Professional Documents
Culture Documents
Erhvervsakademiet Lilleblt
Nikas Sinevicius
LOG1308i (2013-2015)
14,559 Words
Table of Contents
Opening.......................................................................................................................... 2
Introduction.................................................................................................................... 3
SWOT.............................................................................................................................. 7
Strengths..................................................................................................................... 8
Weaknesses............................................................................................................... 11
Opportunities............................................................................................................ 13
Threats...................................................................................................................... 14
Michael Porters 5 forces.............................................................................................. 16
PESTLE analysis............................................................................................................ 17
Political...................................................................................................................... 17
Economical................................................................................................................ 17
Social......................................................................................................................... 18
Technological............................................................................................................. 18
Legal......................................................................................................................... 19
Environmental........................................................................................................... 19
The Value Chain............................................................................................................ 20
Primary Activities...................................................................................................... 20
Inbound Logistics................................................................................................... 20
Operations............................................................................................................. 20
Outbound Logistics................................................................................................. 21
Sales and Marketing............................................................................................... 21
Service................................................................................................................... 26
Support activities...................................................................................................... 26
Firm Infrastructure.................................................................................................. 26
Human Resource Management.............................................................................. 34
Technology Development....................................................................................... 36
Procurement........................................................................................................... 37
Mitransa Logistics transportation service.....................................................................38
Competitor and Customer analysis.............................................................................. 42
Vehicle Tracking system implementation.....................................................................45
Mitransa Logistics economical evaluation....................................................................46
Recommendations........................................................................................................ 47
Conclusion.................................................................................................................... 50
Opening
The title of my assignment is: Analyse and evaluate company by implementing value
chain and relevant analysis in order to make usefull suggestions to change and improve
the company
First of all I will introduce the company by providing information about the companys past
and todays activities, where is the company currently takes place in the market, what is
the mission and goal of the company, also I will express my opinion on generic strategy
company is using and will comment on growth strategy.
Main tasks are:
To analyse Mitransa Logistics business environment factors
To make an analysis of distribution services provided by Mitransa Logistics
To analyze the companys current situation on market I will be using PESTLE analysis and
Michael Porters five forces, also I will use SWOT analysis to get a better view of what are
the company strong at, where are its weaknesses, what are the opportunities and what
can be threat for the company.
Introduction
Introduction of the company
The company called Mitransa Logistics is a young and growing transportation company
based in the capital of Lithuania, Vilnius. In the past company were transporting small
carriages, nowadays it delivers transportation as well as warehouse services for its
customers. The services company is mainly providing transportation of cargo to and from
Lithuania, Latvia, Estonia, Russia and CIS countries(Azerbaijan, Armenia, Kyrgyzstan,
Belarus, Kazakhstan, Tajikistan, Uzbekistan, Moldova), as well company is transporting
goods to and from European countries to Eastern and Central Asian countries. Company
does transportation of small, partial and full cargo. There are different means of transport
company is offering:
Transportation by road company transports partial cargoes, full trailers, also dangerous
ADR cargo and has semitrailer freezer to carry food and beverages that is capable to
handle temperature ranged from -25C to 25C. Transportation by road trains and tilt trailer
is offered as well.
Transportation by railway organizing a transportation of cargo from/to EU, Eastern and
Central Asian countries, also tracking the movement of a cargo.
Transportation by sea organizing deliveries of containers to and from Klaipedas port
based in Lithuania
Storing good in a warehouse company is offering a short-term and long-term storage of
cargo and also offers services of cargo loading and re-loading, sorting goods, packing and
labeling goods, preparing needed documents for transportation. Also company owns a
large secured outdoor area where it is possible to store bulky goods that are not affected
by temperature.
The company has highly skilled employees who have a large number of years behind their
back working in logistics area. Employees of the Mitransa Logistics have knowledge
about cargo transporting by different means of transport and know the best routes to do
the transportation. That helps to ensure the best quality of cargo carriage, making the
company flexible and strong in completing orders on time. Employees take a reasonable
part of running companies business in very efficient way. Mitransa Logistics in the present
time has 22 employees. 12 people in the office, 9 drivers and 1 mechanic.
Generic strategy
Michael Porter has created a generic strategy model in 1980, so that business companies
could use one to get advantage amongst their competitors. There are three generic
strategies:
1) Cost leadership, meaning that the company wants to have the lowest cost for product or
service compared to its competitors.
2) Differentiation, meaning that the company wants to have a product or service that is
different then other competitors are offering, it could be a product or service offered with
higher and better quality.
3) Focus, meaning that company concentrates on a focused groups, and offering specific
products or service.
Company should choose strategy depending on their mission and goal, as mentioned
before, Mitransa Logistics has a goal of being best quality providers for their customers
and that means they chose Differentiation strategy. Their difference is that workers are
highly skilled and experienced, what means they are able to provide better transportation
service then competitors. Because it is often case when customer picks a transportation
company where workers are not experienced and do not know the fastest, cheapest and
safest routes, what makes customers unsatisfied, because they want a transportation
company that can be highly efficient as possible, that has a lot of experience and knows
how to run everything smoothly.
