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THE ROLE OF FINANCIAL CONSULTING IN OPTIMIZING LOGISTICS
OPERATIONS
Zh. Mussin, Master Sierra States University (USA, Los Angeles)
DOI:10.24412/2500-1000-2024-3-2-112-116
Abstract. This article explores the vital role of financial consulting in enhancing the efficiency and sustainability of logistics operations. It delves into various financial consulting models such as risk management analysis, cost-benefit analysis, investment analysis, and strategic financial planning, highlighting their impact through real-world examples from companies like Tesla, DHL and Microsoft. The discussion emphasizes how these models contribute to optimizing logistics processes, reducing operational risks, and driving innovation in the logistics sector.
Keywords: financial consulting, logistics operations, risk management, cost-benefit analysis, investment analysis, strategic planning.
According to research and consulting firm Armstrong & Associates Inc (US), the volume of the global logistics industry fluctuates between 8 to 12 trillion dollars per year, which accounts for approximately 12% of the global GDP [1].
Financial consulting facilitates the optimization of logistics operations. Given the trend of continuous transformation in the global economy, financial strategies require more detailed examination to address emerging problems and vulnerabilities in logistics. The aim of this study is to analyze the role of financial consulting in enhancing the efficiency and sustainability of logistics operations. The article offers a comprehensive analysis of methods and tools used in financial consulting and logistics, and their subsequent impact on operational efficiency.
Historical overview. To better understand the modern role of financial consulting, let's examine the stages of its development and its increasing influence on logistics operations.
In 1913, the US established the Federal Reserve System (FRS) to ensure the stability of the national currency, economic stability, and control over the banking system. In 1934, the US government formed the Securities and
Exchange Commission (SEC), whose primary task was to protect investors and maintain fair, transparent, and efficient securities markets. The emergence of these structures played a key role in shaping financial regulation.
After World War II, there was a significant surge in corporate growth and state investments, which contributed to the development of important financial theories. In 1952, the Modern Portfolio Theory by Harry Markowitz appeared, and in 1964, William Sharpe introduced the Capital Asset Pricing Model. These discoveries led to revolutionary changes in investment strategy and risk management.
The 2008 US subprime mortgage crisis underscored the need for stringent risk management and a more technologically advanced approach to financial operations. These historical stages, combined with theoretical advancements, formed the basis of modern financial consulting practice.
As of 2023, the global consulting services market was valued at 296,44 billion dollars and is expected to expand at 3,87% annually during the forecast period, reaching 372,21 billion dollars by 2031 (fig. 1).
2024 2025 2026 2027 2028 2029 2030 2031
Fig. Projected growth of the global financial consulting market until 2032, billion dollars
Integration of financial consulting in logistics processes. The integration of financial consulting into logistics processes is a crucial aspect that contributes to increased efficiency and the introduction of innovations in the logistics sector. This integration involves the application of various financial analysis tools and strategic planning to optimize logistics operations:
Risk management analysis. This financial consulting model focuses on identifying, assessing, and managing risks in logistics operations. It includes analyzing potential market, operational, and credit risks, as well as developing strategies to minimize or eliminate them.
Throughout 2022 and 2023, Tesla Inc demonstrated an exceptional ability to adapt to changing global conditions through effective supply chain risk management. Amid the COVID-19 pandemic, Tesla achieved record revenues in 2021, amounting to 53,8 billion dollars, a 71% increase from 2020. This success was partly due to the company's strategy of diversifying suppliers, initiated in 2022, which reduced dependency on single sources and contributed to the resilience of their production operations even amidst global disruptions.
Additionally, Tesla actively expanded its production capacity by opening new factories in Berlin, Germany, in 2021, and in Texas, US, in 2022. This geographical expansion not only mitigated logistical risks but also strengthened the company's position in both the European and American markets. Furthermore. Tesla's investments in developing new technologies and innovations in 2022
and 2023 increased their production capabilities and reduced operational risks, expected to lead to further revenue growth in 2024 [2].
