AD ALTA
JOURNAL OF INTERDISCIPLINARY RESEARCH
LOGISTIC SYSTEMS IN CLUSTERS: BIOMASS CASE STUDY
a
MANTAS SVAZAS,
b
VALENTINAS NAVICKAS,
c
EVA
IVANOVA
a
School of Economics and Business, Kaunas University of
Technology, Gedimino str. 50, 44239, Kaunas, Lithuania
b
School of Economics and Business, Kaunas University of
Technology, Gedimino str. 50, 44239, Kaunas, Lithuania
c
Faculty of Social and Economic Relations,
Alexander Dubček
University of Trenčín, Študentská str. 2, 911 50, Trenčín,
Slovakia
email:
a
mantas.svazas@ktu.edu,
b
valentinas.navickas@ktu.lt,
c
eva.ivanova@tnuni.sk
This article was created within the project VEGA no. 1/0918/16 title: Risk
management of SMEs in the context of clusters´ involvement activities in the Slovak
Republic.
Abstract: Logistics systems in many sectors of the modern economy have a significant
impact on their competitiveness. Having examined the general logistics systems
functioning principles, their types and conditions of formation, authors of the article
have determined that in order to ensure the competitiveness of each more or less
clustered economic sector, a unique logistics system is needed. By researching
biomass clusters, authors of the study have developed their logistics system that
involves planning, provision, production, resource flow distribution from producer to
user, and ensures synergistic effects for cluster participants. Authors’ empirical
research on hypothetical biomass clusters fully confirmed the theoretical assumptions
about the impact of logistics systems on the competitiveness of biomass clusters. The
results of empirical research have indicated, that logistics system is effective in case of
both large and small intensity of biomass consumption. It has been established that
evenly increasing demand for biomass can be based on further biomass deposits, and
closer deposits are used to neutralize the sudden jumps in demand.
Keywords: Logistic systems, supply chain, clusters, biomass clusters, competitiveness.
1 Introduction
Logistics systems today are critically important when seeking
business efficiency. In a competitive market, rational logistics
solutions ensure the ability to profitably operate in the market.
Many scientists who investigate the logistics systems indicate
that they link production and consumption (Bartolacci, M. R.,
Leblanc, L. J., Kayikci, Y., Grossman, T. A., 2012), and that
logistics is a science that covers production, planning,
organization, control and delivery of the final product to the
consumer (Bazaras, D., 2005, Christopher, M., 2007, Palšaitis,
R., 2010). Logistics includes transportation of goods,
warehousing, customs operations and payment systems (Arvis,
J.F. et al, 2014). Logistics, therefore, consist of processes
involving the planning, implementation and control of the flow
of goods, services and related information (Vitasek, K., 2013).
Logistics object is movement of material goods and their
transformation process (Braškien
ė, L., 2009); the goal and
mission is to deliver high-quality products on time (Palšaitis, R.,
2010).
In the context energy market transformation, the use of fossil
resources is abandoned moving to the use of renewable
resources. At this point biomass is the only renewable resource
that allows to ensure uninterrupted production of energy. To
achieve this a logistics system adapted to specific activities
(energy production) in the region needs to be established. This
way, the authors of the study created a medium-sized
hypothetical biofuel cluster logistics system. The main axis of
the cluster's activity is the use of indigenous biofuels for the
production of thermal energy, electricity or natural gas. Biomass
cluster is a dynamic structure therefore in different countries it
can be formed using different types of entities. It depends on the
abundance of biomass, the existing supply and distribution
infrastructure, and prevailing type of energy production in
particular country. Biomass that is not used for process heating
can either be converted into products, thus increasing the
conversion efficiency, sold as feedstock or fuel to external
customers (Hackl R., Harvey S., 2016). Another advantage of
integration into an industrial cluster is that the existing
infrastructure (boilers, utility systems, air separation plant, etc.)
is already in place. The cluster structure can be influenced by the
general state of cluster culture in the country. Other factors, such
as financial state of the business, scale of cooperation, and level
of corruption, create the conditions for facilitating or
complicating the development of clusters. As the Fourth
Industrial Revolution is approaching, technological advancement
and responsiveness to innovative solutions significantly impact
the clustering of biomass. Biomass clusters help to preserve
forests, but it requires the involvement of all stakeholders.
Stakeholder engagement within the cluster is necessary to ensure
efficient and coherent use of forest resources. In forest based
rural communities this approach requires tighter coordination
between members of the community, existing forest product
producers, non-forest business, landowners, and land managers
interested in developing cluster benefits (Saah, D., et al., 2014)
The research topic is unique, because authors aim to investigate
the processes of logistics system functionality adapting them to
biomass clusters. This is achieved by developing the most
rational versions of logistics systems based on which the cluster
would operate on the given region level. Since biomass cluster is
a specific business system (dominated by logistics), it requires a
smoothly functioning logistics system. Cost management is one
of the key factors determining the success of a logistics system.
Authors' research suggests that cost management contains
continuous analysis and control seeking to deliver solutions that
are relevant to a particular season.
In this study the authors would like to introduce the types of
logistics systems and the context of their development. Logistics
systems contain different business activities - purchasing,
marketing, and distribution. Having evaluated these factors, we
can move towards the energy systems. The activity of the
biomass energy cluster is shaped by its specific characteristics.
Biomass-fired energy projects have also been shown to generate
local income, through sales of energy and by providing a market
for local wood, agricultural wastes and energy crops (Walker,
G., 2008). It lets to compare the different regions and revenue of
business subjects in these regions. biomass contributes to the
decentralization of the energy market (Grigoras, G., Scarlatache
F., 2015, Faße, A., et al., 2014). The decentralized electricity
generation is intended to provide small-scale power close to
users, using a broad range of renewable technologies. Having
considered these important circumstances, we can better
understand the components necessary to develop a biomass
cluster logistics management system.
Our study develops a logistic system tailored to the biomass
cluster. It takes into account the purpose of the supply, the
frequency, the main operating costs of the biomass cluster, and
the specifics of the activity of the biomass cluster. The cluster's
activity ensures that natural waste will be used for the production
of energy, which cannot be otherwise recycled. Sustainable use
of resources is a prerequisite for the biomass cluster, which
distinguishes it from other energy producers. Building on the
economic and financial value of unprocessed bio-waste, the
cluster is becoming an important economic entity shaping the
energy policy of the country's regions.
The logistics of biomass energy sector is quite complicated. It is
impacted by seasonality and which affects the final energy price.
Under more favorable climate conditions, it is possible to obtain
the required amount of biomass at a lower cost. However during
the winter or prolonged periods of rain biomass price rises at a
significant rate. In the spring time, working with heavy
machinery in the forest and transporting wood from distant and
uninhabited areas is difficult because of the wet soil and missing
or poor conditioned roads (Kuula J., et al., 2011). For
overcoming seasonal changes and for making all these processes
efficient and smooth, one should develop the whole production
process in general, and each actor’s role separately. In addition,
the logistics and infrastructures in this process should be
improved nationwide, which is expensive and diminishes the
profitability of the whole bioenergy. This necessitates a very
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