In business, you are always striving for improvement, and anything that increases profits boosts morale and streamlines workflow is a good thing. Logistics is a big part of the puzzle, and this is the part of your supply chain that deals with moving goods and services from beginning to end.
Does your supply chain have a few weak links? Various stages take your products from the point of origin to the point of consumption, and sometimes, some issues slow down the delivery of goods.
Are you looking for strategies to make improvements? How do you optimize logistics operations?
You can’t do everything with the same expertise, so you should concentrate on tasks where your skill set shines. A business owner needs to focus on their product line, drive sales to grow their business, and leave the logistics to the experts. A third party logistics provider can handle your fulfillment form storage, order processing, shipping and receiving. This frees up manpower for you to concentrate on your business.
This is how to optimize logistics operations. The key is to monitor and make corrections to serve your customers better, so implement these ideas and see your business thrive.
How to Optimize Logistics
Your goal in business is to be profitable but to make the best decisions, you must follow the 7 Rs.
You need to figure out what your customer wants. These products must also be right for your business regarding how you can manage them. Pick the right product for you and your customer.
Tracking your expenses and pricing is vital for making a profit. You can have great customers and a robust supply chain, but you are going backwards if no money is made.
Knowing how much inventory you should have is a balancing act because you don’t want to run out of supplies but don’t want to sit on inventory. This also includes accurately shipping the right amount of product to the customer.
How fast you deliver to your customer will dictate their overall satisfaction, and you need to be able to track it accurately.
Nothing is worse than an incorrect delivery. It delays the receipt of goods to the customer and costs you money for extra shipping.
You want all your goods to be in perfect condition when the customer receives them, which requires consistency in warehousing, packaging and delivery.
You need to know your target audience to sell the right products to them. Your supply chain must also be set up for the right market.
Having these 7 Rs in sync will save time and money, making your logistics run smoothly.
Define Your Logistics Goals
When you understand your business goals, you can structure your optimization around them. You may want to:
- Grow your business
- Reduce operating costs
- Exceed customer needs
- Anticipate future ordering
Depending on your priorities, you should focus on a particular part of your logistical setup, so define your goals and implement your logistical strategies.
Leverage Pool Distribution
It can be difficult to deliver your products to customers promptly, especially if you have a national presence and beyond. It is also costly and can price you out of the market. The solution? Pool distribution.
This is a way of consolidating multiple shipments within a certain region by using a single shipper to deliver your and other orders in a single truck. You send your products to one distribution centre in a particular region, and then when an order comes in, they deliver them alongside other company products going to the same general area.
The benefits include lower handling costs, better efficiency and reduced lead times.
Measuring a company’s success is vital for growth and profit, and you need to be able to decipher all the data from the logistics industry. Key performance indicators (KPIs) are tools to measure performance using a variety of metrics and include:
- Picking accuracy
- On-time delivery
- Average time delivery
- Perfect order rate
By analyzing this data, you can see different problem areas of the supply chain and work on improving the performance. It is also a way to compare performance against industry benchmarks.
Implement Customer Feedback
It’s hard to improve your logistics without constructive feedback. You need to hear from the customer and use their information to better serve them in the future by implementing surveys, feedback forms, reviews, ratings, testimonials, complaints and suggestions. Having a client care representative and online support is also vital.
Every interaction you have with your customers is a way to improve their experience and build better relationships, and this will help you understand their journey, drive customer loyalty and reduce costs overall.