Market Position
Today European market is filled with transportation companies, there are many both large
and small companies who provide transportation inside Europe so it is highly competitive
market, that is why Mitransa Logistics choose to concentrate on international
transportation service between European countries, Russia and other CIS countries, as
well as Central Asian countries. Also as an advantage for the company that all employees
know Russian language fluently so it is easier to operate with customers in Russia and
former CIS countries.
It is also became challenging doing business lately, because of the political situation, there
are less transportation orders that are made from European market to Russian market,
what negatively affects our company.
Growth Strategy
Company is trying to stay competitive amongst their competitors in Lithuania, remain in
good relationships with their existing customers and attract new customers. Mitransa
Logistics is still a young company and they are very careful with their investments, so they
are trying to make investments into what is considered to be most important for the
company, latest bigger investment was to buy a truck. This helps company to gain more
profit, and have less expenses on renting truck from other companies. Even though
company has a warehouse and could make more investments there, they choose to invest
in distribution business, because it is their main activity.
To find out what strategy company uses I implemented Ansoffs Matrix, which has four
different growth strategies for business companies to choose:
1) Market Penetration, which means staying in the current market and offering current
service.
2) Market Development, that means offering our current services, but offering it to a new
markets.
3) Product(Service) Development, means offering new service in the current market we
are working.
4) Diversification, means a complete change by moving into new market and offering new
services.
In the Ansoffs matrix Mitransa Logistics is choosing Market Penetration, because it is the
safest way for our company to grow, especially when it is young, if company would try
moving into the new market it would be risky, because we would have to make a good
analysis, put a lot of effort, a mistake could end up critically for our company.
Also company is choosing safest strategy, because they want to remain doing business
with their customers, who are in close relationship, meaning company is using voice
strategy, that helps them grow slowly, but with more confidence.
Summing Up
Mitransa Logistics is a young and developing company, the main strength of the company
is highly experienced workers, that have been working in distribution companies for many
years. Company has a vision of being leaders amongst their competitors and to
accomplish the vision their goal is to provide the best service for the customers. To provide
the best quality services, company is choosing Differentiation strategy from Porters
Generic Strategy model. Company main business is transportation between European,
Russian, east and central Asian markets. To grow Mitransa Logistics is using Market
Penetration strategy in Ansoffs growth matrix, because company wants to grow safely,
confidently, even though there are many competitors in transportation market, they use
many years of experience in transportation area and close relationships with customers as
their strength.
SWOT
The SWOT analysis is used for companies to evaluate their Strengths, Weaknesses,
Opportunities and Threats. Basically it helps to see advantages and disadvantages that
company has against their competitors.
Strengths:
Weaknesses:
Multimodal transportation.
Owns a warehouse.
Opportunities:
Threats:
Weak technologies
Improvement of advertising
Strengths
Mitransa Logistics are offering a wide choice of transportation, what is a huge advantage
for our customers who need transportation by different means of transport, not only by
road, but also by sea and rail. Wider choice of services lets our company be more
advantageous then our competitors. Because sometimes customers want to transport
heavy, big and bulky cargos, or transport cargo in large quantities, offering wider choice of
services lets our company to work with larger customer group.
Transporting goods by road is the most flexible way of transportation, because you can
transport goods into rural areas, which cannot be reached by rail, sea or air. It is cheap if it
is used for a small distanced transportation. But it is more expensive method then railway
if it has to be long distance transportation of goods in big quantity.
Railway transportation has many advantages, because it is not affected by weather
conditions like rain, snow or fog, so for example if we want to transport big amount of
petrol from Russia, we will use railway, because during winter time road conditions in
Russia are extremely dangerous, what can cause a critical accident, that is why it is better
to transport by rail and also because it would be cheaper to transport big amount of petrol
by rail then by road. In long distance transportation railway is also better then sea or road,
because it is faster.
Sea transportation is the best choice for customers who want to transport heavy and bulky
goods or goods in large quantity it is leader amongst all transportation means if we are
speaking about capacity. For example if we would want a large quantity of bananas
transported from Brazil to Europe, the cheapest way would be to transport goods by sea.
Being able to transport cargo by different means of transport makes our company better in
the eyes of our customers, because we can offer more services then our competitors who
are only making carriages by road. If our close customer would want to use transportation
services by rail, he would not have to seek for another company, he could stay with us,
trust us more, because we have history of working together.
Our company has an ability to transport goods using multimodal transportation, what
means we can perform a transportation by at least two means of transport under a single
contract signed. And we as carriers take the responsibility for the transportation. The
advantage of this transportation is that our customers can transport their goods even to the
most remote parts of the world. For example if our customer would want to transport wine
from France to Eastern part of Russia, our company could offer a multimodal
transportation, firstly transporting wine to Lithuania by truck and further using railway. Also
choosing our company to use multimodal transportation cost less for our customer, they do
not have to waste time on searching different transportation companies, our company
does the work for our customers and it is easier to make transportation using one
company then two or more.
