Logistics is central to any business or service. The level of efficiency can either help build your business or bring in a standstill. Whether a start-up or a big organisation, it is equally important that all types of businesses have a well-charted and strategized logistic management system. Indeed it is a complex affair to deal with because of the various factors that contribute to its effectiveness and efficiency such as fuel price, trade laws, fleet management, manpower, warehouse facility, technology, energy consumption and the like. Thus, it requires considerable planning and close monitoring of the logistics wing of your business. Here are eight ways to amp up your logistics structure.
- Route optimisation â€“ Route optimisation can be considered as one of the basic ways to increase the efficiency of your logistics structure. It results in strategically using your fleet to ply to various locations without having any of your vehicles to ply empty or half-loaded. It cuts fuel cost and is an energy efficient method to incorporate in the logistics structure.
- Efficient warehouses â€“ Warehouses are an important component of logistics web. It incurs cost in the form of rent or lease, security, manpower and maintenance, and power supply. If warehouses run on renewable sources of energy such as solar energy for purposes of lighting and temperature control, it could save a lot on your electricity bill. At the same time, a well-labelled and categorised warehouse to store various products in specified racks with dedicated manpower for each category can reduce the sorting time during delivery.
- Multi-modal logistics â€“ Often logistics is a combination of multi-modal transport system i.e. surface, air, and water, and has different rates attached to it. For example, rail is more cost-effective than trucking or air. So, it is advisable to get quotes from all three types of modes and choose accordingly. This may be a huge cost-cutting and time-saving fragment for your logistics structure.
- Consolidate shipment- If you have multiple suppliers in one region, then try to consolidate their goods into one shipment. Also, if you have less than or half container load to be sent out then try to find a similar shipment with whom you can partner and make it a full container load. This type of consolidation becomes more cost-effective and fuel-efficient too.
- Keep customers informed â€“ To enhance customer reliability for your logistics structure, it is important to keep them informed of the actual freight cost, service cost, delivery time, mode of tracking, and mode of shipment. Customers appreciate transparency and will appreciate you for helping them choose the appropriate service that will meet their need.
- Build a functional network â€“ Logistics structure is a combination of partners, franchisees, transportation and service centres. And for a total efficiency of the logistics structure, each component has to work in a synchronised manner. A breakdown in one of the components may disrupt the entire network. Thus, building a well-functioning network becomes a prerequisite for the progress of a logistics structure.
- Reduce cycle time by automating processes â€“ Implementation of technology for automated processing of documents, inventory checks etc. will reduce the cycle time associated with the various tasks that need to be performed prior to a shipment. It aids in error-free document preparation and automatic checks for all needed trade compliances resulting in on-time delivery, increased customer satisfaction, correct inventory count and avoidance of any legal hassles.
- Understand the true costs of trading, and transit times â€“ It is wise to calculate the true cost of the entire consignment by considering variables such as freight charge, duty, brokerage, and cost variability during transit times. These variables will be helpful to understand whether you should look at domestic or local trading or get involved in overseas or inter-city logistics. For example: if you are a florist in India, then sourcing lilies from Indian growers, in the long run, will be more cost effective than sourcing from Europe. This will cut transportation cost, overseas taxes, save time, resulting in overall cost and speed efficiency of your logistics structure.
These were mentions of broad approaches that can improve your logistics structure. Working on each of the components and its sub-components will result in an overhaul of the logistics structure making it better and more efficient.