How to be more competitive in logistics

July 7th, 2021

Proper supply chain management will help you reduce costs, increase and even improve productivity in your business.

Correctly managing the entire supply chain also directly affects the cost of products and the quality of services. So that is where the vast majority of companies take advantage. Do you want to know how to do it?

 

 Implement technology to your supply chain:

Using tools that further improve visibility in the supply chain. Ensure that we have more information in all processes and at all times and that there is greater fluidity in the exchange of data with the different operators who work in the supply chain.

 Inventory management and organization:

In the inventories, the main goal is to certify the practice of the raw material and the products that manage to cover the demand. The key here is to create processes for the correct and efficient management of products. Some of our tips:

– To be able to properly identify materials and products, use of coding practices. This will make standardization easier, essential for improving quality processes.

-Classify materials according to their importance (ABC)

-To optimize inventories, synchronized stock management.

-Implement the just-in-time policy in order to keep inventories in the best conditions and reduce storage costs to the maximum.

-VMI strategies that consist of inviting suppliers to manage the inventory. This improves the service that the manufacturer offers to the end customer.

-Delay the customization of a product in order to better cover and respond to strong demand.

-Implement advanced organization APS-type software that helps solve problems that may arise in the supply chain.

Warehouse management:

A large warehouse can be even a 60% of the total cost of a company. If you want to be more competitive, correct management will be the key. How can you improve management?

-Share warehouses. Recommended especially for SMEs as it allows them to be more flexible with a geography that changes so much in such a short time.

-Automatic systems that take care of the collection. To be more efficient with those resources related to warehouse management.

-Find the most efficient way to receive and send your products, without sacrificing the quality you offer your customers.

-Have buffer warehouses to improve distribution and guarantee a faster response.

 Transport management:

In most companies, transport management also involves high costs. To do this, you must, among other things, carry out strategies in the design of distribution networks. But let's go on to comment on some tips in this regard:

-Reverse logistics

-Outsourcing

-Implementation of groupage

-Use multimodal transport

-Crossdocking

-Traceability of the cold chain

-Traceability and security in the supply chain

Outsourcing of logistics services:

If you want to be more competitive, the recommendation is that you outsource these processes: Logistics providers, carriers or integrated service providers, among others. The most specialized use state-of-the-art technology to always offer the best service. If you want this type of implementation to work correctly, it is essential that you carry out practices in collaboration with these providers that we are talking about. They will make your efficiency increase and your costs decrease.

Provisioning improvements:

At this point it is important to carry out a correct implementation to improve coordination between suppliers and your end customers.

-Implement metrics to be able to identify a correct management of purchases and results.

-Purchasing management must be included in the planning of a company in order to coordinate them with the global objectives of the company.

-The supply area must know the company's strategies and objectives in order to select the most appropriate service for the business. Costs, quality and service levels of the different providers must always be chosen based on the strategy and objectives that have been previously decided for the company.

Use of metrics:

The implementation of metrics, data collection and feedback will also be essential in the logistics area of any business. You have to use indicators such as inventory turnover, return on assets or the cost of goods sold.

-Measure the efficiency of the inventory and the days in which rotations are made.

-Think about logistics costs and consider it part of the sales generally between an 8% and a 10%.

-Implement the SCOR model to more objectively measure your supply chain.

-Measure all deliveries you've made on time. This is done as the ratio of the product that the final customer received in reference to all the product that you received from your supplier.

Improvement in the relationship with suppliers:

A fully integrated collaboration between all operators working in the supply chain. Constant exchange of information and trust in all team members.

-Appoint operators or workers for management with your suppliers.

-Facilitate mutual coordination and collaboration as much as possible.

-Share your long-term goals with all members of the supply chain.

-Regular meetings with all members of the supply chain to understand all expectations and concerns and see that everyone is heading in the same direction.

-Measure in some way the appreciation that the client has of the suppliers.

-Be constantly giving feedback to your suppliers so that they know at all times if they are doing a good or bad job.