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Logistics consulting and operational audit
Operational audit and logistic consulting from KLS is an unbiased analysis of the current state of the company’s whole supply chain with the involvement of the best experts in their field!
The operational audit from KLS is:
Неупереджений аналіз поточного стану всього ланцюга постачань компанії, включаючи:
- Analysis of relationships with suppliers and customers, customer service management
- Demand and inventory management
- Management of warehousing and transport facilities
- Manufacturing planning and management
- Efficiency of enterprise infrastructure use, including information systems
- Audit of competencies and efficiency of operational staff
The audit answers the following questions:
- Current state of operational efficiency of the business
- To what extent do current costs correspond to the best indicators of the industry?
- How to optimize the level of customer service and the cost of the supply chain?
- Growth area of competencies of the staff
Effect of operational audit and consulting:
- Reduction of operating costs by 10-25%
- Reduction of costs for enterprise, while maintaining the level of customer service by 10-20%
- Increasing the productivity of the warehouse without increasing costs up to 50%
- Reducing the financial burden on the company by improving the turnover of goods and inventory management by 10-35%
- Implementation of the system of personnel motivation and process management by indicators (KPI & OKR)
- Implementation and launch of information systems (WMS, TMS, ERP, implementation of electronic document management)
- Reducing staff turnover
- Optimal solutions for outsourcing operational processes
- Mentoring and development of individual staff development plans
Implemented projects
Logistics audit. Distribution
Project Objective: The business process audit of the logistics supply chain of the FMCG distributor
Client: A company with 20 years of experience, representing global brands, cooperates with national and regional networks. Presented in more than forty cities of Ukraine
Result:
Demand forecasting:
- 30% reduction in demand forecasting costs
- Reduction of losses from lost sales not less than UAH 100,000 / month.
- Increase in sales by UAH 0.3-1.0 million by improving the accuracy of the forecast
- Reduction of the target level of inventories to 15 days
Storage:
- Savings of UAH 500,000 / year due to acceleration of unloading and acceptance processes.
- Savings of UAH 400,000 / year due to optimization of business processes
- Savings of UAH 1,200,000 / year due to increased warehouse productivity
Distribution logistics:
- Save 20% of route time, due to the formation of a routing system
- Increasing the profitability of routes by 200%
- Savings of UAH 200,000 / month due to the consolidation of routes
- 30% reduction in fuel costs
- Increase in the level of customer service from 96% to 98%
Operational consulting. Retail
Project goal: Reengineering of the distribution center. Increasing the capacity of the warehouse and its capacity
Client: Multi-channel retail store, one of the leaders in online commerce. Presented in 140 cities of Ukraine. About 8.5 million customers annually
Result:
Storage:
The analysis was performed:
- Topology of warehouse
- Movement of material flows
- Bandwidth of the warehouse
Effect of implementation of recommendations:
- Rational placement of functional areas. Uniform and uninterrupted flow of material flows
- Increase employee productivity by 30%
- Placement of goods according to ABC-XYZ analysis
- Increasing the capacity of the warehouse by 40%
The project was paid off in 36 months
Operational consulting. Production
Project goal: Improving the efficiency of inventory management system
Client: A group of manufacturing companies with 17 years of experience, a leader in the dairy industry of Ukraine
Result:
Inventory and procurement management:
- Increasing the level of customer service from 93% to 98%
- The ABC-XYZ analysis is carried out, the stock management strategy for each commodity group is formed
- The insurance level of stocks for all product nomenclature is calculated
- The calculation algorithm with the possibility of its integration into the ERP-system is developed, which allows:
- Minimize manual data entry
- Ensure the accuracy of data (minimize errors and inaccuracies in orders)
- Save all current and past data to ensure full transparency of the process
Logistics consulting. Distribution
Project goal: Development of a package of standard operating procedures, description of warehousing operations and calculation of warehousing needs and determination of additional equipment needs.
Client: National Distributor. Leader in the industry segment.
