Logistics Network in Balkans Concept and Realisation Neochimiki

Executive summery

The topic of the current assignment is realisation of logistic set-up of Neochimiki. Neochimiki is a manufacturing entity having manufacturing plants and logistics centres in Greece. The main target of the company is to create and implement very well structured and working supply chain between affiliated companies in the Balkans and the mother company.

As logistics is core activity for the company the define and transparent set-up of organisation is a key element of success.The ability to  keep balance between supply and distribution  critical imperative for many firms today. In order to keep this balances Neochimiki is trying to implement a system using different tools as KPYs for its suppliers, information systems  and different alternative ways of material/merchandisers replenishment for the affiliated companies.

The existence of a solid Replenishment Procedure is a key point for the development of additional business activities between the companies of the Group (stock transfer from subsisiares to Mother company or between subsidiaries).

This paper tries to provide an insight into supply chain flexibility by comparing upstream and downstream flexibility.

Upstream flexibility in the supply chain is defined as the capability of the supply chain to fill distribution centers from plants. Thus if all plants can supply all distribution centers all the items in the product portfolio, the supply chain has complete upstream flexibility. Similarly, downstream flexibility is defined as the capability of the supply chain to ship products from the distribution center to the market (regional warehouses or the retailer).

List of Contents

1. Executive summery..................................................................2
2. Introduction ..............................................................................4

      Thecompany.........................................................................4

          Infrastructure...................................................................6

1. Supply Chain.............................................................................7

                  Organisationsetup..............................................................9

                   Upstream supply chain/ KPYs..........................................10

                   Information systems..........................................................14

                   Downstream supply chain.................................................15

                   Replenishment management ............................................15

1. Conclusion................................................................................21
2. Reference list ...........................................................................22

INTRODUCTION

The company

Since its establishment in 1974, Neochimiki has steadily grown its activities to become the largest Greek company in chemicals distribution. Through its international expansion, Neochimiki today is among the fastest growing chemical firms in South-Eastern Europe. Core activities of Neochimiki are the production, blending and packaging of chemicals, as well as the distribution representing leading multinationals. Neochimiki’s success is based on continuously meeting or exceeding the needs of its customers.

More than 8.000 customers value flexibility, reliability and competence.

[pic 1]

The companies of the Group in Greece are presented in the following figure[pic 2]

Infrastructure

The logistic infrastructure of Group is presented in the following figure[pic 3]

The basic data of  Group Activities  are

• Three different Logistic centres in Greece
• Three different subsidiaries :Each working as a Logistic centre
• Chemicals for industrial use in more than 10 sectors: Food, Personal care, Textile, Metallurgy, Coating, Polymers ,Rubber, Base oil, Agricultural est.

            More than 500 active codes in Northern Greece Logistic centre (4 warehouses)

More than 200 active codes in any subsidiary

Local difference depending on the particular country in several areas:

• Clearance procedure
• Warehousing demand
• Documentation
• Products labelling

Plan for expansion of business and creation of logistic centres in other South East European Countries

Group logistic target :

• Establishment of common practices all activities and subsidiaries
• Control cost related with replenishment process
• Identification of weakness and actions for improvement

SUPPLY CHAIN

Most of the researches are focused on models for production distribution systems. Cohen and Lee (1988) evaluate strategies in multi-location supply chain systems and tradeoffs in flexibility with cost and service for stochastic demand. An analytical model issued to arrive at operating policies to minimize inventory and cost. However, they do not discuss the effect of service and flexibility at the different echelons of the supply chain. Multi-product scenarios are evaluated in Pyke and Cohen (1994) with an optimization algorithm. Under certain assumptions, they are able to predict a three-way tradeoff among replenishment size, finished goods inventory and retailer inventory with respect to cost and service. They come closest to our work since one interpretation of finished goods inventory may be upstream flexibility and retailer inventory may be viewed as downstream flexibility

 Organisation Set-up

The set-up of organisation in all affiliated companies in all countries is the same.

Logistics is considered to be separate Function and a complete department is delegated to the realisation of Activities as it is presented in the following figure

[pic 4]

For every company the supplying and distributing its goods is the critical point in order to achieve success and profitability. Neochimiki as a production unit makes products from materials purchased from suppliers, and then that  products are sold to customers and subsidiaries. It means that in order be able to operate normally the company needs to have a very well organized logistic department which of it side to manage the supply chain.  As Logistics is core activity for the company the definite and transparent set-up of organisation is key element for success.