In many small and medium-sized businesses, logistics accounts for almost a third of total expenses. Activities such as packaging, storage, transportation, and product distribution are part of the logistics of a company and are vital to the functioning of your organization.
The calculation of the losses that this causes may vary from one company to another, since they depend on the distance traveled by the distributor, the means of transport used and whether the distribution is local or foreign, in addition to all the external factors that may influence the delivery of merchandise, such as traffic.
Many are unaware of the great impact that logistics management can have on the performance of other areas and on the contribution it has to the development of the general results of each company. For example, you don't achieve anything by increasing the number of your customers if you are not able to fulfill all those requests. In the end, you will end up losing all those consumers and have a bad reputation in the industry, which will affect your future business as well.
Developing and executing a plan to optimize the logistics of your business will be of great help on your path to success. Here is a list of tips that will be key to this goal:
1. Get organized
Contrary to what many entrepreneurs think, lowering logistics costs does not require large amounts of investment, what is needed is to improve the organization. Having good inventory control, organizing warehouses, and delivering the product to the customer in an efficient way in time and service favors the logistics processes.
2. "How much" is key
It is necessary to measure how many products are in the warehouse, the number of raw materials, how much is delivered, how long deliveries are made, and how long it takes to sell. By measuring that we begin to be aware of what the cost means, in this way we can start working on improvement and development plans.
3. Continuous
communication Being in constant communication with company personnel, clients, and suppliers will allow you to have a broad overview of what is failing in your SME. It facilitates the conditions that allow effective communication between each of the parties in the chain. If necessary, create an Intranet network to communicate with them and attend to problems immediately.
4. Observe the supply chain
It is important that you and your collaborators perfectly locate where the business is in the supply chain.
5. Use a guideline to negotiate
The operational decisions that your collaborators make should be guided by the general line that you set as a guideline to negotiate develop and promote relationships in the short, medium, and long term with both customers and suppliers. This will allow you to orient the results with your vision of the business.
6. Design of the supply chain
You must develop and be clear about the entire supply chain of your company, as well as each of the parts and members that comprise it. In turn, this will help you when creating your company's goals and defining your budget. You plan to go abroad, but are you capable of meeting the logistical demands that this implies?
7. Manage demand
Ensuring the availability of a product to the consumer requires your company to find the most appropriate balance between supply and demand. This process is achieved when it exists as an essential element within the planning of the different processes such as sales, production, and supply.
8. Distribution network
As in the previous point, your company will be affected if it produces 200 boxes a day when it can only distribute 100 in the same period. In these cases, you should invest in a truck and a driver, instead of buying more machinery. All levels must grow at the same time, if not, you will be left with extra merchandise in your stock that, surely, will be lost.
9. Operational processes
Opt for bulk purchase, this will allow you to have all the inputs that are needed to produce and deliver your products on time, in addition, it will help you save. The purchase of inputs, management of raw materials, and packaging material fall into this category.
10. Management indicators
Demand and level are fundamental indicators for your company to provide feedback on its processes and be able to respond more efficiently to consumer needs.
11. Visibility
Do not wait for a consumer to complain about the quality of a product, anticipate problems. It is essential to have a vision of what is happening with the products throughout the supply chain and to have online, accurate, and timely information related to both the physical characteristics and the logistics information.
Contact Assemco for all logistics and transport requirements in Melbourne or throughout Australia!
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