Mechanical engineering

•  High level of competition between Russian and foreign producers.

• Significant number of spare parts suppliers for production of final products

• Broad network of dealers in all regions, including CIS countries, the near and remote abroad.

• Lack of turnover assets for dynamic and quality development of mechanical engineering in general.

• Until the recent, transport and warehouse logistics in mechanic engineering had insufficient attention devoted due to final production cost used to have logistics costs not more than from 5$ to 10% of the cost.

• Warehouse facilities are not always used efficiently.

• Complications related to attraction of highly qualified personnel.

• Permanently growing requirements to quality of final product from consumers.

As an outcome of project implementation in mechanical engineering complex, the costs for transport and warehouse logistics were significantly reduced. In conditions of rough competition on the market,

optimization and reforming of procurement and delivery system is one of the priority directions in mechanical engineering.

• Low coefficient of warehouse facilities use which leads to unreasonable high costs on utility services and payroll to personnel serving unoccupied areas.

• Warehouse personnel not using PCs, paper based book-keeping which significantly increases time for its processing.

• Rare exceptions on presence of data bases with volume and weight characteristics of cargo.

• Absence of regulations (methods and instructions) on optimal load of vehicles and due to it the transport is not loaded fully.

• Insufficient level of internal warehouse operations, duplication of functions by warehouse personnel.

• Absence of preliminary cargo consolidation in packing zone significantly increases loading time and processing accompanying documents

• Absence of proper acceptance planning and cargo sending leads to concentrated arrival of transport and idle time.

•  Insufficiently flexible stock system of purchased commodities, as a rule, volume of commodities purchased exceeds real need in them.

• Inefficient scheme of implementation of illiquid inventory. Long-term coordination between units participating in sale of illiquid assets, not clear borders of responsibility.

•  Absence of clearly described regulations for identifying illiquid assets.

• Absence of united center in charge of acceptance and processing of requests for transport from plant units.

• Inefficient use of vehicles: idle lifts, incomplete load, absence of supervision.

• Large number of transportation contractors, not transparent scheme of request submission for transportation services.

• Idle time in check points and warehouses during loading and off-loading time.

• Low level of personnel motivation for transportation cost reduction.

• Insufficient level of planning for need in transportation services, as a consequence, urgent request for transport appear, as well as failures in delivery of final products.

• Absence of low-tonnage transport for loading small amounts of cargo; use of vehicles designed for transportation of heavy and outsized cargo which leads to significant increase of transportation expenses.

• Not utilization of delivery schemes by less costly types of transport (water, rail way transport), significant share of shipping is implemented by automobile transport.

Upon elaboration and introduction of recommendations, the following indicators can be achieved: