Vladislav Yuritsyn

«Technologies of management» (Almaty), № 10 (22), October, 2002.

There is a myth about a favorable geographical position of Kazakhstan. Its supporters represent a position of the country practically in the centre of Eurasia; almost the top of that the destiny can present the state from the direction of geography. Actually remoteness from seas and oceans always was considered as geographical disadvantage, rather than advantage since it resulted in increasing of transportation costs.

As the Republic of Kazakhstan is the midland country, the transportation component in the cost of its export-import production varies within the limits of 20-25 %. Whereas in the states located close to the seas and oceans, this share is about 10%. Therefore despite of nearness of the capacious and prospective markets of Russia and China there is a problem Kazakhstan facing - to minimize transportation expenses when organizing export-import transportations of goods.

Another important transportation task of national importance is attraction of additional volumes of transit transportations. While annually more than 300 million tons of goods pass through Suez canal or 15 million tons of transit goods cross Klaipeda port only, actual volume of transit rail transportations of Kazakhstan for 2001 was 5,6 million tons.

In this situation it is vitally important to minimize the costs of export-import transportations and to increase the volumes of transit goods for the republic. Forwarding companies giving clients a wide set of transport and logistical services have a key significance in solving both tasks. They should do their best to offer the most reliable and economical routes to the consignors and consignees working in a mode of international trade.

At the beginning of 90th the first private forwarding companies began to appear in Kazakhstan and now quantity of o known companies is estimated by dozens. One of the leaders in these services market is TRANSSYSTEM IFC LLP.

Company was founded in 1991 as a scientific enterprise. In 1993 it began to engage in private forwarding business among the first in the Republic of Kazakhstan, switching from theory to practice. In 1995 the company became a member of FIATA (International Federation of Freight Forwarders Associations). TRANSSYSTEM was recognized as the best forwarding agent in Kazakhstan. Now it remains the only forwarding company in Central Asia which has received the Certificate of Conformity to the International Quality Standards of Management ISO 9002, guaranteeing high level of reliability of work. The company draws out an aggressive marketing policy, it actively participates in professional exhibitions, seminars, «round tables», conferences, information actions.

Since the moment of its foundation the company has been attracting the clientele, developed and counted on the integrated approach and quality of services as well as on «system business». Basic specialization of TRANSSYSTEM is the organization of export-import, transit, local transportations of goods by all types of transport, custom clearance, terminal processing and «Door-to-Door» delivery.

The distinctive feature of the company is an active work on new transport corridors: TRACECA, Trans-Asiatic railway line, "North - South" corridor, project of “2К” (Kaliningrad - Klaipeda). With the purpose of transport costs reduction TRANSSYSTEM tries to use opportunities of a competition between alternative transport corridors.

Transport business is one of the most difficult one in the world, as the “forwarders” are under a constant pressure of trading and manufacturing companies trying to reduce a transport component in the structure of costs of production as much as possible, plus a powerful competition among forwarding companies. Despite everything TRANSSYSTEM is developing successfully. 145 persons work in the company (it is the largest private forwarding company in Central Asia today), Head office is located in Almaty, branches are situated in Astana, Аtyrau, Аktau, Tashkent, Bishkek, recently an office in Moscow has been opened, there is a wide network of regional agents and partners.

Company is engaged in export of services, it has a wide geography of clients and partners. Besides representatives in CIS countries and Baltic TRANSSYSTEM works with European, Turkish, Iranian, Indian, Chinese, Korean, Japanese sea, transport, forwarding, trading and industrial companies.

"Technologies of management" addressed to Mr. Eduard Kaplan, Managing Director of TRANSSYSTEM IFC LLP with the request to tell about the methods of management that helped to achieve results mentioned above.

- In process of development of economy the qualitative management starts to play more and more important role. In Kazakhstan it is a necessary condition of creation of effective business. If to speak about principles on which we base in the work they differ a little from the principles described in the theory of management, the concepts TQM, the standards ISO 9000, the books of Bill Gates, Jack Welchi, Lee Yakkoka and others. The principles are identical, and we are not going to invent a bicycle. At the same time we understand, that there are problems; first, in understanding and informal practical realization of given principles; second, in their adaptation to local conditions and, thirdly, in acceptance of concrete decisions in concrete situations.

A search of “gold eggs”


Sometimes I bring the following conditional example to employees. Two cafes about one size are located in one district of city. In first of them it is not a lot of visitors, but they suffice to make both ends meet, whereas in the second cafe always it is the problem to find a free little table.

