Keys to reduce logistics costs

In the world of logistics it is increasingly important to reduce costs and to be at the forefront of prices. Companies dive in a demanding and competitive market, oriented to increasingly specialized and segmented users and consumers who, of course, demand the best offers and are more critical to the solvency and quality of their purchase, not only attending to the satisfaction around to the product, but to the conditions of service, distribution and customer service. In this article we will see how it is possible to reduce costs of the transport processes without they lose efficiency. For this, the technological factor is decisive, because the technology is a fundamental piece to optimize the procedures in the matter of logistics. In this sense, it is essential to look for an fba freight forwarder that has not only the necessary infrastructure, but also the capacity to offer solutions that are aligned with the competitiveness of the business.

A study titled Logistics Costs and Service and made by Establish a consulting firm specializing in Spanish-American logistics, the logistical cost of the products can represent between 20 or 30% of the total cost of the merchandise. The basic point of the most common mistakes around product chain design and logistics organization is that many companies do not give it due importance, forgetting that a failure at any stage of the process can exponentially multiply losses and ruin a business model if not detected in time. Logistic operations are a very important part of strategic business decisions, which involve choosing the market well and developing efficient cost measurement indices. For this reason, the technology is a fundamental piece of optimization, and can be observed in very different examples such as the use of GPS: Thanks to them it is possible to have online visibility and traceability of both transport and parcels and, therefore , extract immediate information on the status of articles in both location and time, contributing to customer service satisfaction. If you want a personalized and complete training around the subject, opt for a comprehensive logistics course.

Five factors for logistics efficiency

So, there are five keys that can help reduce logistics costs for your company:

  1. Formation of strategic alliances: This phenomenon has been called creation of clusters, which are group of interrelated companies that work in the same industrial sector and that collaborate strategically to obtain common benefits. These alliances allow to take advantage of the transport when they send their merchandise towards the same geographical points, which maximizes the space and allows the companies to share expenses.
  2. Traceability. The definition of this term refers to the series of procedures that allow following the process of evolution of a product in each one of its stages. In our evolved, globalized and co-modified society there is a growing need to control the enormous volume of information about services and products. In the logistic field, the product information that indicates all the history that has been circulating is a demand demanded by the consumer, due both to legal aspects and to those companies that seek to offer their customers an added value. Firstly, in legal terms, the logistics of food and pharmaceutical products requires the consumer to obtain information from these products taken to the limit of the trace, to avoid the disastrous consequences that can lead to health products intake in bad state. The tendency of distribution companies is to offer their customers the possibility of knowing where their product is in real time.
  3. Harnessing mobile technologies. The benefits of adopting technological applications and tools especially oriented to tablets and Smartphone’s are becoming more noticeable and diverse. This type of technology allows obtaining all the information that the operator needs, which results in the improvement of productivity and the reduction of operating and personnel costs. Among others, it emphasizes the technology of voice picking, which basically consists of transforming text instructions to spoken instructions. This technique can be used bidirectional, through instructions that send a computational program to a human operator and vice versa, they return the processing of the spoken response of the operator. Voice picking allows to improve the ordering times in the distribution centers because the preparer in most cases does not need a bar code reader to know how many products he has to carry for a particular order, but the instructions they arrive to him in an audio note form by means of a auricular, which allows it to operate hands-free and, therefore, also have greater freedom of movement. Statistics indicate that this technology has a direct and immediate impact on the increase of the productivity of the workers, between 15% and 30%.
  4. E-commerce: Internet has changed everything, from the way to conceive business models, to the design of brand strategies through content marketing or measurement through web analytics, through the creation of user communities which generate opinion, debate and feedback, adding value to the products. An outstanding case that we all know is the rise of e-commerce or e-commerce, which breaks down barriers and allows each company to become known in the local and international market, so it is often alluded to the global concept (globalized + local) Therefore, inthe logistic field is many companies dedicated to the parcels and distribution that provide an added value of traceability of its products to the customers through this methodology. Cost reduction is one of the main benefits that both supplier and company can obtain via e-commerce. For a band, the customer has access to a much broader spectrum of products and a complete price comparison on the network. In this context, intermediate costs and final prices are cheaper and more competitive, since the ability of suppliers to compete in an online market increases, leading to increased competition, and improved quality and variety of products and services.
  5. Use of advanced cost reduction techniques such as Lean Management. This strategy focuses on reducing all tasks that do not add value to the user, thus eliminating waste and therefore, expense. In the world of logistics management it is important to adopt the Llean culture with regard to the continuous improvement of jobs, the introduction of zero defect techniques or the design of automatic subsystems.

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