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.

Warehouse: Functions, Activities, Planning, And Location

Warehouses can define as the place or building for storing a large number of goods or materials. For understanding the warehouse system, you need to understand the essential aspects such as warehouse functions, existing types, their planning, as well as the location.

Functions and Activities of the Warehouse

The warehouses are centers that are structured and planned to carry out storage functions such as conservation, control, and expedition of goods and products, reception, custody, etc. The warehouse is in charge of regulating the flow of stocks.

The activities and main functions carried out in warehouses:

Stock Receiving

It is the process that consists of entering the goods that the suppliers send. During this process, it should verify that the stock received coincides with the information contained in the delivery notes. It is also necessary to check during receipt of the goods whether the quantities, quality or characteristics correspond to the order.

Storage

It consists of the location of the goods in the ideal areas for it, with the aim of accessing them, and that is easily locatable. For this, fixed means are used, such as industrial mechanical shelves, warehouses, facilities, supports, etc. and internal factors of transport such as forklifts, elevators or conveyor belts.

Conservation and Maintenance

During the time that the stock stored, it must be kept in perfect condition. The conservation of the merchandise implies the application of the current legislation in terms of hygiene and safety in the warehouse, in addition to the special rules on maintenance and care of each product.

Management and Control of Existence

One of the critical function is to determine the amount of each product that must be stored, calculates the amount and frequency with which each order will request to minimise storage costs.

Shipment of Goods

The delivery of goods begins when the customer places the order, starting the process with the selection of merchandise and packaging, as well as the choice of means of transport. Other operations are also carried out in the commercial distribution warehouses, such as merchandise consolidation, shipping division and cargo combination.

Classification of Warehouses

Warehouses can be classified according to different criteria:

According To the Structure or Under Construction

•    Open-air warehouses

•    Covered warehouses

According To the Activity of the Company

•    Commercial company: a warehouse of merchandise and some cases of containers and packaging.

•    Industrial company: a warehouse of raw and auxiliary materials, a warehouse of diverse materials and warehouse of finished products.

According To the Logistic Function

•    Logistic platforms or central warehouses

•    Transit or consolidation warehouses

•    Regional or zone stores and stores

According To The Degree Of Automation

•    Conventions stores

•    Automated warehouses

•    Automatic warehouses

According To Ownership Or Ownership

•    Warehouses owned

•    Warehouses for rent

•    Warehouses under leasing

Planning and Location of Warehouses

The companies that are looking for the best UK warehousing and storage to store their inventory, must take the decision whether they will be owned, rented or both.

Once the first step has been completed, the second step is to plan the location, distribution, and design of the spaces, the equipment of the facilities, as well as the mechanical means and human resources for the handling and storage of the goods.

Optimal planning of warehouse operation involves the management of available resources and forecasting requirements for the products when, how much they are and where they are required.

•    When: at the time that is needed, or we receive the order from the production center, the distribution center or the point of sale.

•    How much: the amount requested by internal or external customers.

•    Where: the place of delivery required by customers.

Conclusion 

For a company that manufactures the product, the warehouse is a fundamental part of a successful organisation. Therefore, it is necessary to take into account a series of variables when planning the project of a warehouse:

•    The manufacturing capacity of the industry.

•    The characteristics of the distribution network.

•    The cost of land, buildings, facilities, and equipment.

•    The product: the types, features, the total amount to be stored.

Types Of Storage

As important as having a good product is knowing how and where to store it in the best way so that it retains its characteristics and has greater reach in the value chain. Decipher together the types of storage and which are the most convenient for your business.
From the moment that trade appeared, the law of supply and demand made it necessary to have a stock (merchandise stored) sufficient to meet the volumes of the commercial dynamics. This is how the greater amount of a product is sold, the greater must be the stock that supports it. Today everything is susceptible to be stored, from obvious things such as food or raw materials to intangible things such as information or air, without forgetting less conventional "products" such as biological ones: blood, organs or even sperm.
There is a great variety of warehouses and there are many factors to take into account when deciding which of these will be the appropriate option. It is not the same store food as sports equipment, beauty products or vehicles. If we are more strict and exact, there are different characteristics and management recommendations for each "family" of products; For example, foods could be classified into subgroups taking into account their perishable qualities: canned, dry grains, meat or fresh vegetables, just to mention a few.
Below you will find a practical guide to the types of storage and what to take into account when storing merchandise: how to do it, advantages and disadvantages and when it is advisable or not.

Types Of Storage

Taking into account the product and its characteristics, we can determine the degree of environmental protection it requires, whether in a controlled, covered or discovered enclosure.

Covered Storage

It is the one that offers the greatest protection to the elements and materials stored there since it is possible to control various variables such as humidity, temperature, lighting and many others that directly influence the preservation and useful life of the products. There are brick, cement, specialized canvas, metal panels and even materials that help to preserve the temperature, such as resins.

