What are the most effective cost-saving opportunities for logistics management?

Improving efficiency is an indirect cost savings which are often underestimated. Target to reduce or totally prevent occurring demurrage and detention charges, by sharpening on end to end planning and working with a reliable freight forwarder. The cheapest line haul rates might not bring you the best solution with the lowest spend.

You can easily reduce transportation costs with proactivity, anticipation and preparation. Using slower transport methods such as sea freight consolidations and road freight groupage services can lower the transport cost over faster services such as air freight or courier services. In logistics time is literally money - if you have the time you can save money. Planning is everything - ensure you have anticipated all the requirements to get the shipment to the right place at the right time for the right cost. Thoroughly checking details such as licencing, documentation, incoterms and packing requirements can help ensure there are no unforeseen events which could cause delays.

One question to ask is where is the end goal of this shipment / item. By asking this question you can strategize the shipping from the point of origin with the end in mind and have the shipment deliver with the least cost possible. For example ask: is this delivering to a business that has multiple locations? if yes is there a closer location to the point of origin than I currently use? if yes, even if ocean transportation will increase, trucking and intermodal will decrease significantly. Another example, if you ship direct to consumer compare shipping to the US West Coast for the ocean freight and having next day air to consumer in the East Coast to deliver within 2 days.

Many of us find that we are negotiating freight, handling, financing costs etc for millions or billions of units. Don’t get carried away by this. One of my first lessons to any new team member is the aggregate effect of decisions. If you are negotiating for 1000000 units every penny is £10000. Therefore you might want negotiate to 0.1 or 0.01 of a penny per unit. Don’t be embarrassed especially if dealing with the east. It could mean the cost of an extra member of staff let’s put it that way. If the sales guy tries to embarrass you just spin it round and buy the beer 😊.

Making sure you are setting specific KPI's within reducing costs is just as important. Freight as a percentage of revenue, cost per package, understanding your current time in transit are just a few. Use historical data to set a baseline, then track each month to understand your progression over time.

Taking action to minimize expense is a primary focus for business operations. Management and logistics play a big role in the supply chain, and with the right strategies in place, companies can successfully improve efficiencies resulting in lower operating costs. 1. Maintain visibility of your supply chain 2. Ensure quality project management 3. Optimizing transportation with technology 4. Consolidate purchases 5. Streamline warehouse processes 6. Work with trusted suppliers

When executed proficiently, inventory management plays a pivotal role in enhancing a company's customer service (CS) levels, OTIF (On-Time In-Full). Inventory is a direct result of CS and working capital goals. Optimized inventory management has financial ramifications, as it directly impacts the working capital of a business. Overstocked inventories tie up cash, while understocked scenarios can result in missed sales opportunities. By aligning inventory strategies with working capital goals, businesses can strike a balance, ensuring liquidity and financial flexibility while meeting or exceeding customer expectations. This balance is essential for maintaining competitive agility, sustaining growth, and achieving long-term success.

A few tips for inventory management metrics. 1) If cash flow is an issue, do not stock just to bring the shipping cost down. Your business will lose out from a lack of capital more than it will from thinner profits (in the short term). 2) Create a timeline for how long it is acceptable to carry inventory, after that, liquidate so you have the funds to purchase "going" items instead. 3) To properly forecast reordering, run these 3 reports: A) sales for last 60 days=establishes current trend. B) sales YTD vs last year to date = establishes overall market trend. C) sales per item YTD vs last year to date= establishes individual item trend and projection. Running these report will also help to include seasonality in your forecast.

Extended Warehouse System EWS is one of the best tool for cost efficient operation. It’s enables the fast tracking and accessibility of stocks within warehouse and also manages the optimum stocks levels of various SKUs. It not only make the operation easy and fast rather swift processes of all deliveries.

Optimization of inventory management using methods or approaches that suits the unique needs of your system is always an effective approach to ensuring cost management. System or process integration can also help keep costs low and systems/ processes more effective.

Nowadays we talk about management 4.0 and the technological initiatives involved in this process. These are clear and obvious factors for competitive advantage. However, I think that companies that place the customer at the center of the business, the so-called "customer-centric" and act in such a way that the customer is the center of the decision-making process, and use all the means at their disposal to serve them, can effectively through its internal processes, create the necessary structure to bring alternatives and intelligent solutions that will really be effective in improving CS , meeting an already perceived and existing demand instead of just working on continuous improvement without proper assertiveness.

Think about acceptable timelines for delivery to factor in different modes of transportation to satisfy your customers expectations. A custom furniture manufacturer might face a 2 month order to deliver timeline and will have to work with their overseas counterparts to meet the cut off of +45 days before deadline to factor in ocean freight. A electronic manufacturer on the other hand deals with a 2 day order to deliver timeline and has to ensure they are properly stocked in strategic locations to be able to reach all of their consumers with enough time to spare. See what your industry has set as a norm and structure your logistics process around that.

The quickest way to enhance customer service is logistics is to improve communication. As anyone in logistics knows the flow of information both up and downstream is just as important as the movement of physical goods - one quickly affects the other. An efficient flow of information can lead to an efficient movement of goods. Utilise electronic communication methods as much as possible - documents can be sent instantly via systems such as EDI (electronic document interface) and can enable customs procedures to start before the physical goods have even left the origin country. Most shipping companies have tracking facilities check for web/app tracking and actively monitor important shipments so you can action any issues as they arise.

Enhancing customer service without increasing the workloads of your employees is where true savings lie. The best way to do this is to review your processes and remove waste. Remove time spent monitoring KPIs that don't impact your customers or bottom line. Fix zombie processes that have grown out of control as bandaid upon bandaid was placed into the process for each mistake that anyone ever made. Additionally, this where you can leverage technology. Find ways to get exceptions to your team using the technology, so they can spend their time and expertise solving problems, not looking for them.

Un ejemplo que he visto es la implementación de software de gestión de pedidos y EDI para automatizar y agilizar el proceso, lo que mejora la precisión y rapidez en la entrega. Además, proporcionar sistemas de seguimiento y notificaciones de entrega ha incrementado la transparencia y satisfacción del cliente significativamente.

I think that the quality of the service performed versus operational costs must be taken into consideration, especially understanding the demand involved and the needs of the end customer. If your pricing is appropriate to the demand served, it will help in the decision through the options available to choose the best mode and service.

The principles are Fine - but in aerospace the timelines to be applied are often necessarily much longer. Example - low turnover long lead time parts that are critical to availability and/or safety - pose a special challenge.

Most effective ways : Optimize your inventory. Keeping your inventory optimized deems to be a beneficial option when planning for cost savings. ... Automate logistics and warehouse processes. ... Optimize last-mile delivery. ... Assemble in-house delivery teams. ... Improve customer satisfaction.

Information delays are frequent in logistics, but embracing real-time communication can significantly reduce costs. Therefore, integrating efficient logistics practices with seamless teamwork and communication is important for achieving supply chain success.

Logistics (warehousing and distribution) is a fixed cost activity. No matter what automation, technology or processes are in place, at some point there is a floor in terms of the base operating costs. Understand what you are asking (in terms of time, activity and resources) from your provider or your internal teams and assets. Focusing on this capacity gives you the opportunity to ensure you are making the most of every investment you make.