Mitransa Logistics has a good leader that push the company to develop faster. He has
needed skills to manage his subordinates, who are working hard and are devoted for the
company. CEO is strict and is using centralized decision making system, that helps
company to achieve better results. Often company has to make important decisions and
decisions should be made fast, to do so it is better to have centralized system in the
company, because there are less opinions and less disagreements on decision choice. He
is spending a lot of time on work, and works hard along with the whole team.
This is a good type of leader that should run a business company, because hard work will
always result in huge success for any company.
The number of employees in the company is small, but all employees are experienced,
well trained and devoted. All employees have been working in large transportation
companies before and therefore have good communication skills, what is important not
only in working with customers, but also working together as a team, reaching same goal.
It is important to create a team that will be in close relationships with each other, not only
during work time, but also after work. Team that will become good friends, it is a very big
advantage for the company, because strong team is a perfect key for the company to
achieve its goals.
First of all experienced worker helps company to attract more customers and remain in
good relationships with current customers, good performance of workers helps to gain a
good reputation. Most of the workers are speaking more then 2 languages, what helps
doing business with countries that have big population, big population means there is a
bigger need for transportation service. Being experienced workers they also help company
to make less mistakes, meaning that they help company to save on cost, having
unexperienced workers would be hard to develop for a young company, because they tend
to make more mistakes and we cannot allow that on a highly competitive transportation
business.
Mitransa logistics has a team of workers that are punctual and responsible, everyone
comes to work on time, because they understand, that being late would create extra job for
their team-mates, sometimes workers are going to work even if they are little sick, what is
not good, but it shows how devoted for the company they are. Also workers are not only
going to work 8 hours a day and go home, just to get paid, they are coming to work,
because they have interest in it and they understand that they will leave only when their
daily job is done. Being experienced they also feel free to share ideas amongst workers,
what is helpful for the company, an employee who just started his career may be shy and
will hesitate to express his ideas, because he will be only listening and learning from
experienced workers. The employees are aged in between 26-39 years old, that means
they have developed good communication skills, what is important in daily work, because
bad communication can result in unneeded stress, what will result in less efficient work.
Also communication with our customers makes an impression about our company, good
communication helps to get a positive reputation on the market.
Owning a warehouse is another strength, because our company in the delivery process
often gets orders, with Less then container load, so to save on costs we can use
warehouse to bring different products and then create a mixture of goods and make single
shipment to our customer. By having ability to mix goods, instead of sending two not full
trucks, we can use one, what is an advantage. Another advantage of having warehouse is
that we can keep goods that customer is buying steadily, so if we will receive an urgent
order from our customer, we can send out product straight away. We have a lot of
customers that use our service to transport wine from Western Europe to Eastern and
Central Asia, so wine is not a product that expires soon, that is why we can keep it in our
warehouse without risk to spoil the wine. The ability of fast delivery will help our company
to gain respect from customers, that will increase value of our brand name.
Our warehouse also is used to store products for other companies, what is positively
increasing our profit. Our warehouse contains inside part where temperature can be
regulated and outside part, where customers can place big, bulky and heavy products that
are not affected by weather conditions.
Weaknesses
Having not many trucks in fleet is a weakness of our company, because we have big
transport companies in Lithuania, who has a lot of trucks and currently not all of them can
be used because of lack of orders, what is good for our company, political conditions helps
to weaken our competitors, but we still need more trucks, because we can have more
orders and renting is expensive in a long run. Having more trucks will help our company to
earn more profit. Best solution would be to buy used trucks, because we are young and do
not have budget to buy brand new trucks. Expanding transport fleet will help to become
our company more independent and expansion will be faster, because with each additional
truck added we will gain more profit.
Being young company is hard, because the competition is very high and brand is not yet
well known, because of that many customers will choose bigger companies, that have
longer history and is well known in European or Asian markets. Main reason for choosing
bigger companies is reliability, many customers do not want to risk even though delivery
prices of small companies are cheaper then big companies. Young companies are often
seen as unexperienced companies, and it is often case when company do not know most
efficient roads to transport goods. That is why our company has to prove that we are
experienced by making less mistakes, even if we are young, that will attract more
customers, it is important for us to become trustworthy.
Many employees in our company knows mainly Lithuanian, Russian fluently and English
moderate. This is very good to work with Eastern Asia, but as it becomes harder to do
business with these countries because of political reasons company should be thinking to
hire employees knowing German language for instance. Because German market is a big
market and it means there is a big demand for transportation. Having an employee who
knows German language fluently could create more orders for our company, we could
attract more customers. Or hire employee who knows any other language, but this is a
look into the companies future, so that by doing that company could feel safer about
having customers and will not be so affected by political situation.