Uncovered Storage

As its name indicates, they are those that are outdoors and without any special control outside the security, because there are stored products that by their nature are not highly affected by climatic or environmental conditions: automobiles, some construction materials and as a general rule, non-perishable products. Generally, these deposits are demarcated with reflective tapes and delimited by fences, fences, fences, and canvas, located outdoors. In some cases, additional protection is usually used directly on the packaging of the products, such as plastics, special tarpaulins and any element of anticorrosive properties.
Another important factor when choosing the most suitable type of warehouse is the kind of material to be stored, determining the nature of the product and its role in the production process.

Storage Of Raw Materials

It is the primary storage within the production chain and is usually located as close as possible to the production plant or transformation site.

Storage Of Intermediate Products

Also called semi-finished, is where those elements that have already undergone a process of assembly or manufacturing but are still in an intermediate stage of it, serving as a link between the different phases of the production line. They must be located inside the factory since they handle very short waiting times for their use. They should always be available.

Storage Of Finished Products

It is the most common and the one that has more value for the company since it keeps the product of its economic activity. The amount of products stored there is directly proportional to the guidelines, projections of the company and demand of them by consumers; therefore, it must guarantee constant availability and high inventory turnover.

Storage Of Accessories

In this warehouse, all the elements that serve as auxiliary material are deposited in the manufacturing process of the main product or the accessories and other accessories that may be required.

Storage Of Spare Parts

This warehouse is designed to respond to the company's after-sales needs. It is there where all the necessary spare parts for the maintenance of the product are stored.

Storage Of Files

It is dedicated to the plans, records, sketches and other designs necessary for the manufacture of the products, besides keeping all the legal and accounting documents of the company, everything related to information. The costs of distributing the product also play an important role when defining or choosing a storage type. That is why we must take into account what is their role in the logistics of this process.

Storage Of Plant Or Home Matrix

It is the one that is closest to the production plant. Its objectives are to reduce transport and handling costs, be the holder of the main stock and distribute to regional warehouses.

Regional Storage

It is arranged by zones in strategic places to achieve the distribution of the product in less than a day. On average, the best warehousing solutions must have the technical capacity to receive merchandise from the production plants in large lorry, of large tonnage and, eventually, distributed to smaller stores, direct sales or retailers.

Platform Storage

It can basically fulfil regional storage functions but is smaller and its focus is to increase the level of customer service by decreasing the stock. The level of mechanization, handling techniques and equipment play a crucial role in the use that can be made of one or another warehouse, since not all the goods can be or should be stored with certain tools or mechanical equipment.

Block Storage

For this type of storage, the resistance of the goods to be stacked must be taken into account, since columns are formed by references. A coefficient of 1.5 must be applied in relation to the resistance of the base to guarantee the stability of the column. It is recommended for products that handle few references but many quantities, for example, buckets of milk, washing powder, bricks or building blocks, among others.

Conventional Storage

They are those in which it is counted on forklifts of the retractable mast for the storage of the merchandise, never surpassing a height of 8 meters in its highest point. The last of the decisive factors to choose the most suitable warehouse for your company has to do with the legal status of the place as such, since depending on the choice made will result in higher expenses or exemption from them.

Own Store

It is the most traditional of all but has been declining compared to other more profitable options in terms of exploitation of the property, since it implies making part of the business the physical complex and the land, assuming expenses that are not necessarily related to the economic activity of the company.

Warehouse and Renting

These two are the most used options because they do not need an initial investment and their costs vary in relation to the needs of the business. The renting for its part assumes maintenance services and contemplates longer periods of use.

Warehouse In Leasing

Leasing is another type of lease in which the property is rented to end up buying it at the end of the contract for a value that is stipulated by both parties at the time of signing.

Prepare The Packages For Shipment

A bad packaging can endanger the shipment of your goods or those of your company so it will be important to take into account a series of questions when it comes to know how to prepare the packaging of the packages for later shipment. Among them, we must assess and keep in mind what type of goods are going to be transported, as well as the fact that the merchandise could be exposed to vibrations, shocks or even a fall.

If improper packaging is carried out, damage to and deterioration of the goods, delays in delivery times and even the impossibility of making claims can occur. Therefore, we want to give you a series of recommendations or advice when preparing the packages for the shipment.

As for the outer packaging, quality and rigid materials must be chosen to withstand possible friction or shock. In addition, in the case of choosing a cardboard box, it must be robust, with good grammage, as well as use a new box, without losing its firmness and without deterioration that may facilitate its breakage. The size of the box must be according to the merchandise that is wanted to send, since the holes that remain empty will be more susceptible to deteriorate or bend, being able to damage the merchandise, in the event that the interior does not fill the box completely, there will be to fill with crumpled newspaper, foam, bubble paper or similar.

In the event that the goods are going to be palletised, it must also be ensured that it is correctly packed, avoiding that it protrudes from the dimensions of the pallet by the sides and ensuring it correctly. To do this, the entire set should be fixed with film from the base of the pallet, including the wooden pallet, to the top, and with hard plastic or metal strip. This will ensure that the load is adjusted, and we will reduce, to a large extent, the risk of deterioration during the handling of the goods. It is a more convenient service for transport and, above all, safer.

