The material flow on its way from the primary source of raw materials to the final consumer passes through a number of production links. Material flow management at this stage has its own specifics and is called production logistics, which considers the processes occurring in the sphere of material production, i.e. in the sphere of production of material goods and material services.

Manufacturing process is a set of labor and natural processes aimed at producing goods of a given quality, range and on time.

All production processes are divided into main and auxiliary.

The tasks of production logistics relate to the management of material flows within enterprises that create material goods or provide material services such as storage, packaging, hanging, stacking, etc.

The main task of production logistics is to ensure the production of products of the required quality on time, the continuous movement of objects of labor and the continuous employment of jobs. Logistics objects - flow and material processes.

A characteristic feature of the objects of study in production logistics is their territorial compactness. In the literature, they are sometimes called island logistics facilities.

The logistics systems considered by production logistics are called intra-production logistics systems. These include industrial enterprises, wholesale enterprises with warehouse facilities, a hub freight station, a hub seaport, etc.

Intra-production logistics systems can be considered at the macro and micro levels.

At the macro level, intra-production logistics systems act as elements of macrological systems. They set the rhythm of operation of these systems and are the source of material flows. The ability to adapt macrological systems to environmental changes is largely determined by the ability of their intra-production logistics systems to quickly change the qualitative and quantitative composition of the output material flow, i.e., the range and quantity of products.

High-quality flexibility of intra-production logistics systems can be achieved through the availability of universal service personnel and flexible production.

On micro level Intra-production logistics systems are subsystems that are in relationships and connections with each other, forming a certain integrity, unity. These subsystems include purchasing, warehouses, inventories, service production, transport, information, sales and personnel (they ensure the entry of material flow into the system, passage within it and exit from the system). In accordance with the concept of logistics, the construction of intra-production logistics systems should ensure the possibility of constant coordination and mutual adjustment of plans and actions of supply, production and sales links within the enterprise.

Logistics concept for organizing production includes the following main provisions:

• eliminating excess inventory;
• refusal of excessive time for performing auxiliary and transport and warehouse operations;
• refusal to manufacture series of parts for which there are no customer orders;
• elimination of equipment downtime;
• mandatory elimination of defects;
• elimination of irrational intra-factory transportation;
• transforming suppliers from opposing parties into benevolent partners.

A logistics organization allows you to reduce costs in a competitive environment by focusing the enterprise on the buyer's market, i.e., maximum equipment load and production of large batches of products receive priority.

Exists two options for managing material flows.

1. Push system that is, objects of labor arriving at the production site that are not ordered from the technological unit (Fig. 6.1).

This option assumes that the manufacture of products begins at one end of the production line, passes through a sequential series of technological operations and ends with processing at the other end of the production chain. The material flow is issued to the recipient upon a command received by the transmitting link from the central production management system. In this case, upon completion of processing in one section, the product is transferred to the next, regardless of whether this section is ready to accept the product for processing or not. Each site has a production plan. However, it is impossible to create a rigid technological process, all parameters of which would be accurately calculated in advance, therefore enterprises must always have a certain production reserve, which plays the role of a buffer and increases the flexibility of the system. Push systems are known as MRP". The above systems are largely characteristic of traditional methods of organizing production. The possibility of their use for the logistics organization of production appeared in connection with the widespread use of computers, which made it possible to increase the flexibility of this system.

Rice. 6.1. System with ejection of a product launched into production

2. Pull system in which objects of labor are supplied to the technological site as needed. It helps reduce inventory while increasing production flexibility (Figure 6.2).

Rice. 6.2. System with pulling of a product launched into production

This system involves receiving products from the previous site as needed. The central control system does not interfere with the exchange of material flows between different sections of the enterprise and does not set current production targets for them. In industrial enterprises, only the final assembly line has a plan, and from here information about the need to produce the necessary parts is sent to previous sections through special cards. The site plan is formed every day, which ensures the flexibility of the system.

Pull logistics systems include the Kanban system. There are two types of cards in this system:

1. selection cards;
2. production order cards.

The selection card indicates the number of parts that should be taken at the previous processing site.

The production order card indicates the number of parts that must be manufactured at the previous site.