Cost-benefit analysis: This approach aims at evaluating the economic efficiency of different logistics strategies. It includes calculating and comparing the total costs and benefits of various logistics operations and projects. its environmental initiatives. At the beginning of the 2022, Microsoft made a strategic decision to focus on the development of cloud services such as Azure and Office 365. This decision, based on a thorough cost-benefit analysis, involved significant investment in development and infrastructure enhancement. In the first quarter of 2023, the company reported a significant 50% increase in Azure revenues compared to the previous year, clearly indicating the success of this strategy.
By 2023, Microsoft continued its investment in cloud technologies, which not only strengthened its market position but also significantly increased its financial profitability. By the end of the fiscal year, the total revenue from Microsoft's cloud services, including Azure and other cloud offerings, exceeded 60 billion dollars, highlighting the strategic importance of these investments for the company's overall financial health [3].
Investment analysis. This model involves assessing the effectiveness of investments in logistics systems and technologies. It includes analyzing the expected returns, risks, and potential impact of investments on the overall efficiency of logistics operations. From 2022 to 2024, Apple actively utilized investment analysis to determine its strategic development directions. In 2022, the company allo-
cated over 20 billion dollars, to research and development, exceeding the previous year's investment by 15%. These investments focused on enhancements in Artificial Intelligence (AI), smart devices, and operating systems
By 2023 Apple announced the launch of new products, including upgraded versions of the iPhone and MacBook, as well as innovative smart home devices. These innovations were the result of previous investments in research and development, highlighting the company's strategic planning. In the fourth quarter of 2023 Apple reported a significant increase in revenue, especially from the new product line, which showed a 20% growth compared to the previous year [3].
Strategic financial planning. This model directs financial consulting towards developing long-term financial plans for logistics companies. It involves allocating resources, planning investments, and budgeting based on market analysis and operational activities
The application of the financial consulting models described in the article in logistics operations demonstrates their significant impact on both the successes and challenges faced by logistics companies. The employed models underscore the importance of a strategic and informed approach in financial decision-making in the logistics sector, highlighting the potential for improving operational outcomes and reducing risks.
Modern trends in logistics operations.
The application of modern technologies in
From 2022 to 2024, DHL actively implemented strategic financial planning, leading to significant improvements in operational efficiency and financial results. In 2022, the company invested in warehouse automation and supply chain optimization, enhancing operational efficiency and reducing delivery times. These efforts led to a 15% reduction in operational costs, significantly impacting profitability. Continuing its strategy in 2023, DHL invested in environmentally friendly vehicles and renewable energy sources. These investments resulted in a 20% reduction in fuel expenses, improving the company's ecological footprint while simultaneously reducing operational costs. In the third quarter of 2023 the company reported a 25% increase in revenue compared to 2023, improved operational processes and cost reductions contributed to a 30% increase in operating margin [4, 5].
Let's consider the potential application of the described financial consulting models in table.
logistics has introduced tools such as financial modeling software, risk assessment algorithms, and data analytics. These tools have significantly improved the accuracy and scale of financial analysis. According to a Gartner report, 50% of supply chain companies want to invest in advanced analytics and AI technologies by 2024.
AI-powered warehouse robotics this trend that may be beneficial in the near future. According to Gartner, 75% of large enterprises will supplement their warehouse operations
Table. Application of financial consulting to improve logistics operations [6].
Financial consulting model Potential achievements Possible challenges
Risk management analysis Reduction of operational risks, enhanced decision-making Significant financial expenditures, integration challenges
Cost-benefit analysis Improvement of logistics chains, optimized resource allocation Complete restructuring within the company, long-term adaptation period
Investment analysis Strategic investment in technology, increased operational efficiency Need for hiring additional staff, resistance to change within the organization
Strategic financial planning Better risk management strategies, long-term operational sustainability Aligning all departments with new strategies, potential for short-term disruptions
with smart robots by 2026. As of now, robots achieve 90% success, requiring operator intervention about every 72 seconds. Thus, it's too early to speak of their effective usage without constant supervision [7].
