Risk management in Baltic logistics

Abstract

The management of logistics risk in drink distribution, as in other business sectors of the Baltic States, is of great importance, especially in today's conditions of economic depression. Logistics risks have a significant influence on customer service level and profitability. Distribution of beverages and other commodities in the Baltic States is affected by present low consumption levels as well as the small size of the three countries' interconnected markets.

The trends of the beverage market in the Baltic States have been established. The distribution and delivery systems of ―Coca-Cola Hellenic Bottling Company‖ have been analyzed, from the bottling plants to the retail customers and end users. The fluctuations of customer demand by seasons and days of the week have been determined.

Solutions have been found for optimal logistics risk and for the ratio between the customer service levels and the logistics cost. In practice, the largest savings have been achieved by reducing the number of warehouses and the use of transportation outsourcing.