Another weakness of the company is drivers, it is relatively find good, responsible and
honest drivers, mainly because our company is young and cannot offer very high salary or
good work conditions. There are drivers, who make accidents and it can cost our company
a good reputation. Mostly accidents happen because there is lack of subordinance, driver
should always listen for the instructions of his manager. Our company makes
transportation to Kazakhstan, Russia where driving can be dangerous, not only because of
poor road conditions, but also because of hijack attempts. It is important to dedicate some
time to instruct drivers how to be safe on the road, how to avoid these situations. It is very
important to hire honest driver, probably a person that company knows for long time,
because often case when drivers do cheat, for example drivers are saving petrol and then
they are selling it to people for a lower price. That kind of behavior is not appropriate for
our company especially because we are young and small company, we have to save
costs. Also drivers should be taught how to be gentle on the road especially driving
through the long roads where are only two lanes, drivers often get close to each other and
do not let cars to overtake them, and not keeping safe distance results in accidents. Hiring
good drivers, who are educated, well experienced will help our company to become more
efficient, meaning there will be less accidents, better service for our customers, resulting in
reputation growth.
Opportunities
A good opportunity for the company in the future would be implementation of new GPS
tracking systems. It is an expensive opportunity now, but in the future it could be done,
because it would reduce companies running costs, checking drivers speed and waste of
fuel we could calculate more precisely what are our wastes and fix that. Next advantage is
that insurance companies are offering discounts to companies who are implementing
vehicle tracking systems, in case of stealing a truck it can be tracked and also drivers are
driving safer. GPS system also could be helpful tool for work with our customers, they will
be able to see where are their goods at the moment. Also checking drivers activity could
improve their performance, the most advanced drivers could get a bonus salary, this would
motivate drivers and would help company to achieve better work results.
Expanding to new markets is an opportunity for our company in the future. Nowadays our
company provides transportation service in Europe, Russia and former CIS countries. As
company will grow it is a good opportunity to start providing transportation services to
India, China, Brazil and USA, Australia, Africa and Middle east countries. Because there
are many competitors in Europe and in the future our company will grow and will be able to
do transportation in other growing markets, because there will be a demand for
transportation. Expansion will result in having more customers, more orders, meaning
more profit. Company is mainly doing business between Europe and Russia, and because
of unpredictable political situation we should think of different markets so that we would
always have where to provide our service.
Reducing debts of customers are very important for us as lately many our customers in
Russia were going through hard times because of sanctions and currency fall, so they are
not able to pay for our provided service on time, meaning that our company has to cover
the transportation costs for some time. Not getting paid for services are affecting our
company some workers are not getting paid on time. We cannot push our clients too
much, because we do not want to lose them so we have to always look for win-win
solutions, help them and by doing that help ourselves.
Even though our company is known in many countries, we still do not advertise our
company well. Good advertisement would attract more customers, meaning we could
provide more service to our customer, we do not own a lot of vehicles to serve many
customers but we could try to find solutions renting trucks and providing services for
customers, but it would mean that we need more employees to deal with more orders and
more transportation and it is not easy to find a good experienced employee who would
become loyal to our company and would not leave it if company would experience hard
times.
Threats
Main threat of the company is high and growing competition in transportation
industry. There are many big transportation companies in Europe and have
many years of experience, well established brand, many customers. Customer
is more preferably choosing well known company, because every customer is
looking for reliability even though our provided service could cost less, only
small number of customer will choose young company. Our company in the
future could improve marketing so that more customers would be aware of our
company, also we do have to maintain good performance, fast and good
quality deliveries, without delays and damages of goods. When our customers
will see good performance of our company they will pick us to provide
transportation service and we will be offering wider choice of services, be more
flexible then our competitors so that customers will not be willing to choose our
competitor.
Furthermore increase in fuel prices affect our company and are a threat,
because it increases our expenses. A constant need for fuel is increasing and
oil reserves are decreasing, what results in higher price. As our company
provides services to and from CIS countries, the solution to save up on fuel
expenses would be to fill the truck trunk fully in these countries, because fuel is
cheaper then in European countries.
A poor road condition is a very serious threat to our company. Bad conditions
create expenses for maintenance of our trucks, because trucks are faster
getting broken when driving through bad roads. More important threat is car
accidents, our company does the transportation through Poland, Russia, Baltic
countries where road conditions partly are badly maintained. Based on my own
experience of traveling through Poland it is often case of car accidents,
sometimes critical, our company cannot do much about that, but instructing
drivers on how to drive safely and with respect to other drivers could decrease
a possibility of accident happening. In the future road conditions is going to be
better, roads will be upgraded and our expenses of truck repair will decrease.
Technologies used in our company are out of date, the improvement or update
would be a very good solution to become more efficient. First of all company
computers are quite old and are running slower, meaning the work itself
becomes slower. Sometimes older computers are lagging, what can irritate
employees, and we do not need it, because employees should remain stress
free during work time to show the best performance when working with
customers and with the colleagues. Our company uses special communication
programs to connect with our customers and if computer starts to lag then our
customer gets answers slower what can irritate them, because customer
should get all information fast so that the waiting time would be minimal. Also I
noticed that company was using slow internet browser Internet Explorer and
my following suggestion was to install Google Chrome, because it is faster, so
employees can now browse the internet faster.
Bargaining power of
suppliers(Medium):
Mainly as a transportation
company we are not highly
influenced by our suppliers.
Most influence has the oil
companies and petrol
prices, so if oil companies
will raise prices, we will be
affected by that, because
our fuel expenses would
grow. Other suppliers that
are used for truck
maintainance do not have a
lot of influence, because if
we want to buy tires or
batteries we have a wide
choice, meaning we are not
affected by only one
supplier of tires or
batteries.
Threat of substitute
product and
service(Medium):
PESTLE analysis
PESTLE analysis is used to identify external factors that are affecting business.
There are 6 factors that affect company: P-Political, E-Economical, S-Social, T-
Political
Lately political factor is affecting our company a lot and not in a positive way.
The implementation of sanctions affected European as well as Russian business
world. Our companies as well as other transportation companies in Lithuania
were doing transportation to Russia and from it very intensively, but after
political changes, Russia lowered prices on goods inside the country and
increased production of domestic products, by doing so, many business
companies from Russia stopped using transportation services to transport
goods from Europe to Russia. This resulted in loosing strategic customers and
order quantity lowered, meaning many transport companies had to fire
workers, big companies that had large truck fleet had to stop activities of many
trucks which resulted in loosing a lot of profit. It is very important to our
company to maintain business with countries that has large population,
meaning high demand for transportation.
Economical
The economical factors that are influencing transportation business are directly
involved with reforms made by home or foreign countries. Mitransa Logistics
were struggling because of the economic crisis it is very hard to grow when
facing financial problems, costs are increasing and customer demands for lower
prices. Lately in Lithuania currency changed from national currency Litas to
Euro, what affected our company negatively. Currency change meaning
higher prices of goods and services. Also there were extra costs, to reorganize
activity of the company, rounding prices what resulted in disadvantage for
customer. The cost of transport repair services went higher. One advantage is
that interest rates given by banks became lower, meaning it is now better idea
to take a loan for business companies.
Social
Mitransa logistics during its work activities are facing certain structure of
society that cannot be changed by our company, but our company have to
adapt to it. Department of statistics have provided data, which says that
population in the last three years decreased by 4,2%. Almost one-fifth (18%)
Emigrants were 25-29 year old citizens, about 14% were 30-34 years old and
13% were 20-24 years old citizens. Demographic changes negatively affect the
company, because a lot of young manpower emigrating to other countries
and it is difficult to find a young, educated workers. However it should be noted
that in recent years the situation slightly changed to the brighter side, many
immigrants are returning to Lithuania. According to Department of Statistics
data, in 2013 there were 22 thousand people immigrated back to Lithuania.
This is favorable data for Mitransa logistics, they can easier find employees,
because of more workforce appearance.
Technological
New technologies that are coming into the market in nearby future will be able
to provide customers new services and will let the transportation forecasting to
be more effective and advanced. The future technologies will not only improve
the comfortability of driving, but also will improve safety.
The influence made by technologies is important for cargo transportation and
warehousing, because of the technological progress, transport vehicles are
improving. This lets companies to have better organization of goods flow from
Legal
Legislation has a huge impact on Mitransa Logistics activities, because
Lithuanian and foreign countries legal acts have differences, what makes it
more difficult to operate for transport companies that are transporting goods
internationally. There are different sanctions, that provide advantage for
national transporters. An example of that is the recent resolution adopted by
the Polish government to prohibit foreign operators the entry into Polish
territory and ride inside the territory on weekends. This solution results in high
downtime growth and is harmful. Mitransa logistics who is providing cargo
transporting services, are affected, because expenses increase due to excise
tax for fuel, national road tolls and other similar charges for the usage of road
infrastructure.
Environmental
Geographical and environmental factors are highly affecting transport,
especially transportation is affected by landscape: mountains, plain, valleys,
coastline. Landscape is making huge impact on all means of transport.
Lithuania is very important Eastern-Western transit country and geographically
is based in the center of Europe, it has borders with 4 countries: Poland,
Primary Activities
Inbound Logistics
Mitransa Logistics owns a fleet of 9 trucks, company has its own car mechanic,
so after the expedition driver drives the truck to the truck parking lot and then
mechanic inspects the truck so that when next expedition comes vehicle would
be in good technical conditions.
Operations
Outbound Logistics
Fuel costs
Cost of vehicle depreciation
Wage costs
Daily allowance for expenses
Cost of vehicle documents, drivers insurance, licenses and other
3.
4.
5.
6.
7.
7.1.
8.
Name
Vehicle Depriciation
Driver wages (variable)
Driver wages (fixed)
Taxes (30,98 %)
Mobile communication
Vehicle insurance
Cargo insurance
Drivers insurance
Toll road costs
Belarus
Overhead expenses
Fuel cost
TOTAL:
Cost 1 km.
