Ascona Logistics Strategy to Deliver 6% Logistics Cost Savings

2022: Logistics Network Optimization Results

Askona Group summed up the first results of the implementation of the three-year strategy for the development of its logistics network, prepared in January 2022. Reksoft (Reksoft) announced this on August 30, 2022.

Askona's development strategy provides for continuous progressive sales growth, which is directly related to active regional development and capacity growth. For the harmonious development and improvement of the customer service, the management set the task of developing a strategy for the development of the logistics network. Within the framework of the project, a strategy for the development of the network for three years was formed, containing a number of initiatives to improve its operational efficiency. The main requirement in the formation of the strategy was to minimize the delivery of goods to customers, provided that the increase in logistics costs was excluded, - commented Alexander Shamaev, head of the development and projects department of Askona Group of Companies.

The partner of the project was the strategic consulting team of the Russian division Accenture, which recently joined the Reksoft Group.

Our customer is deeply engaged in the issues of his strategic development. Creating a new model of the logistics network, we had to determine how the holding would optimally develop production and the network? Is it necessary to increase existing capacities, or is it more correct to open new production facilities? If so, where and what capacity, in what order? To solve these problems, we used digital models of the logistics network formed in Anylogistix software. In addition, an important task in developing the network was the need to limit the increase in logistics costs, provided that the level of client service increases, "said Valery Reshetnikov, project manager from the contractor's team, senior manager of the Supply Chain and Operations Management practice of Reksoft Consulting.

As a result, initiatives aimed at improving operational efficiency of logistics were formed. To do this, a model of the logistics network was built, which makes it possible to search for the optimal location of production and warehouse clusters, to determine the optimal flows in the logistics network, ensuring the minimization of delivery times at optimal costs. Askona specialists were involved in model development and modeling, which made it possible to form the internal competencies of the company.

Initiatives aimed at improving operational processes were also formed, including assessing the feasibility of forming combined production and warehouse complexes and automating regional warehouses, namely the use of conveyors and narrow-passage equipment. For this purpose, the WMS Warehouse Management System or WOS (Warehouse Operation System) was evaluated in regional warehouses.

The project team formed a mathematical model of the logistics network and analyzed its development options taking into account the company's strategy. His main conclusion was the understanding that the development of production and warehouse complexes, and not dedicated distribution centers, would be optimal for Askona. In addition, the analysis showed that it is possible to reduce regional warehouses without losing service level. The logistics development strategy adopted by Askona allows us to save 6% on logistics costs, "said Liubov Rozhkova, Managing Director of the Supply Chain and Operations Management Practice at Reksoft Consulting.

As of August 2022, the Askona logistics network includes two production clusters in the Vladimir region and Novosibirsk, two large distribution centers in Moscow and St. Petersburg, as well as 44 regional warehouses.

Askona has already implemented part of the roadmap, within which it optimized several logistics facilities, while increasing the level of client service. Despite the fact that 3 warehouses were excluded from the network, the OTIF indicator increased by 2%, - commented Igor Tozhokin, Logistics Director of Askona Group of Companies.