5 ways to save your logistics cost

5 intelligent ways to cut down your logistics cost

Logistics and supply chain are the essential links of any business. Regardless of being a manufacturer, distributor, importer, retailer, or an e-commerce business, logistical issues are imminent. They may include order fulfillment, warehousing, material handling, e-commerce fulfillment or any other logistical aspect. It would be smart to find an optimized 3PL solution to cut down your distribution costs. For businesses small and large, any savings in revenues means being more competitive in the market.

There are various ways to cut down your logistics costs. Here are five intelligent ways to cut down your logistics costs and envelope a wholesome approach to cater for all kinds of businesses (small or big).

  • JIT- Just in time management

With the introduction of better global communications, logistical grouping and faster means of delivery, the alternative concept “just in time” follows the minimalist approach. Leave it to your 3PL company to provide you with the resources you need just in time to fulfill your orders successfully.  The concept calls for generating required logistics just in time to cancel out logistical costs incurred on procurement, maintenance, and inventory of such requirements.

  • Collaborate

All businesses have seasonal inventory fluctuations (especially e- commerce related businesses) for which the inventory levels drop to minimal for quite some time each year. Logistical costs like manpower and space hired outweigh the benefits acquired from  such arrangements. Companies might have to pay for un-utilized storage spaces under such circumstances. A smart way to handle such situations is to collaborate with third party logistics providers who carry the requisite structures to handle your needs.

  • Don’t outsource, insource

Let the experts handle it. After finding your collaborative partner, it’s time to let go. Let the experts join your team to review logistics, gather market feedback, and do the heavy lifting (no pun intended). Such partnerships will help you a great deal in reducing your logistical footprints and costs.

  • Regionalized Partnerships can be most beneficial

Logistics are more about ground presence in most cases and it has more regional implications than global ones (for most operations). Benefiting from logistical resources of other regional players while offering from yours is a win-win situation for all. While you compete in some fields, you can cooperate with others to derive logistical benefits and reduce your costs.

  • Power of analytics

This stands true for every business in the world. Investing a little in logistical analysis software will help in making successful business decisions using detailed data points.

http://sungistix.com/ is a smart 3PL fulfillment solution provider which can help you virtually in any logistical quagmire.

 

3pl, Warehouse, Fulfillment, ecommerce

Do’s and Don’ts before signing up with a 3PL warehouse

Well, your business seems to be growing and you suddenly realize the need to improve your logistics and set up new warehouses to suit the growing demand of your business. But wait, do you really want to set it up all by yourself??? Most Probably, NO! Unless you want to get into hefty investments and hassles of getting a warehouse operational. And trust us, it is a herculean task! So, let’s look at an easy and economically viable solution- Yes, partnering with a 3rd Party Logistics Company and using their warehouse.

A Third Party Logistics provider (3PL) is a company that assists your organization at various points in the supply chain by proving their expert solutions and implementing best practices suited to your need. A good 3PL partner can be your one stop solution to all fulfilment needs. Warehousing is one of the key offerings of a 3PL solution provider and thus must be chosen wisely as it can have huge impact on your revenues and overall business. However, it is not an easy job to find the right Warehousing Partner. Here’s a quick list of Do’s and Don’ts to help you sign up with a 3PL Warehouse. Remember, making un-informed decisions and choosing the wrong logistics partner can be more damaging than beneficial to your business.

Do’s

  • Do Check the Location of the Warehouse –

The location should suit your overall distribution plan and preferably closer to your high consumption area. The closer you are to your high customer density areas, the faster you can reach out to them and create a brand value with splendid customer experience.

  • Do Check the capacity of the warehouse –

The capacity of the selected warehouse should suit your current need as well as quickly scalable up as your business grows. The warehouse supplier should also be flexible enough to manage fluctuations in your demands.

  • Do Keep your needs clear –

Unless you are clear on what you would need from your warehouse partner you may never be able to make the right choice. Being crystal clear on your current and futuristic requirements is an important step in finalizing the 3PL warehouse.

  • Do Check the hiring and training policies of the warehouse provider-

The warehouse manpower is a key aspect to be considered for the success of the warehouse services. Checking the hiring and training policy of the 3PL provider can ensure that your goods will be handled well in the warehouse by skilled manpower.

  • Do Check their financial stability

The last thing you want to suffer from, is your warehouse partner limping on financials and unable to support your business. Checking the service provider’s financial stability in the market and their track record with other customers can assist in making the right choice of 3PL partner.

  • Do Ensure that they prefer technology over manual dependency-

Evaluate the service provider based on their usage of Technology at their warehouse. Do they have a good warehouse management system in place? Is the material handling automated? Does the system give you correct reports of the inventory? Can they offer live Inventory Check? The more they use latest technology and equipment at the warehouse, the more beneficial they will be as your partners.

  • Do Check the Safety Policies and Procedures of the 3PL warehouse supplier-

Safety at the warehouse should be a prime focus are of the service provider. It should be applicable for their employees, managers, floor staff and even the consignments. Visit the warehouse and check for Fire Safety provisions, warning signs and labels and adherence of staff to other safety norms. Evaluating the safety equipment and norms being followed at the Warehouse, right at the start, can go a long way in preventing losses later.

 

Don’ts :

 

  • Don’t go for a provider whose warehouse does not have good connectivity to highways, rails and ports-

Since your shipment time is hugely dependant on proximity to roads, rails and ports, having a partner whose warehouse isn’t close to these may delay your speed to market and have a negative impact on your business. Thus not a very great idea.

  • Don’t Over Analyse –

Restrict your search for a 3PL warehouse to maybe a maximum of 3. If you keep considering more and more options, you may miss on the intricate details that you need to check and focus on before signing a 3PL warehouse partner. Keep your list short and delve deep into evaluating them to identify the partner most suited to your need.

  • Don’t fall into the price Trap –

Certain companies go ahead choosing a 3PL warehouse based solely on the pricing. However, this approach may be quite damaging. While you need your warehouse service supplier to be competitive in pricing and not over-charge you, but what is also essential to check is the quality they will deliver. If the warehouse management does not have the necessary quality processes in place, it is ultimately your business that will suffer.

  • Don’t Rush into signing up-

Take your time. Do a proper due diligence of selected suppliers in accordance to your needs. Check for important things like safety, scalability, flexibility and pricing of the supplier and sign up only when you are fully satisfied. Try to build faith and trust between both the parties at the start. This will go a long way in having a successful and mutually beneficial partnership.