Logistics is one of those essential business aspects where poor performance can result in a huge waste of profits. Establishing measurable value is critical to sustaining your growth. This can be difficult with rising costs on shipping, materials, and labor. Implementing a strategy of continual improvement helps to offset costs, while the ability to get the right product when and where it needs to be increases your value to consumers. Here are some approaches to ensuring that this is happening in your company.
Maintaining the right stock levels is important to reduce delays. Even when everything else is done well, out-of-stock notices or delayed shipments can ruin the customer experience. It’s essential to determine optimal stock levels that will help to avoid these situations. Lead times, order history, costs, production capacities, and any other factors that will affect availability will have to be calculated into determining the right stock levels to keep up with customer demand. Otherwise, you could be losing money by having to upgrade shipping methods, or you’re simply disappointing your customers.
Transportation costs are an important element in the bottom line for any company. Rising insurance, fluctuating fuel costs, and unpredictable road and weather conditions make delivery schedules and expenses difficult to forecast and a bit of a gamble from month to month.
It’s important to be able to regulate packing both boxes and trucks for the most effective weight-per-volume, and having metrics in place to capture and calculate this as quickly as possible. Monitoring fuel use and shipping times is also important to planning the best routes for efficient distribution. Costs can also be defrayed by using recycled or reclaimed materials for packaging products.
Efficient logistics requires constant communication between all the parties involved, including production, fulfillment, warehouse, accounting, and sales. It’s important that invoices or invoice changes are immediately made available so that everyone is working off the same order system. The success of the entire team may depend on providing accessible digital documentation, and sending emails or text alerts when things change. Sales will also need to be informed of any delays or escalated shipping costs so that they can better serve the customer’s current and future needs.
Logistics Management Software
Software that ties all this together within your company’s IT infrastructure is the best way to approach logistics. Formulas for determining packing lists and inventory management can be pre-programmed and automatically provided through interactive displays.
Inclusion of database capabilities also allows your logistics data to be capture to provide reports and support informed decision-making. Many products will integrate capabilities such as enterprise resource planning (ERP) and customer relationship management (CRM) information and tools. Budget may be a concern, but there are any number of software alternatives that can centralize and streamline all your logistics headaches.
Develop Your Team
One unavoidable part of achieving success is having the right people in place to implement your vision. Having warehouse personnel, forklift drivers, and truck drivers that can work effectively with minimal waste of time and goods, as well as maximum safety, should be a priority.
Sometimes it requires additional training or reminders on proper procedure, but adding technical solutions will require an additional set of skills such as new IT roles or training on new software. It might also require programmers or data scientists, depending on whether you purchase a system or intend to develop your own custom solution.
Logistics can be a complex process, whether you utilize you own trucks and drivers or a third-party shipping service. The key to successful logistics is tracking processes to constantly monitor cost and performance at every point in the supply chain. This will gradually bring about more productivity, lower costs, and happy customers.
Author: Kara Masterson is a freelance writer from West Jordan, Utah. She graduated from the University of Utah and enjoys writing and spending time with her dog, Max. If your business is expanding, Kara recommends looking into using fulfillment services to help you manage your growing inventory.