Let's pay attention to personal qualities of owners of these cafes. The first owner is self-satisfied, always he feels comfortable in his cafe. He does not notice, that the clothes on the tables are not fresh absolutely, some waiters stink a sweat, and a fillet of mutton could be more soft. His existing state of affairs arranges he and it does not cause a internal discomfort.

The feeling of satisfaction visits the second owner not frequently, therefore he notices all: as far as fresh florets on tables, as far as politely the waiter has addressed to the client as far as the mirror etc. The ideas of the new assortment, new menu, new design, the expansion visited him. He is in constant search, in constant movement. The reason of success of the second owner consists in the skill to notice a trifle, in a dissatisfaction of achieved, in the aspiration constantly to improve and to develop the business.

In the concept of the Total Quality Management (TQM), the standards ISO 9000 there are key concepts of "discrepancies", the remedial and preventive measures of elimination (prevention) of discrepancies», and also a concept of "constant improvement”. The discrepancies come to light on the basis of internal and external technological audits, the complaints of clients, efficiency proposals of employees, the telephone and direct questionnaires of consumers. The Japanese call this process the «search of gold eggs» and they consider that it is necessary to not fine for the revealed spoilage and to award a prize, thus to stimulate a open process of revealing and elimination of lacks. Finally all this provides a high and constantly growing level of management and quality of production.

At ourselves in TRANSSYSTEM we try to create the automatically adjusting mechanism of "the constant changes directed on constant improvements». Earlier we were not quite in this occasion, because it is too trouble for the personnel. But subsequently we have found out, that this principle is basic in the TQM, we have firmly believed, that we move a correct policy. Thus we began to try to stake on the initiative of the personnel more. We have introduced the principles of the organization of work of focuses - groups (the Japanese «circles of quality») where the problems of the company and its divisions are openly discussed, and where there are developed the measures of their decision. The results of technological audits, telephone interrogations of clients, the rationalization proposal of employees are discussed in focuses-groups.

The technological conveyor on the organization of process of detection and elimination of lacks is necessary. The work in it should conduct quietly, methodically, without superfluous excitements and emotions. The nervous cells should be protected, and differently the process of “constant improvements” can turn to process of "constant stresses”. The time has passed while we up to the end have realized this simple true.

Alignment on the client


Already in the beginning of realization of market reforms in Kazakhstan the individual businessmen began to introduce principles "of orientation on the clients". At the same time it is possible to approve that in the Kazakhstan business till now the “sovkovy”(Soviet) mentality dominates which is reduced to other principle: «do not want - do not take».

The most evident test of orientation on the clients of the companies is a reaction of its employees to incorrect behavior of the client, for example he insist on the performance of conditions, not stipulated by the contract, stating the discontent in the rough form etc. Here is necessary the maximal goodwill, the search of the reasonable compromise in the resolution of conflict. Other situation when we have made mistakes in definition of the price and we face to a choice to perform work at a loss or to put before the client a question on change of the contract, going thus with the client on the conflict. How here to act?

In shops of USA there is a principle, that if the buyer has brought the TV in some months after operation and he has told, that it does not like paints, the seller changes this TV. Thus, it is damaged to shop, and there is a probability, that the buyer can abuse the rights. At the same time the shop shows, as far as for its interests of the client are important, that positively influences its competitiveness. The shop wins strategically.

Certainly, there should be a certain limit, after which the personnel should not recede by way of protection of the interests of the company. But at the same time it is necessary a real desire to help the client to understand his problems, to enter his position, to make so, that the client would remain is pleased.

Your Majesty the Personnel


There are two extreme measures concerning workers and employers: the first approach «the owner is a nought, the workers are the all» and the second «the owner is the all, working class is a nought». Now in the CIS the second principle dominates and accepts the most boundless forms.

Frequently the proprietors not simply take away profit, but also the turnaround means then there are situations when the workers do not receive the salary some months. One may meet such cases less now. But even those from owners who in time pays the salary, holiday and various social deductions, they wrongly believe, that it is enough for normal work. First of all there should be a human respect to the personnel.

Two vectors operate in work with the personnel. The first vector means the subordination, the functional duties, the directives, the instructions, the control, the sanctions. The second vector includes the respect, the disclosing of the initiative and the creative opportunities of the workers, the motivation and the goodwill. The second vector at all does not contradict the first. It as on a bicycle where uniform pressure upon both pedals allows to develop the big speed. We do not divide opinion, that with our people from Soviet Union, it is possible to work only from a position of dictatorship. The positive is always more effective. In the work we reasonably try to combine the rigidity, the insistence to the personnel with its support and motivation.

The big attention in TRANSYSTEM is given to the principles of corporation. There is the Manifesto of the Company, the Credo of the employee, the standards of work, the training the personnel is conducted actively, the general meetings collective and the corporate actions will be carried out, the newspaper is issued, the internal site and the corporate stand are regularly updated.

The world famous founder and the owner of airtourist agency Mr. Hell Rozenblyu employs 7000 people in his company. He has named the book about company management «the Client goes the second». It means, that the first is the personnel. In the modern theory of management it is accepted to count, that the client is an overall objective of the company, and the personnel is its main value.

The supplier: choose, demand, respect


Forwarding business is a partner business, and we pay the big attention a choice of reliable partners, you see that the client finally does not interest on whose fault the goods stands idle, maybe fault of the subcontractor or ours.

At the same time for to create system of reliable partnership it is poorly successful to choose the partner and to demand from him the results of work, it is necessary to learn to respect him, to not suppose him incorrectness in relations with him. Frequently the shouts to suppliers are a consequence of mistakes in system of work, for example the mistakes in contracts. And who prevented to remove these mistakes at a stage of the conclusion of contracts? Actually rigidity in business is not the decibels of a voice, and a sequence of the actions directed on achievement of the purpose.

Step on the gas!


Classical situation: a dispute between the "strategist" who is standing up for development of the company, the investment, and "skinflint" who is the financial director speaking, that «the money is not present».

The top-managers, the founders should be able to make strategic decisions on development of the company, reasonably should be able to invest, to go the additional expenses. There is a proverb: «don’t afraid of the big charges, afraid of the small incomes».

Mr. Lee Yakkoka has told: «The main Thing in business is resoluteness», he has not told, that «the main thing in business is a thrift». For the automobile went it is necessary to step on the gas, otherwise if not to remove a foot from a brake it will stand on a place.

We put before ourselves the arrogant purposes and we try to achieve them.

Know how to brake


On the other hand, always it is possible to find the arguments proving all new and new additional expenses on fund of a payment, to improvement of operating conditions, to the modernization, to the advertising etc. Also this process can be infinite.

To work in conditions of absence of rigid system of budgeting is the same as to go on the automobile without brakes. It is possible eventually to take off for a ditch.

The person who speaks «the money is not present» should be in the company necessarily (it is desirable in a role of the financial director). Always there should be a dispute of "miser" with "strategists" who think by aggressive categories in way of expansion of business. And already in this dispute the true should be born.

Sys – te – ma – ti – ze !


There is a concept of «system management». It includes a strategic management, a routine planning, an organization, a management of the personnel, a quality management, a management of the finance, marketing, automation, safety and other subsystems. All this is formalized in a package of documents: a strategy of development, an organizational structure, the financial plan, the budget, a position about departments, the duty regulations, the work contracts, the technological procedures etc.

It is necessary to define precisely the responsibility and powers of the administrative board, an average control link and workers of the company. Everyone precisely should know, that he decides himself that it is necessary to coordinate with a higher management because that leaves from frameworks of his competence.

It is possible the main principles of system management to reduce simply to known Cycle of Demming: "Plan-Do-Check-Act". Under "Act" is understood the administrative decisions directed for a correction of lacks and a improvement of a situation.

It is necessary to not direct the basic time on «suppression of fires», and on creation of system of work. Sometimes it is necessary to hear, that there is no time for planning, but this same, that there is no time for construction of the base. How there may not be time for the most important? In this case the reason is not in absence of time, and it is in misunderstanding that is the main thing.

System management determines a necessity of creation of reasonable bureaucratic system for the company, and to not do without it. The theorists speak: «that you do – describe, that you describe - do», meaning, first of all it is a necessity of the precise and full description of procedures of works and their executions.

We have started to introduce the standards ISO 9002 in TRANSSYSTEM at the end of 1998, and in a beginning of 2000 we have received the International Certificate. And today we constantly improve this system, we supplement it with the principles of TQM, we try maximum to involve the personnel in this process.

The system management is inextricably related with concepts of the plan, the quality, the orientation on clients, the corporationisms, the responsibility, the professionalism, the initiative, the thrift, and we try to make these concepts cult at ourselves in the company. As a whole the level of development of system management in the company is far from an ideal, but we try to raise it constantly.

* * *The dialectic contradiction of the fifth and sixth principles once again proves that there is no universal recipe of success in business. The councils, the recommendations, the innovations are probable, but there is no panacea from inevitable problems arising during work. Finally the talent and the intuition are solved all, you see the true is concrete in this or that situation.