluation also must allow the ability to tailor scorecards to the good or service measured.

Weights can be assigned to each category so that the scoring system emphasizes those areas that are more important for the organizations.

Once the scorecard is defined, data must be obtained.

Having the data and documentation to support the scorecard is critical in order to establish the programs credibility with suppliers and provide the supplier with the necessary information in order to make improvements.

Data collection is the most difficult and time-consuming activity in the process. Teams must

evaluate the costs/benefits of each data collection method available.

KPIs

WEIGHTING

(1-5)

Suppliers Rating

Score

1.Quality

5

Quality System (Internal performance)

Quality Performance (Internal performance)

Rejects (External performance)

Severity (External performance)

Other

2.Delivery

4

Delivery Performance (External performance)

Lead time

Over supply

Payment period(Due period)

3.Price

4

Fixed price

Cost reduction

CPI performance

Other

4.Management

3

Management

Culture

Business Systems

TOTAL

QUALITY. A systematic approach for monitoring a Suppliers quality performance. Which creates a reliable database of information, which will assist in identifying trends and priority plans for quality improvement objectives.

DELIVERY. A systematic approach to monitoring a Suppliers Delivery performance. Which creates a reliable database for information, which will assist in identifying trends and priority plans for educational improvements.

COST. A system to objectively evaluate a Supplier's cost performance as it impacts on the business.