11 Tips To Improve The Logistics Of Your Business

The storage, packaging, and transportation are key to your business. Follow these tips to be more efficient.

In any small and medium-sized company, 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 for the functioning of your organisation.

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 external factors that may Influence the delivery of the goods, 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 that it has on the development of the overall results of each company. For example, you do not achieve anything by increasing the number of your customers if you are not able to fulfill all those orders. In the end, you will end up losing all those consumers and you will have a bad reputation in the sector, which will also affect your future business.

If SMEs pay more attention to logistics, they could improve their processes up to 12 or 15 percent. Who understands how you can make the part of your distribution, affordable storage cost or transportation in a company profitable, has a greater probability of surviving compared to the rest of your competitors.

Developing and executing a plan to optimise the logistics of your business will be of great help for your path to success. Below we give you a list of tips that will be key to this goal:

1. Organise

Contrary to what many entrepreneurs think, lower logistics costs does not require large amounts of investment, what is needed is to improve the organisation. Having a good control of inventories, organising warehouses and bringing the product to the customer in an efficient way in time and service favors the logistic processes.

2. The "How Much" Is Key

It is necessary to measure how many products are held 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 the company's staff, 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 address problems at the moment.

4. Observe The Supply Chain

It is important that you and your collaborators perfectly locate in which link of the supply chain the business is located.

5. Use A Guideline To Negotiate

The operative decisions that your collaborators take should be guided by the general line that you mark as a guideline to negotiate, develop and foster relationships in the short, medium and long-term with both clients and suppliers. This will allow you to guide the results with your business vision.

6. Design Of The Supply Chain

You must develop and have clear all the supply chain of your company, as well as each of the parties and members that comprise it. In turn, this will help you when it comes to creating your company's goals and defining your budget. You plan to go abroad, but are you trained to comply with the logistical demands that implies?

7. Manage The Demand

Guaranteeing the availability of a product to the consumer requires that your company look for the most appropriate balance between supply and demand. This process is achieved when it exists as an essential element in the planning of different processes such as sales, production and supply.

8. Distribution Network

Like the previous point, your company will be affected if it produces 200 boxes a day when it can only distribute 100 in that same period. In these cases you should invest in a truck and a driver, instead of buying more machinery. All the levels must be growing at par, otherwise you will be left with extra merchandise in your stock that will surely be lost.

9. Operational Processes

Opting for the massive purchase, that will allow you to have all the supplies you need to develop and deliver your products in due time, in addition, it will help you save. The purchase of supplies, administration of raw materials and packaging material fall into this category.

10. Indicators Of Management

Demand and level are fundamental indicators for your company to provide feedback to its processes and be able to respond more efficiently to the needs of the consumer.

11. Visibility

Do not wait for a consumer to complain about the quality of a product, anticipate the problems. It is essential to have a vision of what happens with the products along the supply chain and have online, accurate and timely information related to both physical characteristics and logistics information.

Logistics And Supply Chain

In the following article, we will discuss the logistics and supply chain, as well as the functions and objectives of this activity.

We define logistics as a business activity whose main objective is the planning and management of all operations that are directly related to the flow of raw materials, semi-finished products, and finished products, from their origin to the final consumer.

The logistics and activities play a key role in managing the activities of storage and transport, as these serve as liaisons between production centers and markets that are separated by time and distance.

Within the supply chain, logistics is used for the planning, management and control of the Affordable Storage Cost of goods, as well as the necessary services and the flow of information generated, which goes from the point of origin of the product to the point of consumption, and whose objective is to cover the demand of consumers.

Logistics And Supply Chain Functions

In the logistics process, we find a series of stages that happen in the chain and that depend as much on the nature of the product itself as on the main activity of the companies, that is, commercial, industrial or services. As a general rule, two channels are used so that the product can reach the final consumer:

1. Provisioning channel: in this channel, the products are transferred from the extraction center to the distribution or factory warehouse.
2. Distribution channel: when the product is moved from the warehouse or factory to the point of sale.

Functions Of Logistics In Industrial Companies

In industrial companies, the logistics functions are divided into 4 groups.

Provisioning

The provisioning function consists of supplying the production centers with the raw materials, elements or pieces that best respond to the rhythm and volume of production, guaranteeing the minimum cost.

Production

It involves organising all the means of production: physical (factories and machinery), human (adequate and efficient personnel) and processing or processing activities (packaging, handling, and storage).

Commercial Distribution

It is the coordination between the means of transport and the warehouse. Within the warehouse, logistics activities are focused on studying the optimal location of the premises, the distribution of spaces, the placement of products in the right place, the management of stocks, etc. When transport logistics is applied, the criteria for selecting the means and optimising the routes are established.

Services Post-Sale

The logistics activities in terms of after-sales service are focused on the management of orders and returns, studying the needs of the customer, in establishing the after-sales services of durable products, etc.

Functions Of Logistics In Commercial Companies

The logistic functions in commercial companies are, basically, of distribution and provisioning. The activities related to the flow of goods (storage and transport) depend on factors such as objectives established for each section or area of the company, organisation, and size of the company itself, etc.

Logistics Functions In Service Companies

The supplies that the service companies need are the goods that they acquire to carry out the activity they carry out and how they are used; generally, they are not stored.

For example, in hotels and restaurants, the supplies they purchase are for daily consumption (food, beverages...) or for use (clothes, crockery, glassware...) and the quantities they store are minimal, to cover unforeseen events.

Objectives Of Logistics

As the main objective, logistics seeks to satisfy the demand for the best conditions of services, quality, and cost.

Guarantee, on the one hand, the quality of the product and/or service, which will provide a competitive advantage and cost reduction, which will increase the company's profit. For this reason, logistics is responsible for managing the necessary means (premises, means of transport, computer management programs...) and mobilise the most appropriate human and financial resources.

The objectives that are achieved with good logistics planning are:

1. Acquire the materials in the most suitable conditions, in this way we avoid carrying out unpacking, preparation and subsequent adaptation operations.
2. Reduce transportation costs, by grouping loads and minimising stages and distances along the route.
3. Reduce the handling costs, trying to change the merchandise to bind the least number of times.
4. Reduce the stock classification groups, as well as minimise the volume, space and number of storage areas.
5. Reduce the number of revisions and inventory control, making the necessary and as easy and comfortable as possible.

In the following logistics and supply chain article, we will discuss the concept of reverse logistics and cross-docking.