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Here is How Saving Money can help Logistics Companies

Logistics is the inseparable link between supply and demand. While warehousing is equally important when it comes to assessing the customer requirements, the logistical considerations actually play a pivotal role when it comes to amplifying the credibility of an enterprise. Needless to say, most organizations are on the constant lookout for lowering down the logistic costs which in turn saves a lot of money for them.

The latest marketing trend for companies is to outsource the logistics via select 3PL service providers. However, there are times when outsourcing adds to the hassles and sabotages the growth of an organization. Therefore, it is evident that most logistics companies try to minimize the headaches associated with deference and outsourcing. Although, technology can always extend a helping hand, it’s all about assessing the requirements beforehand and modifying strategies, accordingly.

Reducing Logistics Costs and Headaches: Best Possible Solutions

  1. Utilizing Open Spaces

The first approach involves identifying and eliminating vacant spaces associated with a container. However, this needs to be done in a diligent and highly organized manner. Increasing storage density is one way of looking at lower logistics costs. This involves full truck utilization where a company can pack in a few more options, thereby lowering the overall costs. Strategies like these lower freight costs and even encourage organized operations. The perks of utilizing spaces include asset utilization, inventory accuracy and even labor efficiency.

  1. Understanding Your Competition

Companies offering services related to warehousing, distribution and packing must be cognizant of the market competition. Having the best price for services can automatically attract a greater customer base, thereby improving revenue generation. Cutting logistics costs isn’t only associated with the freight storage and movement. Even if a company quotes lower prices as compared to some of its contemporaries, profits can still be generated if the underlining costs are lower than the expenses. This can be easily achieved by implementing streamline processes— including efficient management of accounting and transportation teams. Proper accounting is yet another technique for lowering logistics costs despite the concerned company quoting reasonable rates for its services.

  1. Carrying a Safety Stock

Logistical considerations can get tricky at times. Companies offering services aren’t always in direct contact with the retailers and miscommunications can hamper the credibility quotient. Therefore, it is advisable to carry a safety stock, especially for premium and loyal customers. The safety stock offers a backup plan in case the expedited shipments aren’t in the desired condition upon delivery. Although some companies consider safety stock as an additional expenditure, it helps create great relationships with buyers. Not just costs, utilizing this approach also minimizes the headaches associated with logistics.

  1. Having Customized Containers for Liquids

Liquids, when transported in bulk, are prone to spillage. From an economic standpoint, it is always advisable to use Intermediate Bulk Containers or IBCs for the same. While the standard drums are good for basic orders, the cost to spillage ratio is something which needs to be assessed. With IBCs in place, companies can move a substantial amount of liquid using fewer containers. This minimizes overall costs and also offers a sense of assurance to the customers and service providers.

  1. Opting for Automation

Believe it or not, automation actually simplifies the way companies undertake logistical activities. In the truest possible sense, an automated approach comes with myriad regulatory measures which are difficult to initiate manually. Moreover, manual labor requires constant validation and therefore incurs higher costs. Automation seems more like a one-time investment which seamlessly handles logistics, transportation and a host of other activities sans human intervention. It needs to be understood that automation holds true for every aspect of logistics and the quicker companies opt for it, the better it is for them.

  1. Tracking the Inventory

Companies that regularly track their inventory are better off at saving money. Updated inventory levels prevent overstocking, which in turn minimizes overall costs. Having a spreadsheet to fall back upon is yet another option for the enterprises. In addition to that, it is essential to keep a note of the available merchandise and the quantities asked for. If an organization is good at replacing the merchandize, it need not worry about the deadlines and additional costs. Moreover, an adequately stocked inventory minimizes the logistics headaches and hassles; thereby adding a sense of credibility to the affairs.

Bottom Line

Logistics companies usually have a lot on their plate when it comes to user requirements. Be it working overtime during a busy season or handling multiple customers at the same time— there are a host of elementary issues to deal with. However, at the end, it all comes down to the costs and efforts associated with the same. While the mentioned strategies can surely help an organization minimize the overhead costs and lingering discrepancies, it is all about innovation that assists a logistics company when it comes to surviving and growing in this keenly contested market.