Result:
Storage:
- A package of standard operating procedures for warehouse operation is created
- The need for types and quantities of storage equipment and additional equipment is determined
- Performance standards for employees have been developed
- The optimization of the topology of storage space and the calculation of the structure of storage cells
Logistics consulting. Warehouse logistics
Project goal: Development of the concept of warehouse transition from outsourced management to self-management.
Client: Global provider of logistics services, represented in more than 150 countries, heading the TOP of the largest logistics operators in Europe and more than ten years is present on the Ukrainian market.
Result:
Storage:
- The analysis of the current warehouse infrastructure and of the volume of current and potential cargo flows is carried out
- The concept of a new warehouse (topology, zoning, types of storage) is developed
- The required area of the warehouse and its optimal location is calculated
- The need for racking equipment and the number of cargo storage equipment was calculated
- Investment calculation has been carried out
- Changing the concept of warehouse management is more than double revenue.
- The mode of operation of the warehouse 24/7
Operational audit. Freight forwarding
Project goal: Development of the concept of business process optimization of the commercial department of an international freight forwarding company for business scaling and opening a representative office in Europe
Client: International freight forwarding company. Specialization – multimodal, consolidated cargoes and transportation of oversized cargoes
Result:
Expedition:
- An analysis of the current business processes of the commercial department of the company in the areas of sales and operational support of customers
- A system of KPIs and motivations for employees of the commercial department has been developed
- Successful transformation of processes is carried out
Operational audit. Production
Project purpose: Audit of business processes of an international manufacturer of the woodworking industry in the areas of production, warehousing logistics and the activities of the commercial department
Client: International manufacturer of entrance and interior doors with more than 15 years of experience in the Ukrainian market
Result:
Production and warehousing logistics:
- The analysis of business processes of production, structure and activity of commercial department is carried out
- Recommendations for cost optimization and increase of warehouse productivity are developed
It is proposed to integrate CRM and WMS systems
Operational audit, logistics consulting. Distribution
Project goal: Audit of business processes of a national pharmaceutical distributor in the areas of warehousing and distribution logistics
Client: National farm distributor with more than 20 years of presence on the Ukrainian market. Actively cooperates with national and regional pharmacy networks
Result:
Storage:
- Business process analysis, budget structure formation and outsourcing strategy development
- Analysis of the structure and dynamics of operating costs
- Reengineering of warehouse complex topology, warehousing processes, implementation of reporting and system of efficiency and motivation indicators
Distribution logistics:
- Analysis of delivery routing system, profitability and optimality of routes
- Analysis of the organization of fuel purchases
- Analysis of the structure and dynamics of operating costs
- Analysis of the feasibility of maintaining its own fleet
- Analysis of business processes to control the passage of routes
- Analysis of the effectiveness of information systems, reporting and KPI systems
Operational audit, logistics consulting. Warehousing services
Project goal: Audit of warehousing business processes and operational efficiency in the warehouse of 3PL-operator
Client: Regional 3PL – an operator that provides services of responsible storage, assembly, pre-sale training and customs licensed warehouse services
Result:
Storage:
- Analysis of operational business processes, warehouse topology and existing constraints
- Calculation of the cost of the service of storage and processing of a commodity unit
- Revised and reformulated service catalog
- Priority customer profiles and the optimal portfolio structure of such customers are formulated
- The volume of sales of services has doubled, due to an increase in the number of processing operations
Operational audit, logistics consulting. Warehousing services
Project goal: Designing the composition of a leading distributor of building materials.
Client: One of the largest distributors of building materials.
Result:
Storage:
- The analysis of current business processes is carried out
- ABC-XYZ – assortment analysis
- Creation of functional zones, for the sake of the synchronized, uniform, and uninterrupted flow of material flows
- Improving employee productivity
- Increasing the capacity of the warehouse by 60%
- Developed a system of KPIs and motivations for employees
- Recommendations for optimal storage location are formulated
Operational audit, logistics consulting. Warehousing services
The purpose of the project: audit and optimization of the warehouse of the manufacturer of wall coverings.
Client: an international company specializing in the production of wall coverings.