Quantity
3 days
620 km.
3 days
3 days
1
1
1
1
Sum ()
35,57
74,40
48,30
38,01
11,74
58,16
110,43
2,00
1
1
208,32 l
23,48
23,48
233,32
635,41
1,0248
620 km.
Analyzing prime cost formation for the route Lithuania Belarus, we can see
that Mitransa Logistics spends around 1,02 euros per 1km while transporting
goods from Lithuania to Belarus.
Fixed Price. Mitransa Logistics applies fixed priced to its customers. It is when
long-term contracts are signed, at this time fixed price is agreed and during the
whole term of the contract remains unchanged. Such contracts usually contains
price clause - price cannot be changed. These contracts are commercial secret
of the company and are not published publicly.
Summarizing price policy and prime cost formation we can tell that price is
customer oriented and corresponds the transportation price. We can note, that
company is trying to meet the needs of our customers and increase the
demand by making agreements and reducing service prices. However Mitransa
Logistics use price reduction to a certain level so that it does not undermine
provided service, because cost reduction is quite risky process. Mitransa
Logistics is trying not to reduce costs by reducing expenses on employees,
because it can negatively affect work performance.
Promotion. Mitransa Logistics has an objective to form such an advertisiment
programs, which could grant proper delivery of company services to potential
customers.
In order to keep existing customers and attract potential customers, company
constantly informs users about provided service on the website, by offering
good quality service, fast and safe delivery of goods, information about cargo
movement. Customer can submit related questions on the website, and will get
answers to them also contact phone numbers are indicated on the website. By
using advertisements company aims not only to keep existing customer, but
attract new customers, introduce what is new in the company, emphasize the
positive sides of the company, expand its activities.
The promotion of the company runs in 2 phases:
Discount Description
Accumulation Discount
One-time Discount
Special Discount
Service
Support activities
Firm Infrastructure
Vision:
The vision of Mitransa Logistics is to be a leading company for providing cargo
transportation in Lithuania, and hold strong positions in former CIS countries
market.
Goal:
Main goal is to assure good service quality, excellent customer service, close
work with business clients, respect for the competitors and dynamic
development of the company.
Organizational structure:
CEO
Expedition
Department:
Forwarder - Manager
Financial
Department:
Operating
Department:
Drivers, Mechanic
Company Accountant - Is often called right hand of the head, forms a major
part of information used in the business activities. Accountant is calculating
companies assets, operating costs and revenues, determines profit, evaluates
and forecasts company operating results, plans and calculates taxes, controls
payments and performing many other specific accounting and analytical work.
Accountant not only informs employees about their work performance, but also
controls their activities, provides all the information needed to improve
operational efficiency, controls costs, takes care of all fraud and irrational
activities. Based on current accounting data accountant prepares companys
financial statements. Accountant, according to the Lithuanian laws and
regulations, has to guarantee the rightness of accounting records and must
prepare accountability on time. The instructions of accountant concerning
accounting are mandatory for all employees in the company.
container)
Finding cargo for empty transport in both directions
Route optimization
Filling the necessary paperwork
Management of customs formalities
Making insurance for cargo
Organizing financial settlement between sender and carrier
unless when forwarder immediately refuse to carry out this order. Orders that
are sent using fax, immediately confirmed by Mitransa Logistics company seal
and sent back to the customer.
Transportation order contains following details:
The contact person, her telephone number and address of the company.
The date of loading: 2014 09 30 and date of unloading is unspecified.
Name and address of both Shipper and Receivers.
Contact information of Mitransa Logistics manager and Premier Wine
manager
Number of pallets being transported 27 pallets, weight brutto 22,2 tons,
During the period of trip, driver is fully responsible for all the companys assets
entrusted to him:
During the period of trip driver must inform the supervisor or manager when
truck is loaded, unloaded, state border crossing time, when loaded abroad and
preliminary planning when returning back to Lithuania, technical condition of
the vehicle.
In addition to this, it is necessary to inform when cargo is not loaded/unloaded
on time, cargo is not delivered on time or if there are any other
inconveniences. If the truck breaks down in foreign country driver must consult
with supervisor for further action, clearly and precisely stating the essence of
the problem and all possible options to solve a problem. The driver is directly
responsible for reloading truck and if it is needed to reload, driver must inform
supervisor or manager.
Supervisor or manager must solve all the related problems concerning drivers
work, responsibly react to all the comments, advices and at agreed time has to
give an answer to important questions.
The driver has the same rights as all the other employees of the company and
can claim all the social and state guarantees and additional privileges and
guarantees provided by workplace (i.e. fixed workplace guarantee, crediting to
meet family needs, all the company celebrations, disaster relief, etc.)
Mitransa Logistics in in 2013 26 employees, in 2014 24 employees, in 2015
22 employees.