Retaining Top Talent in the Trucking Industry

When it comes to recruiting the top talent in the field of transportation, enterprises need to be intuitive and smart. The concerned department involving transportation and logistics is actually facing trucker shortage and unless quality talent gets tapped— the situation is only expected to worsen. While the American contingent is already smarting under a massive trucker shortfall, the predicament is fast spreading across the globe with a host of qualified workforce retiring, prematurely.

 

It is therefore important for the Gen Z enterprises to be more vigilant regarding the future of the trucking industry. As we have been able to foresee and presume the concerning trucking issues, it is only appropriate to fix them in the long run. Moreover, there are a host of problems leading to this global trucker shortfall:

 

  1. Most drivers keep facing constant pressure when it comes to meeting deadlines and working beyond the predefined hours.
  2. Fighting off fatigue and dealing with customer requirements are some of the lingering challenges— concerning trucker deployment.
  3. This is one extremely taxing area of work and therefore frequent burnouts after days on the road aren’t uncommon.
  4. Young drivers, below the age group of 21, find it hard to acquire a CDL license— which then hinders their willingness to continue in the same industry.

 

While we have already enlisted the issues related to the trucking industry, it is actually important to nip the problems in the bud by putting measures in place. Lately, there has been an inclination towards last-mile transportation as customers prefer home deliveries, more than anything else. Although this puts a bit more pressure on the concerned employees, the last-mile approach actually helps with employee engagement. Clearly, it’s all about proper work distribution when it comes to keeping the employees motivated and retaining the top talent.

 

Working with Millennials

 

As the trucking industry needs a timely revival, the focus is now on the millennials for saving the day. Most of the mentioned challenges can be dealt with if enterprises can target the millennials. As per reports, millennials are the largest working generation and getting them on-board is probably a miracle every transportation firm needs.

 

Employers can readily tap this fresh pool of talent for shaping up the trucking industry as millennials can be best enticed by the new skill sets, newest set of technologies and abundant chances of growth— traits which only the trucking industry can offer.

 

Every organization has to attract the prospective employees in order to keep the working hierarchy intact. That said, offering new skills to learn is something that goes a long way when employee satisfaction is concerned. Based on surveys, it can be inferred that most individuals commit to new professions mainly for the attractive skill sets and opportunities to adopt newer technical prowess. Then again, monotony is considered to be the most popular reason for individuals letting go of their existing jobs.

 

Understanding the HCM Technology

 

There is a specific way of dealing with stuffs when distribution and trucking are considered. While it is important to take a note of the engagement quotient, hiring principles and employee retention— the concept of human capital management is something that can help enterprises sort each one of the following.

 

The HCM technology isn’t a new kid on the block and has been around for quite a while now. For starters, human capital management helps companies with employee engagement and overall retention. In addition to that, the advanced concepts of HCM technology actually assist truckers by offering them with predefined schedules, shift preferences and a host of other benefits.

 

Apart from that, HCM technology is also useful when it comes to attracting the millennials as prospective employees. Some of the immediate advantages include:

 

  1. Creating decent job titles and targeting the concerned demographic
  2. Highlighting technical opportunities alongside better training and skill-building programs
  3. Promoting newer technologies with transferrable skills on-board
  4. Describing key benefits of the employee value system while addressing techniques that minimize overall stress and daily pressures.

 

Bottom-Line

 

The main aim of the transportation industry is to be the most functional part of supply chain management. In the following quest, it is desirable for the concerned enterprises to tighten the talent gap by addressing newer strategies. Moreover, it is important for the trucking industry to attract newer talents which would help them with sustainability, automation and better results.

6 ways to Reduce Food Wastage in Supply Chain

Each year more than 80 million tons of food is discarded in Europe alone. The overall cost of this wastage is more than 140 billion Euros.  Globally it is estimated that a third of all the food produced, is wasted. Most of this wastage happens before the food item even reaches the market. These figures assume higher significance when more than 750 million people around the world face food insecurity. In countries with abundance of food, people tend to throw away what they do not require or consume. This wastage not only has the environmental impact but it impacts the environment (In terms of energy and resources consumed in producing and packing the food that is thrown away). The Food supply chain along with its three stages i.e. Production, wholesaling and retailing has a significant contribution in this wastage. The cost of disposal of unutilized food adds to the cost of food wasted due reasons such as wrong or bad storage, no demand, wrong transportation, expiry before sale etc . Let us look at some of the ways that the food wastage can be reduced in the supply chain.