Result:
Storage:
- A package of standard operating procedures for warehouse operation has been created
- The prime cost of processes in a warehouse is defined
- Identified factors that affect the cost of placing finished products in the warehouse
- Transformed inventory management strategy for each individual client
- A system of KPIs and motivations for employees is developed
- Performance standards for employees have been developed
- Recommendations for optimal placement of warehousing products are formulated.
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Eventually, any business has a crisis of ideas or a procrastination period. This is neither good nor bad, this period is typical for the company’s functioning
Sometimes companies deliberately choose to hold positions for various reasons. For example, low productive capacities or lack of staff strongly affects choosing this way.
But companies do not necessarily make this choice consciously, it commonly happens on its own due to various factors. Business processes are equally influential. Their well-functioning is the main indicator of the company’s willingness for expansion and further development.
The right decision in this period would be seeking professional consulting. Consulting by Kyiv Logistics School is an excellent solution for your company. Practitioners will help you with setting up any branch of the business process, tell you about its implementation specificities in a particular area, give advice on ways of implementing optimization and validate all changes.
Logistics School is an international expertise platform where each expert has a sufficient number of certificates confirming their deep knowledge of certain industries. Applying for consulting, you can be fully confident in the information quality which will be provided and the competence level of the specialists further working with you.
The results of each client and partner are important for Kyiv Logistics School. After consulting, companies return to “the Big Game” and become powerful rivals. They multiply traffic, the marginality of operations, reduce logistics costs, grow and place a large market share.
An experts’ team will not only help to improve existing functioning but will also provide you with detailed advice on other niches and give recommendations concerning new business areas. If it’s necessary, experts will draw up a business model including the risk probability and all development scenarios. This type of service gives a business and its owners the ability to save a large amount of their own time, money, resources choosing a direction that may turn out to be unprofitable or unwinnable.
Years of experience of the school’s experts have positively influenced the development of dozens of companies as well as helped to establish additional business units and lead companies on the innovative marketplace.
Audit by Kyiv Logistics School
All over the world, it is considered normal to use external expertise for assessing the operational efficiency of the company. It does not negate the presence of quality management departments and an operational performance management department.
Experts highlight issues that the company’s employees might not have noticed. Each company has growth zones. There isn’t a company with a perfectly functioning business.
It’s great when the company’s owners understand the importance of conducting regular audits to adhere to the path of sustainable development and continuous improvement. Experts notice the smallest details and elementary chronophages which unfortunately are not in plain view.
It’s great if the company knows how to maintain the achieved results and tries to do something for the development progress daily. At that point, it is important to manage all business processes for overall coherent functioning and being a single mechanism.
While holding positions it is necessary to conduct regular sets of performance indicators for each division, to analyze the gaps forming as a result of daily work, to work them out with the further elimination of the problem source.
The best method for conducting a set of indicators is comparing an existing company’s success with a benchmark – the world’s best practices. Benchmarking will be most effective in a way of comparing similar companies or enterprises of the same business area.
Besides, for conducting a high-quality set of indicators it is necessary to have a metrics catalog which will be useful for effective tracking of each division in all business processes. Using metrics an enterprise can control the customer service quality, the profitability level, the warehouse, the transport department functioning, manufacturing.
Metrics can be useful for business owners intending to monitor their team’s functioning. This relates to any department because each has its own KPIs set and performance indicators. Metrics is a highly adaptive means and may be established based on the specificities of a particular company.
What is the meaning of consulting and auditing for a company
An integrated strategy is a choice of two optimization issues at once by Kyiv Logistics School. Consulting and auditing are better functioning in the complex because an initial audit may help to identify needs, weaknesses, bottlenecks. Then, subsequent consulting gives an ability to reduce them and further eliminate the sources of the issue.
Is it possible to do without it and manage everything in-house? Maybe yes.
But absolutely any company eventually reaches a level when it seems everything is perfectly functioning but still somewhere there are flaws hidden deeply in the analytics depths. It is these shortcomings that form unnecessary costs, employee overtime, loss of margin as a result. All this can be avoided by regularly auditing the business processes of the enterprise and making a set of performance indicators for each department.
