Necessity and Feasibility of Logistics Informatization in Ceramic Industry

During past decade, following the increase in the diversity of the patterns of client expectations and its consequent rise of industrial competition for better productions and services, organizations increasingly paved the ground for higher flexibility in production lines and product development to meet the costumers' needs. But managers of many industries learned that in order to survive in the market, improving internal procedures and company's flexibility is not solely enough but material and parts suppliers must also match the company's market development policies. Competitive environment faced companies with several challenges such as reduction of production cycles, decrease in distribution time, decrease in inventories and also waiting time, which are all of high importance to maintain profitability in the market. In order to solve these problems, the process which is now referred to as Supply Chain Management was introduced; meanwhile the notion was soon spread that the real competition was not between companies but was between supply chains indeed and logistic as a part of it was remarked. In the first step, through a critical review of the literature the constituent elements of logistics costs were integrally identified and content classified. The output of this stage developed a model that represents the main structural constituent of logistics costs with associated variables. By using a questionnaire and interviewing elites the general model was then turned into a native model in the ceramic and tile industry. Then based on conceptual cost model, consisting of structures and variables, a case study on Khayyam Ceramic and Tile Company was conducted and using financial statements and interviewing relevant units within the company, a cost framework was extracted and following results were obtained. According to the study, 11% of the total costs of the company accounted for logistics costs of which, 33% was transportation costs , 39% inventory costs, 16% storage and handling costs, and 12% costumer related services and order processing.