14
12
10
8
6
4
2
0
2013
2014
2015
Picture 2
In Picture 2, we see that Mitransa Logistics had 11 drivers in 2013, and in 2014
it decreased to 10 in 2015 it decreased by 1 more resulting 9 drivers and 1
mechanic who remained unchanged. In Expedition Department there were 13
managers, in 2014 decreased to 12, and in 2015 there are 11 managers.
Financial Department during these years contained 1 accountant.
According to the internal information of the company, we can analyze Mitransa
Logistics workers age and experience. As a sample 13 workers will be taken
(Picture 2)
45
40
35
30
25
Age
20
Experience
15
10
5
0
1
10
11
12
13
Picture 3
Analyzing Picture 3, according to employees age we can see that maximum
age is 39 and minimum 26. The average age of workers 32 years. The
average shows that company consist quite a young team. Examining the
experience of workers we can see that minimum is 4 years and maximum is 12
years, the average experience of employees in the company is 8 years,
meaning that company has good employees that have a lot of experience in
transportation business.
Summarizing Mitransa Logistics general characteristics of the employees we
can say that company employs young, educated and promising employees,
specializing in cargo transporting areas, having the ability to manage and make
decisions in improving the companys business.
As soon as at least one employee of Mitransa Logistics quits the job, the
negative effect is felt immediately. First of all, due to staff shortage the
company has to increase drivers working hours. And the duties of employee
who left should be shared amongst the drivers that are working in the
company. Even if company recruits new driver, time has to pass to reach
effective work performance. Elderly employees will have to waste their time to
trin new driver (show the transportation routes, schedule, existing rules of the
company and so on). So much time is spend until it is clarified how to deal with
customers, until employee is adapting to a team. This is why head of Mitransa
Logistics is trying to keep existing and trustworthy workers. To reach that he is
using internal management, creating great place to work by providing many
attributes (salary, motivational measures).
Salary in Mitransa Logistics is paid 2 times per month. The average salary of all
employees in the company is approximately 800 Euros. Drivers average fixed
salary per month is approximately 400 Euros, plus additional variable salary,
which depends on distance driven. Driver gets a bonus of 0,12 Euro for every
kilometer driven.
In addition to the basic salary paid to all employees, the company has
implemented motivational system, which is based on monetary and moral
premium that motivates employees.
Material motivation
Moral motivation
Technology Development
Procurement
We will make speed analysis, two routes will be picked and transporting vehicle
will hve the same cargo. First route Klaipeda(Lithuania) Kaunas (Lithuania)
Salcininkai (Lithuania) Minsk (Belarus), second route Klaipeda (Lithuania)
Vilnius (Lithuania) Lida (Belarus) Minsk (Belarus). The place of loading
Klaipeda (Lithuania). The place of unloading Minsk (Belarus).
Performing a cargo transportation by choosing the first route
Klaipeda(Lithuania) Kaunas(Lithuania) Salcininkai(Lithuania) Minsk
(Belarus) the quickness analysis is following (Table 1).
Time
Hours
30
22,5
4
3
59,5
Driving
Resting
Customs
Other
Total
Table 1
Analyzing Table 1 we can see that freight transporting by first route takes 2
days and 11,5 hours.
For comparison we will create a second route speed analysis. Cargo
transported by route 620km, truck departs from Klaipeda(Lithuania) through
Vilnius(Lithuania) and arriving in Minsk(Belarus).
Time
Driving
Resting
Customs
Other
Total
Hours
16
9
4
21
50
Table 2
Comparing both routes we notice that the transportation via first route takes 2
days and 11,5 hours and transportation via second route takes 2 days and 2
hours. This means that transporting cargo through Vilnius trip duration is
reduced by almost 10 hours and cargo is delivered faster.
Summarizing transport quickness we should emphasize that fast cargo delivery
does not benefit Mitransa Logistics, because sometimes it increases the
expenses of the company, because transportation prime cost is determined by
1km distance travelled or 1kilogram of cargo load.
Regularity. Cargo picking and transporting can be set precisely and regularly.
Carriage of goods can be assigned to the suitable time of the day, day of the
week or distance.
Mitransa Logistics are creating regular cargo transportation trips. Company is
using their own scheme, which is based on a regular route, where traffic
between two places is repeated many times. The essence of this scheme is
basically that transport carries goods one-way and returns without load.
Transporting by this particular way makes the efficiency of transport 50%.
Analyzing regularly carried out route scheme by company. Selected route
Vilnius (Lithuania) Lida (Belarus) Minsk(Belarus). Along this route transport
vehicle will go forward with the load and will return empty (Picture 4).
Vilnius(Lithuania)
Minsk(Belarus)
Picture 4
Analyzing Picture 4, we can see that transport departs loaded(red arrow), back
from Minsk to Vilnius empty(blue dotted line). In this case company is
Vilnius(Lithuania
)
Lida(Belarus
)
Maladzyechna(Belar
us)
Minsk(Belarus)
Picture 5
Analyzing Picture 5, we can see that from Vilnius transport departs
loaded(Black straight line), in Lida part of cargo is unloaded(red dotted line),
from Lida cargo is transported to Maladzyechna, where again part of cargo is
left(yellow dotted line). From Minsk to Vilnius transport comes back empty(blue
dotted line). In this case company quite effectively uses the vehicle, so that the
efficiency of transport is 80 percent.