  1. Intelligent Packaging. Lot of food is sensitive to environmental factors such as temperature. A smart packing such as Time temperature indicator that tells how long an item has remained at a particular (generally high) temperature can indicate how soon the item will go bad and thus prioritize its sale/consumptions. Many fresh foods (many fruits) respire even after harvest. When packed, they can change the environment inside the packaging due to respiration and thus can go stale. Gas indicators built into packaging can indicate the level of gas harmful to the product. Similarly biosensors can be used to indicate the level of pathogens in the food and transmit the data to control centre. All such indicators and information about the level of freshness of food can be used to prioritize its sale and consumption before it’s spoilt and thus reduce the wastage.
  2. Packaging Considerations. Packaging of the food product has very high impact on it’s shelf life. A vacuum packed meat product stayed fresh without any significant pathogens for long time. Similarly a cling film wrapped cucumber stays fresh for over two weeks, while an unwrapped one loses moisture and becomes dull in 3 to 4 days. Apart from freshness, Fruits and vegetables packed in trays and bags reduce their wastage due to handling anywhere between 5 to 20 percent depending on the food item. Well designed packaging also speeds up the movement of the product, due to easy handling. There is a lot of innovation in packaging that food supply chain companies should look into.
  3. Transportation. Cold transportation is not new. There are active cooling trucks (with actual refrigeration and passive cooling trucks that are basically thermally sealed. Wha’ts interesting however is the temperature gradient inside the trucks, once they are loaded. Most transporters simply ‘stuff’ the truck with products without much thought to placement of product to maximize its shelf life. Even in regular trucks the temperature of food right in the centre of the truck is different than the temperature at periphery. This can have large impact on the life of the product. Even in cold trucks if they are stuffed and the center is not cool enough, the food loaded in the centre has higher chance of being spoiled. Not only the temperature, but the way fruits and vegetables are loaded can have large impact on their life. Can you imagine berries at the bottom and potatoes at the top, going over a bumpy ride?
  4. Increasing decision points in Supply Chain. Most products don’t go from point of production direct to retail shelf. There are multiple hubs and distribution points between the point of production and point of final sale. However with technology, more and more decisions are being centrally. The decision points need to be decentralized and local intelligence specific to the distribution point needs to be utilized for maximum utilization of product. Products with shorter shelf life should be sent to high turnover outlets so that they can be sold before they expire. The principle of ‘First Expiry First out’ should be followed rigorously. Smarter decisions about product movement can be taken locally depending on local conditions such as weather. If the weather is nice and sunny, the demand for barbeque related products will increase. If its cold, the juicy fruits (e.g. watermelon) would be expected to move slowly and can be shipped to other warmer areas.
  5. Cost factors. Food industry often operates on low profit margins. Subsequently all the processes are designed for cost optimization. However lower cost may not always be the best solution. For example, organic food needs to be delivered quickly. The demand for organic food is increasing and it also has higher margin. So supply chain invests a little more in quick delivery of organic food, it can capture both, the volume and the higher margin, thus offsetting the cost and making more money.  A retailer in USA capitalized on this model by making quick deliveries of Organic, less processed oils. The retailed made express deliveries right from the production point and thus maximized the shelf life of oil available to the consumer (about 3-4 months). it’s competitor’s distribution processes itself took 3 to 4 months and thus could not compete.
  6. Production Location. Point of production is also a key factor in supply chain. The closer it is to the consumer, the smaller the chain and lesser the chance of waste. Many organization prefer to have production plants closer to the source of raw material. It reduces the transportation cost of raw material, but increases the waste in subsequent supply chain. With modern technology and transportation options, it is easier to transport bulk raw material to the more distant plant. It also provides for the maximum shelf and storage life once the product is leaves the production plant.

 

Some Food wastage is inevitable. Food will rot, get spoilt and will face some logistical issues. However the amount of food that is wasted currently is unsustainable. The higher environmental cost of this waste will be borne by the next generation; all while there still 700 million hungry people around the globe. If nothing else, the economic cost of the food wastage in itself makes a great business case to stop the wastage as soon as possible.

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.