Each company varies in its frequency of the audit. For some of them it is important to get in touch with experts at least once every six months, for others – once a year. It all depends on the company’s size and goals. If the company is in the active restructuring phase, creating new business processes and optimization of its activities, it is better to conduct an audit every 3-6 months. Such frequency is due to the importance of controlling the restructuring effectiveness to better notice potholes, prevent possible mistakes, also save time and money.
Particularly stable companies that have been on the market for a long time and know their goals for the year may easily get in touch with experts only once a year for validating the quality of business functioning, taking into account all performance indicators and consulting on existing activities optimization.
Any optimization is an economy and economy is an additional profit for the entire company. For example, well-functioning logistics may help to save up to 10% of a company’s net profit. It is difficult to imagine a sufficient number of orders that need to be managed by a large company to earn an additional 10% of net profit. Therefore, insignificant spending on audit and consulting may cause much more benefits than it seems at first.
Advantages of ordering consulting and audit by Kyiv Logistics School
Kyiv Logistics School has merged the best experts in various fields of logistics, experts of great experience in their working field. And most importantly – people who are ready to share their knowledge and experience, help Ukrainian businesses in developing, reaching new results, expanding sizes, increasing income.
The school currently employs over 200 experts working around the world in various business areas. Dozens of experts gained education abroad as well as a set of international certificates.
The school is the only official representative of the Council of Supply Chain Management Professionals (CSCMP) in Ukraine. Cooperating with Logistics School companies gets highly qualified consulting and knowledge shared by coaches while joint projects.
Each consulting is some kind of training and experience exchange. It is necessary to regularly find out ways of achieving the targets and looking for means to achieve them daily.
Kyiv Logistics School is a reliable partner in the audit and consulting of companies because only its experts will not look down on you but will help to solve existing issues, train your staff and create a development map for the customer company.
Working phases
Each project starts with a short meeting for getting acquainted where experts ask important questions regarding the company’s activities, ask about their features of business processes and their existing goals to be achieved during the project implementation.
Beginning the cooperation experts of Kyiv Logistics School sign an NDA agreement to gain access to the company’s data for conducting an initial mini-audit.
A mini-audit consists of several phases: requesting company’s data, communicating with the company’s employees, visiting an object (for example, a warehouse or manufacturing house), primary data analysis, providing a small report of carried research.
Further, Kyiv Logistics School gives a commercial strategy based on the carried for the project research and signs an agreement with the customer company.
Having signed the contract a team of analysts analyzes all the data according to different assessment criteria, compiles a metrics catalog for your company individually and makes an operational analysis divided into levels of immersion and complexity.
According to such analytics, experts prepare an interim project report provided with an essential number of business optimization recommendations.
The next phase means the integration of optimization in the company. The company can conduct this phase on its own with the use of the current validation of the research results by the School’s experts. There is also intensive cooperation which means the School’s expert monitors an entire optimization period becoming an integral part of the team for improving the company’s operational effectiveness.
Having completed the project an experts’ team checks the results and makes a report on the carried research. As a result, the customer company can fix its current indicators and conduct optimization on its own.
Consulting and auditing price
The price of Kyiv Logistics School services is very transparent and simple. It is always based on following the required number of hours per project.
Experts assess the status of business processes and create an important tasks list for completing during the project. They calculate the number of hours required for the project implementation and formulate a commercial strategy on this basis.
It should be realized that the expert has to provide statistical data on various business processes of the company and the number of hours required for their standardization and processing will depend on the quality, accordance and accuracy of this data.
Kyiv Logistics School is one of the best logistic audits and consulting centers in Ukraine since it consolidated real experts but also remains within the marketplace concerning the price of provided services.
Reports on the conducted consulting and auditing
After finishing each project an experts’ team formulates a report and a presentation on the conducted research with plenty of additional recommendations for independent subsequent business optimization. Creating a list of recommendations experts must calculate the price of each optimization and how its integration will affect the company’s development.
After providing the customer company with a detailed report experts present the project results showing examples of operational indicators sets before and after having finished the project, changes of the business efficiency, which needs to be additionally implemented, the main issue – how.
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