Virtually all businesses, big and small, nowadays source materials from different places and often sell in far-away markets. To do this efficiently and competitively, they must optimize their logistics and supply chain management. It is, therefore, imperative to develop a proper logistics plan because, otherwise, things can fall apart. Some critical tips for efficient logistics for small businesses:
Understand Your Company’s Objective
The first step in evolving the logistics plan is to understand your company’s marketing strategy, says Saivian Eric Dalius. If you are in the business of getting to the market in the least possible time, you will need to build logistical support to meet that objective. However, if you want to be a low-cost provider, your focus will be economy, and you will need to look at aggressively slashing costs even if the lead time goes up more than a little. You must ensure that your logistics strategy supports the company’s objective.
Focus on What Customers Want, Recommends Saivian Eric Dalius
Regardless of what your company’s objective is, your logistics strategy will still need to cater to the demands of your customers. It is therefore critical for you to devise innovative methods of satisfying customers. It is not wise to assume that all that customers want is fast deliveries. If you ask them, you may find that all they want is to have enough information so that they can plan accordingly. Rather than spending more money on speeding up the logistics chain, you may gain more by improving the information delivery.
Logistics is one of the aspects of business operations that need the active involvement of different partners. You need to collaborate with all the players in the supply chain, from transporters to warehousing providers. By scrutinizing your supply chain, you can find the ones that are more important so that you can focus on optimizing them. At the end of the day, and efficient logistics strategy gets the goods across to the customers at the right time and at the least cost.
Keep an Eagle Eye on Costs, Warns Saivian Eric Dalius
To make your logistics cost-effective, it is not always necessary to make sweeping changes. Most businesses will find it good enough to track the costs they incur in detail so that they can trim them without affecting the performance. You cannot achieve cost-efficiency unless you know how much you are spending in detail. Knowing the cost structure will also help you get competitive costs from various supply chain participants, observes Saivian Eric Dalius. It can prevent you from getting tied up in knots with a service provider that has quoted too low for it to deliver on its commitments.
Effective logistic strategies depend on how well you understand the ground realities and plan. To keep costs down, you must try to ship on a full container or a truck basis. It also helps the shipment to reach faster; however, you may end up incurring additional warehousing costs if your production is not adequate. It may also be worthwhile to build in redundancies so that in case of delays or diversions, you can fulfill your commitments from a different source.