The Importance of Systems for Controlling Logistics Costs in the Supply Chain: A Case Study from the Slovenian Automotive Industry

Sebastjan Škerlič
University of Ljubljana Faculty of Maritime Studies and Transportation

Robert Muha
University of Ljubljana Faculty of Maritime Studies and Transportation

Abstract

Participating in the automotive industry brings new responsibilities for suppliers who, in order to meet customer demands, must strive towards improving business processes, while at the same time reducing costs. These demands can disrupt the operations of companies that do not have a system for controlling logistics costs. On the other hand, customer demands can be the cause of other types of disruptions in companies that have such a system in place, stemming from an excessive focus on cost reduction. To tackle this problem, a survey was conducted on a sample of 30 Slovenian companies that operate as suppliers in the automotive industry. Its objective was to determine how different customer demands along the supply chain can affect the business processes of suppliers and the level of logistics costs. The survey revealed that companies that use a system for controlling logistics costs experience fewer disruptions in their business processes in their efforts to satisfy customer demands. These companies also display a higher level of integration of business processes and use a different approach when dealing with the various participants of the supply chain. The survey also sets clear participation guidelines for suppliers in the supply chain of the automotive industry and points out how companies can benefit from using a system for controlling logistics costs in other ways, aside from the cost controlling aspect.