At the storage location, parts are loaded into a forklift in the quantities indicated on the selection cards. At the same time, the order cards attached to them are removed from the boxes, which inform about the order for the production of new parts in a strictly defined quantity. The site plan is formed every day. This provides system flexibility. Any movement of products without cards is unacceptable. Typically, a Kanban system is combined with a quality control system. This system does not require total computerization of production, but it requires high supply discipline and high personnel responsibility, which limits its implementation in various countries.

Particular attention is paid to production logistics principles of rational organization of the production process, namely:

1. ensuring rhythmic coordinated work of all production units according to a single schedule and uniform production. Rhythmic work involves the organization in time and space of individual, partial and private processes into a single continuous production process, ensuring the timely release of each specific product in established volumes with minimal expenditure of production resources;
2. ensuring maximum continuity of production processes. Continuity lies in the movement of objects of labor and the loading of jobs. The general optimization criterion is that the minimum cost of production resources in non-line production conditions can be ensured by organizing continuous loading of workplaces, while in line production - choosing an option with minimal time for inter-operational tracking of parts;
3. ensuring maximum reliability of planned calculations and minimal labor intensity of planned work.

The following problems need to be resolved:

• shortage of production capacity;
• suboptimal production schedules;
• long production cycle times;
• ineffective inventory management;
• low equipment efficiency;
• deviations from production technology;
• sufficient flexibility and maneuverability in achieving the goal in the event of various deviations from the plan;
• continuity of planned management;
• compliance of the operational production management system with the type and nature of a specific production;
• straightness;
• proportionality, i.e. ensuring equal throughput of different workplaces of the same process, as well as proportional provision of workplaces with information, material resources, etc.;
• parallelism;
• concentration of homogeneous objects of labor in one place.

The main laws that ensure the optimization of production processes are: the law of orderly movement of material flows, the law of calendar synchronization of technological operations, the law of resource reservation of the production process, the law of emergence of main and auxiliary processes and the law of the rhythm of the production process.

In the implementation of logistics goals, a significant place is occupied by new methods of organizing production, which are called slender production. It views the emergence of bottlenecks as a chance to eliminate them completely.

An important role in ensuring rational distribution of goods is played by trade and intermediary organizations, which provide production with the necessary raw materials and materials. Logistics here consists of choosing a strategy for managing the acquisition, movement and storage of materials, products and inventories, as well as managing information flows that accompany the process of product distribution. Logistics intermediaries are becoming an effective tool for saving financial and material resources in the process of goods distribution.

3. The main task of production logistics is to ensure the production of products of the required quality in a timely manner, continuous movement of objects of labor and continuous employment of jobs.

4. There are two concepts of organizing production: logistics and traditional.

The logistics concept includes the following main provisions: rejection of excess inventory; refusal of inflated time for performing basic and transport and warehouse operations; refusal to manufacture series of parts for which there is no customer order; elimination of equipment downtime; mandatory elimination of defects; elimination of irrational intra-factory transportation; transforming suppliers from opposing parties into benevolent partners.

The traditional concept of production organization involves never stopping the main equipment and maintaining a high utilization rate at all costs; produce products in as large batches as possible; have the largest possible supply of material resources “just in case.”

5. Distribution logistics is a set of interrelated functions implemented in the process of distributing material flow between various wholesale buyers, i.e. in the process of wholesale sales of goods.

For a long time, traditional production and marketing activities were based on the fact that fluctuations in demand for the products of a particular production were regulated by the stocks of these products. Production worked at its own rhythm, and stocks of finished products were created, essentially, “just in case.” The disadvantages of such an organization of production were obvious. In addition to the waste of significant funds in the form of the creation of stocks that are not yet in demand, costs arise for their storage and, consequently, the cost of production increases. In addition, such inventories limit the company's ability to satisfy requests regarding a new range or expressed in changing requirements for the quality of goods. The company becomes conservative, its opportunities to expand its clientele and conquer new markets are limited. Ultimately, this makes it difficult (if not completely impossible) to implement effective and profitable pricing and technical policies.

