When done right, supply chain and logistics management can be a harmonious symphony of vendors, trucks and warehouses. All parts work together to ensure the product is delivered undamaged, on time and to the customer’s satisfaction.
On the other hand, an incoherent, poorly planned and ineffective supply chain can potentially deal a fatal blow to the average small and medium-sized business (SMB). Products lost in transit, sent to the wrong location and unexplained charges on customer receipts can all cause angst that’s strong enough to push customers to the competition.
The following logistics management tips are an essential read for SMB owners.
The principal purpose of logistics is to get merchandise from one location to another. However, beyond this basic goal, you must determine what your overarching business strategy is and define your logistics goals accordingly. Do you intend to offer the best delivery times in the market? Would you want to be the one that charges the least?
Whatever your target, there’ll be a price to pay. The key is striking the right balance. For example, if you want faster delivery times, you’ll likely need to spend above average on transportation. If you want to be the low-cost provider, you’ll have to identify non-core expenses to cut back on, even if this will come at the price of longer lead times.
Focus on Customers
No matter what you do, never lose sight of the customer. Even when pursuing cost controls, explore innovative ways of ensuring customer satisfaction. A recent survey found that less than half of respondents rated their ability to respond to customers as good or excellent. When it comes to logistics, customer communication is critical.
Develop mechanisms to keep customers in the loop when delivery is going according to plan and when it isn’t. In case a shipment is delayed, it’s better that they learn this from you than you learn about it from them via a complaint.
Always remember that the overwhelming majority of customers are fairly reasonable individuals and do understand that mishaps may happen. It’s the response to such mishaps that separates a mediocre service from an outstanding one.
Keep an eye on the pennies and the dollars. Logistics management is a means of getting products to your customers. It is thus a cost of doing business and you should always be on the lookout not to offer a delivery and distribution service at below cost.
Break down your logistics process and have a clear view of what each element costs you. With this knowledge, you can directly or indirectly transfer the cost to the customer. You could also reduce or eliminate it as part of your occasional product promotion campaign. The bottom line is you must know how much it costs to move the item from point A to B if you are going to make the right pricing decisions.
Get Competitive Pricing
Comparing different providers is business 101 but it’s amazing how many SMBs go with the first logistics company that comes to mind. At some level, this is understandable since small businesses don’t have the luxury of numerous employees some of whom will specialize in handling the logistics.
Fortunately, the internet has made the search for the ideal service provider much easier, faster and cheaper. Obtain quotes from multiple carriers and check if the prices are negotiable. The lowest cost may not necessarily be what you need so when you evaluate any two carriers (e.g. Pallet Anywhere and Yusen Logistics), make sure you are comparing like for like.
The internet is not just great for research. Thanks to the internet of things, it is possible for you to keep tabs on a wide range of events affecting your product’s transportation. Both you and your customers should be able to tell where the item is at any given point in time. By giving customers direct access to tracking information, you rid yourself of the burden of having to keep them updated.
Supply chain and logistics are vital for the success of any business, large or small. Without a well-thought-out logistics management plan, you’ll place your entire business strategy at risk of failure.