Logistics service providers can unlock growth and profits in a big way with certain adjustments and improvements to their core operations and approach. This goes far beyond simply negotiating better rates. It takes advanced planning and structuring operations in the most profit-friendly way for higher logistics profits.
Move away from traditional processes when/if they make sense and favour cost-saving mechanisms that spur more profits you can keep. Here are the ways a third party logistics provider can increase profit and efficiency.
Monitor Basic Performance Metrics
Basic KPIs include on-time delivery rates, order accuracy, stock management numbers, and customer satisfaction. Look to these and other performance metrics for suggestions on increasing profit and efficiency in logistics.
Take corrective action as issues arise. Monitor your KPIs regularly, ensuring no inefficiencies are being allowed to go on for months with no change.
Continually Evaluate Rising Costs
Expenses are always rising. Fuel, warehousing, depreciation, insurance, and taxes are just a start. Add in transportation, storage, and manpower, and there’s more.
Continually look at your costs and see how you can keep your logistics fast and reliable while reducing the amount of money you invest to maintain your supply chain.
Distribute Inventory in a Smart Way
A major motivator of logistics is order fulfillment. To get inventory in and out quickly, ensure you’re distributing inventory intelligently.
Set up warehouses in select spots around the region in which distribution is. This will also reduce transit times in a lot of ways.
You also have some options regarding where to set up your warehouses and order fulfillment centers. All of this will enable fast shipping for the end customer.
Use Effective Digital Logistics Software
High-quality digital logistics software can break down the complexities of logistics into simpler tasks and results that can be more carefully analyzed. Locate loads. Manage operations. Identify inefficiencies. Make adjustments. Repeat.
That’s the pattern you can rotate through repeatedly, constantly refining and improving supply chain management one move at a time.
Automate Certain Logistics Processes
A lot can be automated in logistics, from freight booking requests to setting up real-time inventory updates. More frequent shipment status updates and invoice generation can streamline certain operational elements.
Warehouse operations and inventory management can be automated to a degree, simultaneously providing more visibility across your network and helping you to see where improvements are possible.
Utilize GPS Tracking, RFID Tags, and More
To monitor where units are and how they are moving, there are multiple ways to monitor shipments in real-time. GPS tracking is perfect for international travel.
RFID tags are also extremely handy. Plugging this tracking into AI-integrated software, you can monitor shipments and automatically adjust course if problems arise without human intervention.
Have Clear Communication with Stakeholders
To increase efficiency in logistics, effective communication is a must. If messages are not delivered promptly, and stakeholders are not responding adequately, this slows operations.
Set up systems where fast communication and coordination are possible across multiple departments and with vendors and customers.
Find the Right Partners To Put With Your Business
The lifeblood of logistics can be tied to how well your partners perform. If all or a part of your logistics is outsourced or reliant upon a partner, ensure you select those partners right.
Consider if there’s a way to involve an additional partner or to replace some inefficiencies by switching to a new partner.
Especially in international logistics, getting the best rates and service can take some research and shopping around.
Use Collaborators’ Analytics for Further Information
In addition to your KPIs, ask your collaborators for their analytics to look into inventory levels.
Analyzing other companies’ data, you may discover opportunities to do things differently to navigate bottlenecks, areas of inefficiency, and more. It never hurts to ask a collaborator or partner for access to select data analytics.
Reduce Inefficiencies and Make More Profit
Target areas of operations that are inefficient. Work to change systems or structures to reduce manual errors. Work with carriers to negotiate better freight rates. Maximize shared resources wherever possible and use economies of scale to your advantage.
Look at any and everything you can to save a little more time and effort here and there because it all adds up.
Safety Is Essential for Logistics Providers
Don’t sacrifice safety and regulatory compliance for profit. Safety is essential. If personnel get hurt, aren’t properly trained, or industry standards are not followed, the damage can be catastrophic to the bottom line and render a supply chain valueless.
Regularly review procedures to ensure you’re adhering to all laws and regulations.
