Cutting transportation costs has continued to be one of the greatest strategic challenges in global logistics, but there are many more to take note of as you form your strategy for 2019. The following list includes the top logistics challenges that businesses should be prepared to overcome this year. If you are currently experiencing any of the following setbacks, working with a third-party logistics (3PL) provider can help. Here’s what you need to know about the challenges faced by the logistics industry today and where you can find effective solutions.
Inventory turnover is described as the cost of goods sold compared to the average inventory over the same period of time. It is generally simple to calculate and provides important insight as to where problems with inventory exist. However, inventory turnover analysis and management isn’t a one-size-fits-all approach for all companies and your company may need a specific strategy. If you want to know how to improve inventory turnover, keep on reading.
The Importance of Inventory Turnover Analysis
The reality is that the cost of logistics, warehousing, and transportation are always rising. This means that companies must examine where they can find efficiencies and save money. Hiring a third-party logistics company is one of the major ways that you can reduce logistics costs for your business.
Ways to Reduce Logistics Costs
There are many specific reasons why a 3PL provider creates a reduction in logistics costs. When you hire a trusted 3PL company, you also gain from their experience in a number of areas from cost of freight to a reduction in damaged shipments. Remember that all of this is driven by the need for a 3PL company to constantly perform.
If you’re in the business of selling products, then you’re in the business of manufacturing, storing, and shipping products as well. That means as a business owner you need to have a logistics strategy in place that makes this process efficient and cost effective. Your logistics should be an asset, a tool your business uses to maximize profits and solidify your relationship with customers. Used incorrectly, however, it can be equally as detrimental to the operations of your organization.
Your shipping logistics processes intersect with many different elements of your business to the point where the efficiency and effectiveness of your logistics can have a very real and tangible impact on how well you market yourself. “Market” in this context, relates more to matters of public perception than direct advertising efforts—but those can be involved, too. Simply put, logistical efficiency is important for marketing because the enhancements that it brings will often directly or indirectly impact the consumer experience. Improving the former will naturally lead to gains in the latter, thus strengthening your brand.
Now more than ever, the opportunity for logistics efficiencies is present for retailers, in particular for those in e-commerce. With manufacturing steadily making its way back to North America, companies can apply a combination of technology and improved operation procedures to cut costs, improve delivery times to customers, and increase margins on overall profitability.
Whether you have a large or a small business, a new company, or an establishment that has been around for decades, if you are shipping products it is essential to have a logistics system in place that safely and efficiently gets those products from point A to point B.
With the number of variables involved in shipping products, this is not always the easiest task to get accomplished. Logistics involves several different people from various departments and industries, and it can also involve knowledge of multiple systems throughout the delivery process. But implementing some fairly simple strategies can make the process much more straightforward and effective for everyone involved.
Third-party logistics providers (3PLs) work with shippers to manage their logistics operations. But 3PLs provide much more than logistics management, they find ways to accommodate consumer demands. Many 3PLs offer complete fulfilment of logistical services, including handling orders, storage and product shipment.
Retailers are on the eve of what will be the most profitable segment of the year. September through to the Christmas season typically means higher volume sales and more customers walking through doors and visiting web sites. But then the best months of the year are immediately followed by the worst, as it relates to returns, that is.
It’s always interesting to speculate on the future of any industry. Experts all give their predictions on what the next decade, quarter century, or half century will bring. Some of it comes to pass, other predictions don’t ever make it past the “what if” stage. The future of logistics, not unlike many other industries, is in the technology. And with some exciting new systems already being implemented with others yet to come, there will be just as much anxiety as there is excitement over how future technology in the logistics industry will be applied.