Summarizing regularity of transportation movement in the company, we can
conclude that Mitransa Logistics forms constant regular weekly, daily transport
routes. This kind of route regularity ensures efficient use of vehicles.
Work schedule. Mobile employee scheduling time the time from the
beginning of work to the end, during this time employee is at his workplace
carrying out his functions or activities, so to say the time devoted to various
road transport activities.
Drivers performing mobile road transport activities, work in the company not
longer then 6 hours. If total sum of working hours is 6-9 hours, the break of at
least 30minutes is inserted into the schedule, and if sum of working hours is
more then 9 hours, minimum 45 minutes break is inserted. The company allows
driver to divide his breaks into the shorter breaks, which can be minimum 15
minutes.
Work trips. Constant service location for Mitransa Logistics drivers are work
trips. Drivers trips extend via international routes in Eastern Europe and Baltic
states. (Picture 6) The data is according to year 2013.
Picture 6
As we can see from the data chart, most of the constant work trips are to
Belarus 8% and Russia 6%, 0,8% to Ukraine and Baltic States 1,4%.
Company work trips are our service provided to our close customers who
always uses our company to transport cargo.
Customer
GLOBETRANSA
BALTIJOS GRUP
HANSA SEWAYS
ARDARIKAS
BALTIC FREIGHT SERVICES
GELNA
KLAIPEDOS TRANZITO CENTRAS
PRIVI
DELTA CLUB
PREMIER WINE
0%
Customer
Analyzing the chart we can see that most ordered transportation services are
from PLC Priemier Wine around 18,6%, PLC Delta Club around 15,4% and
PLC PRIVI 14,53%. All other customer orders annualy ranging averagely
from 9% to 11%. Customers are one of the main factors influencing Mitransa
Logistics activities, but it is very important to determine competitors.
Competitor analysis is long and complex job, because it is extremely difficult to
find out about competitors profits and reveal their opportunities.
City
Vilnius
Panevezys
Vilnius
PLC Svoris
PLC Forlika
Vilnius
Klaipeda
The price of transport tracking system varies from 119-149 EUR and additional
fuel tracking system cost 232 EUR 261 EUR, plus additional price for
installation 29 EUR. It is expensive, but in long run investments pay off,
because we can safe up from 10% to 40% on transportation costs. Mitransa
Logistics owns 8 vehicles, the total implementation of everything would cost
the company between 3040 EUR 3512 EUR.
Currently company are facing some challenges and are not ready to spend
resources on GPS tracking system, also they trust the drivers, because they are
trying to hire only sophisticated and honest drivers, also this tracking system is
more useful when transport fleet is wider. But in the future company will
definitely think about implementation of this system and it will help to save on
company expenses.
Turnover
12,000,000.00
10,000,000.00
8,000,000.00
Turnover
6,000,000.00
4,000,000.00
2,000,000.00
-
Lately Mitransa Logistics experienced a fall in turnover, we can see that since
2009 until 2011 the turnover was growing, in 2009 approximately 2 million
euros, in 2010 approximately 5 million euros and reaching peak in 2011 10
million euros, 2012 remained unchanged amount of turnover, but in 2013
turnover have fallen to 5 million euros and remain the same in 2014. The
reduction of turnover is not a very good factor for the company, because the
higher is turnover the bigger number of profit is for our company. The more
service we can provide, the more profit we can get, what in result helps
company to grow.
Recommendations
German language that could help our company to find customers in Germany
and we could start providing our service to them.
Being a small business company we should be very careful with our customer
debts. Lately there were many customers from CIS countries that were not able
to pay for our services on time, it affects our company, because workers were
not receiving their salary regularly. It is of course important to maintain good
relationships and help our customers in their hard conditions, but also we
should be more strict about debts of customers. If we will let non-payment of
debt for too long it can critically affect our company.
Conclusion
In conclusion analyzing principles of Mitransa Logistics transportation service
we can see that company is experiencing challenging times due to many
internal and external factors that affect our company.
The key element of company success is well trained, loyal, experienced
employees, that gained their experience by working in large, successful
transport companies, also good and close relationships inside the company
helps to achieve efficient work performance, good atmosphere in the company
makes employees want to go to work, because they are like a family and they
enjoy their job, meaning they work more efficiently then employees who would
work just because they have to. Every employee knows vision and goals of the
company and all of them are reaching the same goal to improve the company.
Employees are mature people who have an experience in communicating with
people, that helps to interact better with customers, what in result helps to
create a good reputation of the company. Having such employees is the most
advantage of the company, because they help company to move forward and
expand.
Mitransa Logistics is a promising company, company will grow and will become
leader as every employee in the company are working very hard to achieve
common goals. Great efforts always results in great outputs.
References: