Logistics is crucial to every business out there and a company that gets the logistics wrong and runs an inefficient supply chain will earn less profits than their competitors. Poor resource management usually means that the final product is inferior compared with their rivals.
As this article published by the Harvard Business Review points out, companies should explain where they get their supplies from and should also stick to rigid standards. The best way of achieving this is by having solid logistics. Otherwise, they may end up losing the trust of their customers and orders.
Additionally, a business that doesn’t have a practical and robust logistical process will come to discover that it is hard to compete on prices. Inefficiencies in the chains of supply and delivery will lead to overheads that are higher than necessary and also lead to lost productivity.
For instance, a business that has poor control of their stock levels and movements will be forced to pay for more warehouse space than what is needed.
Run a flexible business fleet
When transporting goods, it is wise that companies fill the cube or vehicle completely. Failing to do this costs businesses millions and is very bad for the planet. When your vans and trucks 3/4 full, you will end up hiring more vehicles than what you need.
If you find that your products do not fill your vans, then it is time to downsize. In order to avoid this, hire the right type of van driver. It may also be a good idea to invest in a range of different sizes of vehicles as it will enable you to have more flexibility in how you transport your goods and stock.
With a diverse fleet, you can use a smaller trailer when the orders cannot fill a larger van. This is good for your business as it is usually cheaper to run. This approach is not ideal for all firms and it is good that you research and see if diversifying your fleet is beneficial to your company or not.
Take advantage of new technology
To be efficient like your competitors, you need to keep pace with them and get ahead of them if possible. One of the best ways of doing this is by taking advantage of new technology. Automating the movement of goods through a warehouse needs a big upfront investment.
Over time, this kind of equipment will more than pay for itself. Automation prevents human error and speeds up the pace at which products can be moved from one point to another. It may also allow you to have a lower insurance for your collection of vehicles.
Constantly review your processes
When it comes to logistics, it is important that you review and measure your processes on a regular basis. Reviewing and measuring how efficient each step will help you monitor costs and to find and deal with weaknesses in your systems and processes.
Planning ahead is also very important. You need to be ready for seasonal changes in supply and demand or for promotions. However, you need to come up with outline plans that will guide you when there are unexpected fluctuations in workload.
It is also good to know the place where you will find additional kit and vehicles in case a new product line flies off the shelves suddenly. This will enable you to act fast enough and take advantage of that business opportunity.
Logistics is very important. Those firms that get their logistics right expand, keep pace with their competitors or even outdo them and earn more profits from their products or services.