If you provide many different goods to consumers, it’s essential that you get your logistics strategy right. But how do you go about doing that if you’re new to the whole game? It’s difficult enough to get right when you’re just starting out. But if you’re a big business, it can be very challenging indeed. Here we’re going to investigate what some of the experts have to say to small businesses on winning the logistics game. Let’s get started.
Leverage Predicted Volumes To Reduce Costs
Often, if you’re just starting out, it’s difficult to find providers who will give you a service at a competitive price. Most providers want to know your volume in advance. But if you don’t have any volume history, working out a price for the year ahead can be difficult. Shawn Casemore is the founder of a logistics company. He’s spent his entire career managing teams across the logistics industry. What’s his advice to startups who want to win the logistics game? Use predictive pricing. Predictive pricing bases your logistics costs on the amount of business you think you’ll do in your first twelve months. If you get it right, you can negotiate significant discounts that would have been difficult to obtain otherwise. This tactic has helped many distributors, Casemore notes.
Manage Your Supply Chain
Companies need to make sure that their supply chains remain in operation consistently. But often, supply chain management is overlooked, and things go wrong. A van might break down and need a tow truck, for instance. Steve Murray, a logistics consultant, suggests firms spend time thinking about supply chain management. His advice is that all people involved in the supply chain come together periodically. That means having people from marketing, finance, communication, procurement and so on. Everybody on the team should have an understanding of their goals. In other words, the strategy needs to be unified. That means that team needs the proper tools to assess their performance. They require KPIs, worksheets, and reports to indicate their progress.
Logistics Should Be In The Service Of Your Company’s Main Goals
Kenneth Ackerman is a longtime logistics manager at several businesses in the US. He’s noticed that companies can often get into trouble with their logistics when the don’t tailor their services to their goals. He says that if your firm’s strategy is to be the lowest priced, it needs to find a low price distributor. If your company’s goal is to provide customers with the fastest service, then he says that they need to choose a distributor based on speed. If the company’s goal is to fulfill orders perfectly every time, then he says that they need to make a choice based on that. There’s no point, he says, in going with a supplier whose services aren’t aligned with the company goals.
Integrating logistics into an existing firm should be all about what the company wants to achieve in the future. If the company intends to merge with another company, then the choice of logistics firm should reflect that.
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