The internal packaging by the international freight forwarders in UK will also be important since it will act as a shock absorber for the load against shocks or sudden movements and will prevent the goods from being in direct contact with the outer packaging. The best thing to do is to fit the contents well into the packaging, a loose object is much more likely to be damaged than a properly fitted object. For this, you can use different materials that will protect the merchandise as:

• Foam sheets or polyethene chips.

• Bubble plastic.

• Moldable foam.

• Kraft paper.

• Inflatable packing

• Corner protectors in the case of furniture and other objects.

• Corrugated cardboard.

Transportation Of Goods

If you want to hire a freight transport service, you have several options at your fingertips, but depending on your specific needs and the type of merchandise, it will be more advisable to opt for one option or another. However, of all the possible alternatives, land transport of goods is the most used medium within the European Union, especially for its convenience, speed in short distance operations and its ability to offer door-to-door service.

Current Regulations To Carry Out Land Transport Operations

In order to carry out land transport activities of merchandise, it will be necessary for the freight forwarding solution providing companies that are going to carry them out to arrange and provide their workers with the corresponding administrative authorisation, which enables said activity. Therefore, the company that provides land transport services will have to provide each vehicle and driver with the corresponding transport cards.

Advantages Of Land Transport Of Goods

There are several aspects that differentiate land transport from the rest, since, as we have said, it is the most used modality in the European Union. These are the main advantages that this way provides:

• It is the only means of transport of goods that allows us to deliver the products "door to door"

• We can transport a lot of different types of loads

• It offers a great variety of schedules, frequencies in its services and a great facility in regard to the loading and unloading of merchandise

• We can coordinate it with other modes of loading, such as air or sea

• There are many types of vehicles that are used for land transportation of goods such as trucks, trailers, silo, etc.

3 + 1 Risks Of Land Transport Operations

If we are interested in contracting a land freight service, it is recommended that we take into account the most common dangers that this entails for the professionals dedicated to it:

• Physical fatigue: when dealing, generally, for very long distances, drivers can have problems related to fatigue. However, this should not happen, at least in heavy vehicles, since they have established the maximum number of hours they can perform per day.

• The body position: the second most common risk in land transport of goods is related to the position acquired by the driver, since, being long-haul journeys, if the position is not correct, it can pose severe problems of Health.

• Loading and unloading the goods: when loading and unloading the vehicle, we must bear in mind that carrying out overloads related to weight, exposing oneself to gases or dangerous substances... can put the driver in situations of risk.

• Robbery: this is another risk that usually occurs especially in service areas and when they are vehicles that have the canvas box, since access is much quicker and easier.

Any of these risks can happen in the event that we hire a land freight service. For this reason, if what we want to transport is of great value, we may find it convenient to inform ourselves about current cargo transport insurance, since we will avoid losses or damages in our products.

Digitisation In Land Transport Operations Of Goods

As is happening in most commercial sectors, logistics and transport is also undergoing changes in terms of digitisation and innovation of its services. Thus, with the application of new technologies, there are transport companies that have introduced an electronic bill of lading, called eCMR.

This innovation is already legally valid, and its differential value is based on the fact that it provides greater speed and, above all, security in the documentation of land transport of goods and, in addition, positively influences the costs that we will pay for this service, since it reduces considerably.

How To Choose A Logistics Service Provider?

If you do not select a logistics service provider well, you can waste the market because you do not have an efficient supply chain, from your suppliers to the production plants and from these to the markets where they are selling their articles.

Excess cost may be incurred for failure to deliver timely and in good condition; in addition to the risk of losing the merchandise due to not following up properly to avoid damages or not having the insurance of conventional cargo handling and other mechanisms that protect the capital. Likewise, traumatism are generated in the operation of the companies.

To avoid these disadvantages, the criteria to be taken into account when selecting a logistics service provider is very important:

1st: carry out an evaluation that helps to identify the characteristics of the current logistics process, such as service levels, technology and information systems, to better understand how the logistics operator will support business work.

2nd: identify the advantages and disadvantages of carrying out this outsourcing process, what risks are exposed and under what parameters you want to assume them or invest in action plans to mitigate them.

3rd: must take into account and evaluate in the most conscientious way possible what are the needs that are intended to be covered when starting a new employment relationship with an operator. Deciding what is required to contract and what should be required from the operator is what, will allow choosing the most suitable service provider for the company.

4th: It is also important that the logistics operator not only knows about his business, logistics and supply chain, but also that he cares about understanding the business of his clients and their particular characteristics and needs.

5th: Reputation is a fundamental criterion to determine if it is worth working with a specific logistics provider. During the presentation of your services, a supplier will present some favourable or unfavourable references for our company.

Finally, when hiring a logistics service provider, it must be borne in mind that this can and should be a long-term relationship, avoiding switching between them frequently due to multiple factors such as cost reduction, one of the main benefits of outsourcing, It can be affected as well as other processes such as the consolidation and development of the company.