Organizing and managing production according to the traditional concept strives to maintain high equipment utilization and reduce production costs. The relevant indicators are monitored throughout the entire production cycle. Based on the results of monitoring these indicators, certain management activities are carried out.

The traditional concept of production management is based on the fact that the product being manufactured is based on an analysis of market conditions already carried out by the top management of the company. Therefore, it is assumed that products of this range and in this volume will be sold sooner or later. With this approach, the goals of production management are local and specific: maximum equipment utilization and avoidance of downtime, the desire to produce the smallest number of batches of the largest volume of products, to constantly increase productivity, including by allowing a certain percentage of defects and narrow specialization of production personnel .

The implementation of such properties of flexibility, which modern production should have, is achieved through logistics management.

Logistics principles of production management require that indicators be correlated with the efficiency obtained from product sales. In other words, the assortment, volumes and timing of sales and achievable prices are taken into account.

The possibility of adequately increasing production volumes, i.e. quantitative flexibility, is ensured by creating internal reserves of labor and production capacity, including equipment reserves.

In conditions of satisfying and creating market needs in the presence of competition, the receipt of orders from consumers is unpredictable and can change, that is, increase or decrease and acquire new qualities. The top management of the company will not be able to satisfy such fluctuations in consumer demand only through the availability of inventory. Moreover, these reserves deprive him of initiative and make him conservative.

Logistics concept organization of production includes the following basic provisions:

• eliminating excess inventory;
• refusal of inflated time for performing basic transport and warehouse operations;
• refusal to manufacture products for which there is no customer order;
• elimination of downtime of main equipment;
• mandatory elimination of defects;
• elimination of irrational intra-factory transportation;
• transforming suppliers from opposing parties into benevolent partners.

A comparison of traditional and logistics principles of production management is given in Table. 9.1.

Table 9.1. Traditional and logistic principles of production management

End of table. 9.1

Index	Traditional production management	Logistics production management
	The maximum possible volume of material resources and finished products	Refusal of excess material and commodity stocks, stock in the form of a reserve of production capacity
Equipment	Specialized. Equipment downtime is minimal	Universal. Downtime in accordance with capacity reserves
Capacity utilization	High capacity utilization rate	Increasing the throughput of production facilities
Defect rate	Technologically sound	Marriage is unacceptable
In-plant transportation	Corresponds to the current organization of the production process	Optimal due to reorganization of the production process
Consistency of production and infrastructure operations	Achieved by overestimating the time required to complete individual operations	Due to the rhythm
Relations with suppliers	Own goals	Common interests
Qualification of production personnel	Promotes within specialization	Expands, with universalization at its limit

Timely production - This is a philosophical concept that redefines the goals of production activities and believes that its result is a significant reduction in non-production costs for maintaining inventories of material resources.

In the United States, on-time production is interpreted in relation to four elements:

• 1. Manufacturing of finished products.
• 2. Shipment and sale.
• 3. Purchase of material resources.
• 4. Use of purchased material resources in production.

Production logistics– the area of ​​logistics, covering the processes of movement of material flows within an organization. A characteristic feature of facilities in production logistics is their territorial compactness.

A distinction is made between the production of material and intangible goods. The goal of production logistics is to optimize material flows within an enterprise that create material goods or provide material services, such as packaging and storage. A characteristic feature of the objects of study in the submarine is their territorial compactness, they are sometimes called island logistics objects. The systems considered by production logistics are called intra-production. In accordance with the concept of logistics, the construction of intra-production logistics systems should ensure the possibility of constant coordination and adjustment of plans and actions of production, supply and household departments.

Logistics systems considered by production logistics are called intra-production logistics systems. Intra-production logistics systems can be considered at the macro and micro levels.

At the macro level Intra-production logistics systems act as elements of macro-logistics systems. They set the rhythm of operation of these systems and are sources of material flows. The ability to adapt macrologistics systems to environmental changes is largely determined by the ability of their internal production logistics systems to quickly change the qualitative and quantitative composition of the output material flow, i.e., the range and quantity of products.