The potential of driverless technology to revolutionize road freight transport, enhancing both speed and safety, is immense. In 2021, the market for autonomous trucks surpassed 900 million dollars, with projections indicating a steady annual growth rate of 17% through to 2028. Major logistics firms such as FedEx, UPS, DHL, and Schneider National are increasingly focusing on this innovative mode of transport.
At present, integrating autonomous trucks into fleets comes with a significant price tag and necessitates the presence of a human driver for safety reasons. However, forecasts by WeForum suggest that by 2030, the autonomous truck industry will witness a widespread adoption of driverless vehicles, potentially reducing ownership costs by up to 45%. Deloitte's 2021 survey underscores this trend, revealing that 80% of the companies surveyed were either already investing in or planning to invest in autonomous trucking and drone delivery technologies [8].
The findings from the Future Today Institute in the third quarter of 2023 highlight the
environmental benefits of integrating route optimization in supply chains.
A prime example of this strategy's implementation is seen in FedEx, a leading figure in the logistics sector. The company has unified its various shipping divisions - express, ground, and freight - under an initiative named the DRIVE transformation. This includes a component termed Network 2.0. Through this strategic move, FedEx anticipates eliminating 10% of its routes by 2027, potentially leading to cost savings of up to 2 billion dollars. Projections suggest a compound annual growth rate of 10,9% 20232028, indicating a robust expansion in this technology sector.
Conclusion
Analyzing the role of financial consulting in logistics, it is evident that it significantly influences the enhancement of efficiency and sustainability of logistics operations. The adoption of innovative technologies such as blockchain and AI demonstrates the capabilities of financial consulting in optimizing processes and reducing operational risks. The examined cases from different companies show that effective financial management, strategic planning, and investment analysis play a key role in achieving operational advantages and sustainable development in lo-
gistics.
References
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2. Richey Jr, R.G., Chowdhury, S., Davis-Sramek, B., Giannakis, M., & Dwivedi, Y.K. (2023). Artificial intelligence in logistics and supply chain management: A primer and roadmap for research. Journal of Business Logistics, 44(4), 532-549.
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4. Leila Abdullina, Aleksandr Podolskiy, Margarita Deeva, Margarita Gorovko and Yuliya Shulepova, Determining the carbon footprint of Russian residents depending on their food and movement patterns // IOP Conf. Ser.: Earth Environ. Sci. 677 052026, 2021.
5. Konstantinov D.S. Integration of energy-efficient technologies in refrigeration systems: reducing cost and environmental impact // Proceedings of the XXXVIII International Multidisci-plinary Conference «Innovations and Tendencies of State-of-Art Science». Mijnbestseller Neder-land, Rotterdam, Nederland. 2023.
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РОЛЬ ФИНАНСОВОГО КОНСАЛТИНГА В ОПТИМИЗАЦИИ ЛОГИСТИЧЕСКИХ
ОПЕРАЦИЙ
Ж. Мусин, магистр Университет Сьерра-Стейтс (США, г. Лос-Анджелес)
Аннотация. В этой статье исследуется жизненно важная роль финансового консалтинга в повышении эффективности и устойчивости логистических операций. В нем рассматриваются различные модели финансового консалтинга, такие как анализ управления рисками, анализ затрат и выгод, инвестиционный анализ и стратегическое финансовое планирование, подчеркивается их влияние на реальных примерах таких компаний, как Tesla, DHL и Microsoft. В ходе обсуждения подчеркивается, как эти модели способствуют оптимизации логистических процессов, снижению операционных рисков и стимулированию инноваций в секторе логистики.
Ключевые слова: финансовый консалтинг, логистические операции, управление рисками, анализ затрат и выгод, инвестиционный анализ, стратегическое планирование.
