Logistics chain analysis of a wheat-milling company: a basis for developing efficiency models for transport activities

This paper develops a methodological approach that is meant to compute and assess the financial efficiency of transport activities within a company. The applicability of this approach is demonstrated by using 1998/99 data and information from the Upper Egypt wheat-milling company. It starts by constructing two logistics chains that simulate the process involved in the wheat-milling business in Egypt. These chains are used as the basis for identifying types of transported commodities, unique transport phases, trip origins and destinations of each of these phases as well as the transport modes and providers involved. This is followed by compiling and synthesizing for each transport phase a number of origin/destination matrices representing operational data and generic operational variables. In addition, similar size matrices are synthesized to represent transport costs and transport revenues. Manipulations of the developed matrices are undertaken to compute financial efficiency for transport activities as well as to develop disaggregate route-based cost and revenue allocation models for transported wheat and flour. These are used in identifying profitable and on-profitable transport routes. Such conclusion assists in re-pricing transport services along certain routes, or termination of operation of other routes.