Time – Information – Money
There are five ways to increase the effectiveness of internal agro-logistics within the enterprises.
In spite of the result showed by Ukraine on the outside market, the logistical achievements inside the country are far from expectations. According to the data given by the World Bank, in the grain chain “from field to port” the logistical costs exceed the costs of such services in the EU by 30% (!) To establish an effective and competitive logistics system, our country requires at least 1.6 billion US dollars annually. Is there any chance to succeed under the current economic conditions? An effective option is building of civilized and mutually beneficial relations with providers of services, as well as implementation of a systematic approach to organize logistics in each company.
Over the past two years, experts of Agricom Group implemented a number of innovations within a system of internal agro-logistics. It is very important that the most of these innovations did not involve significant financial investments and are available to the wide range of farmers.
Agricultural logistics, as any other business process, has clear limits and indexes of effectiveness. The chain “time – information – money” should be taken into account at the planning stage of cropping system and should be finished depending on the supply conditions at the stage of transition of a product to the end-buyer. An expert is able to plan an effective system and solve urgent issues evaluating the use of alternative possibilities if there is a timely and full information on the condition and location of products during a certain period of time. To do this on a regular basis, there should be a simple clear scheme “PLAN → MONITORING → FACT→ PLAN / FACT”. It should be used in the system of agro -logistics, as well as in the system of its directions.
Field logistics.
This direction combines the relevant activities of planning, organizing and work control directly in the field. Generally, it involves crop rotation, sowing, fertilizing and harvesting.
“The classic” approach to organization of field logistics is typical in Ukraine: Combine harvesters load crop into the vehicles (these are, usually, dump trucks “KAMAZ”) that deliver products directly to the elevator complexes or to the places for temporary storage and reweighting. The analysis of such approach shows: firstly, loading of grain directly into the vehicles increases idle time of vehicles and negatively affects the soil through compaction; secondly, it is a significant loss of grain during the transportation.
• Three-tier system of harvesting differs from the traditional scheme, because of the use of loading bunkers, whereas grain is loaded directly from combine harvesters to the bunkers and then to the vehicles. This system proves (on the agricultural lands of Chernihiv and Bilokurakyno clusters) that this innovation can reduce the costs by 20% at this stage of agro-logistics. Besides, this system minimizes the damage to the soil structure, as the trucks hardly drive on the field.
Elevator logistics
It includes a range of measures, such as transportation of crop to the elevator complex, internal logistics in the territory of elevator complex, grain receiving (laboratory analysis), processing (drying), storage of products and their shipment by rail, road or water transport.
We inherited an elevator complex in Chernihiv cluster. This complex required significant modernization. Having analyzed data from the information system we understood that the elevator complex in Bilokurakyno urban settlement also should be modernized.
• Increase of transport capability. To balance elevator logistics in the clusters it was decided to replace scales at the grain centers. Therefore, vehicle load and size limits changed up to 80 t and 20 m in the territory of Bilokurakyno cluster. Besides, the road carpet on the way to the elevator complex was also repaired. Having started serving vehicles with larger dimensions, transport costs reduced by 20 % in comparison with the same period last year. It is obvious that the use of five 20-t vehicles is much more expensive than the use of two 50-t vehicles, we saved time that was usually spent on paperwork, laboratory analysis, etc.
• Alternative Energy Sources. Grain drying is the most expensive component of all stages of agro-logistics due to its energy consumption. Gas is traditionally used for drying of agricultural products, but high gas prices motivate producers to choose the alternative technologies. Currently, the pyrolysis boilers are the most popular. Besides, they allow to introduce the non-waste production in one elevator complex. This technology allows to save about 160 US dollars per each railcar of corn (40 tons).
By the way, press of waste was implemented in Bilokurakyno cluster. Waste received during cleaning of grain is pressed. These bricks are used as energy for solid fuel boilers. They also heat the buildings of elevator complex in Agricom Group cluster.
Transport logistics
It is road, water or rail logistics: delivery of grain from the field to the storage places, ports or rail transshipment terminals.
• Tank trucks for delivery of bulk goods (or feed trailers) are an alternative of trucks. These vehicles reduce logistics costs because of their design (sometimes it is up to 3%); they also allow to reduce costs of grain delivery from the field to the elevator complex because of their capacity. The delivery of flax seeds shows the huge reduction of costs, as it allows to save up to 430 US dollars per each car.
• Installation of GPS on our own and hired transport. Like most agricultural companies, Agricom Group works with third-party carriers. However, each unit of hired transport is equipped with GPS tracker that, first of all, allows to control the work of service providers, and to receive detailed information for effective planning of products shipment to the elevator complex avoiding queues. Frankly speaking, we received many refusals to cooperate from logistics companies at the initial stage. However, at the conclusion of long-term contracts the condition of GPS installation is obligatory. Currently, we control the movement of goods: information from hired and our own transports is sent to the corresponding information system of GPS monitoring, systematized and analysed.
Alexander Smokotnin
Head of transport logistics department of Agricom Group
newspaper “AgroMarket“, February of 2016