STORES LEAD TO LOSSES

There is an opinion that while manufacture earns money for the factory it all can be lost by logistics. Here is the reason why I offer to draw a special attention to this question and view all sides of it.

In Soviet times and its planned economic system it was profitable to have large stock reserves.   In fact the factory did not bear any expenses. Moreover, in case of deliver fails the factory always had enough reserves to continue the manufacturing process. Accordingly Ulyanovsky Avtomobilny Zavod as all built in that period factories had a large storage facility. It contained about 25 buildings and constructions including vegetable stores, huge fuels-lubes storages, and others. The all mentioned objects occupied more than 50 000 squared meters of the industrial area.

In the modern world with a smoothly running communicative system material deliveries are made without delay. So the factory is supplied for continuous production process. Considering this the factory has no necessity in such a large storage facility. Moreover supporting of this big territory leads to huge inappropriate expenses for its cervices, heating, water supply, tax payments and so on. The average sum comes to about 200 million rubles annually. It is without mentioning the building renovation costs.



Also with the storage facility disunity and its long distance from conveyors the factory has to bear expenses connected with items repacking. Repacking in its turn quite frequently leads to the items damage. It makes additional financial loses for the factory.

To avoid such loses and above-named inappropriate expenses in the framework of industrial area development strategy the leaders of Ulyanovsky Avtomobilny Zavod took decision and devised a project of creating the unified centralized storage facility for all goods and materials, metal storage, finished-products storage area.

According to preliminary calculations such decision will allow to cut the storage facility support expenses in half. Which means production costs reduction and competitive recovery in the world market. If evaluate the project from the point of recoupment the average profit from inefficient territories sale will amount to a half of a billion rubles. These financial recourses are to be spent for purchase of modern equipment to increase the production quality and quantity.