Consultations about Logistics:
Questions and Answers

Logístics and Production

For a few years we maintained collaboration with The Business Gazette , in a central and extraordinary leaflet, where the readers of that newspaper could find the answers to their questions about Logistics. The consultations came either from big industries or from Pymes ,and even from professionals involved or interested in Logistics topics.

In this section we include some of the questions, with their corresponding answers, plus other general interest consultations carried out through other channels (Internet, telephone, mail, etc...)

This section is continually evolving. If you wish to ask us any question, which is considered to be of general interest, its answer will be seen in the next few days.

The most recent questions come first:

Page updated on: 03-ago-1999

What is your opinion, within the logistic aspect, about the creation of centers devoted to employees' training in a company?
At first sight it seems to be a little exaggerated. There is no doubt that "logistics" is very much in fashion presently, but this does not justify that a company creates its own training center.

It seems much more appropriate
for a company needing one, or some, of its components to receive this type of training, to go to centers which are specialized in such themes, where there is a wide range of courses to be taken.

, it may happen that the theoretical knowledge acquired is hardly applicable to reality in concrete cases. The combination of the company's "know-how" and of the adequate theoretical formation gives, in most cases, the optimal results expected. [...]
Do you think it is convenient to create a Logistics Department in a company with less than 30 employees and annual income of 1.200 million pesetas? What should that department be like?
A priori, it does not seem convenient to create the Logistics Department for the company you mention, with a rather reduced staff volume. We think it would me more appropriate to appoint a person in order to deal with the matters related to logistics, sharing his job activities with other different topics.

However, it is worthwhile to point out that your company's activity is essential when you have to decide whether it is necessary to create that Department. If your company sells 2 machines a year for 600 million pesetas each, and it has only one supplier, the answer is clear; do not create the Department.

On the contrary, if your company sells 1.200 million units with 1.200 different references
, at 1 peseta per unit, and it has 1.000 different raw material suppliers, the situation radically changes. Besides, innumerable aspects influence merchandise movements according to the handled items, such as term of delivery, owned or hired fleet, volume of the product, number of references, number of customers, etc.
Due to the growth in recent years of the sector our company is devoted to, the surface available at the present location has become too small, and the Managing Board has considered the construction of a new factory. Could you please indicate me the steps to follow in order to obtain an optimal design, at minimal costs, of our future factory?
Objectively, the problem can be approached from two valid points of view. First, the design of a new factory should be undertaken by their own staff, since they are the persons who best know the manufacture and storage processes, as well as the handling flows between the different sections of the plant. Therefore, a design of one's own usually gives results which agree with the objectives sought, and it can be an optimal work policy.

However, a company staff does not usually have the time needed to undertake a project of such scope, because of the indispensable day-to-day dedication. Besides, in general, companies do not usually have an Engineering Department which can be totally devoted to these projects.

That is why the second valid alternative is to resort to outside specialized personnel, with relevant experience in this type of projects, and with manifest independence from any construction engineering. My experience shows that it can be contradictory to work toward the optimization of the surface to be used and, afterwards, undertake the realization of the constructive project, because its remuneration depends on the investment to be made, and this, in turn, depends on the surface and volume to be built.
In my company we have been considering the possibility of proceeding to an upgrading of the machinery, either by purchasing new machines or by remodeling the existing ones. Which, in your opinion, is the most advisable choice?
There are several alternatives for this case even though, above all, the one which presupposes the greatest profitability for the company must prevail. In general, the Spanish - like the European- entrepreneur has traditionally based his factory profitability upon the acquisition of new production means. And although in many cases this has probably been a good choice, it is undoubtable that in other cases, some resources have been "squandered" which would have been better used in other areas.

The Japanese industry and, specially, its industrial network, sustained by the PYME (the ones called "shitauke"), base great part of their potential upon maximum exploitation of the existing resources. It is this philosophy that places them in the lead of world industry.

Anyway, provided that one part of the machinery will be completely substituted, do not forget that the Chamber of Commerce has a service that offers a machinery database, which is valid for both purchase and sale.

Copyright © 1997 Shitauke Corp. All rights reserved.
All other organizations or products mentioned here are name brands or trademarks property of their respective holders.
Send e-mail to with questions or comments about this Website.
Jose Carlos Ramírez Cauqui.