At the micro level Intra-production logistics systems are a number of subsystems that are in relationships and connections with each other, forming a certain integrity and unity. These subsystems: purchasing, warehouses, inventories, production services, transport, information, sales and personnel ensure the entry of material flow into the system, passage within it and exit from the system. In accordance with the concept of logistics, the construction of intra-production logistics systems should ensure the possibility of constant coordination and mutual adjustment of plans and actions of supply, production and sales links within the enterprise.

17. Traditional and logistics concept of production organization.

The logistics concept involves the following main stages: 1- rejection of excess stocks; 2- refusal of excess time for performing main and auxiliary operations; 3- refusal to manufacture batches of products whose volume is not confirmed by demand; 4- equipment downtime update; 5- suppliers as partners.

The traditional concept of production management is characterized by: 1- production of products in as large batches as possible; 2- equipment factor support; 3- availability of material reserves in the largest possible volume.

The traditional concept was applied in situations where most markets were seller's markets. Most materials did not pay back their cost. Logistics offers to adapt to changes in demand due to the reserve of production capacity, which arises in the presence of qualitative and quantitative flexibility of production systems. Quality flexibility is achieved through the versatility of production personnel and flexibility of production. Quantitative flexibility is achieved in a number of ways, including through the availability of spare labor and equipment.

8.2. TRADITIONAL AND LOGISTIC CONCEPTS OF PRODUCTION ORGANIZATION

The logistics concept of organizing production includes the following basic provisions:

Refusal of excess stocks;

Refusal of excessive time for performing basic and transport and warehouse operations;

Refusal to manufacture series of parts for which there is no customer order;

Elimination of equipment downtime;

Mandatory elimination of defects;

Elimination of irrational intra-factory transportation;

Transforming suppliers from adversarial parties into benevolent partners.

In contrast to the logistics, the traditional concept of organizing production involves:

Never stop the main equipment and maintain a high utilization rate at all costs;

Manufacture products in as large batches as possible;

Have the largest possible supply of material resources “just in case.”

When demand exceeds supply, we can assume with reasonable confidence that a batch of products manufactured taking into account market conditions will be sold. Therefore, the goal of maximum equipment utilization takes priority. Moreover, the larger the batch produced, the lower the cost per unit of the product will be. The task of implementation is not in the foreground.

The situation changes with the arrival of buyer “dictation” on the market. The task of selling the manufactured product in a competitive environment comes first. The volatility and unpredictability of market demand makes it impractical to create and maintain large inventories. At the same time, the manufacturer no longer has the right to miss a single order. Hence the need for flexible production facilities that can quickly respond with production to emerging demand.

See also:

6.2. Traditional and logistics concepts of production organization

The organization of material flows within an enterprise depends on the characteristics of the sale of finished products. In conditions of shortage in the market, when there is complete confidence that the products will be sold, attention should be paid to high equipment utilization. This leads to an increase in equipment utilization rates in terms of time, power and volume of work and a reduction in the range of products. At the same time, products are released to the sales warehouse in accordance with the production plan and stocks of finished products are accumulated. This traditional approach to production and trade.

In the face of problems with sales and unpredictability of demand, production at the warehouse is replaced by production to order. It becomes unprofitable to maintain large inventories and at the same time new orders cannot be missed. Therefore, the rapid adaptation of an enterprise to environmental changes becomes important, which is ensured by the ability of its subsystems (supply, production, sales) to quickly change the size and composition of incoming and outgoing material flows. All this is possible by using logistics concepts.

The logistics concept of organizing production includes the following basic provisions:

– refusal of excess stocks;

– saving time on performing basic and transport and warehouse operations;

– refusal to manufacture products for which there is no customer order;

– elimination of irrational equipment downtime;

– mandatory elimination of defects;

– elimination of irrational intra-factory transportation.

The traditional concept is most suitable for conditions of a “seller’s market”, and the logistics concept is most suitable for conditions of a “buyer’s market”.

When demand exceeds supply, you can be sure that the manufactured batch of products will be sold, so the equipment is loaded to the maximum. Moreover, the larger the batch produced, the lower the cost per unit of the product will be. The task of implementation does not come first.

The situation changes with the arrival of buyer “dictation” on the market. The task of selling the manufactured product in a competitive environment comes to the fore. The volatility and unpredictability of market demand makes it impractical to create and maintain large inventories.

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