Logistics management is the process of managing the flow of raw materials, goods and information from the producer to the final consumer. It encompasses various production functions such as procurement and manufacturing. In essence, logistics cares about delivering goods to customers when they need them. The ability to manage your logistics effectively can give you a competitive advantage over the competition no matter what industry you’re in. Some of the most common industries include construction, industrial, print and packaging, automotive, FMCG, and numerous others. This article looks at some ways you can use logistics to enhance your competitiveness.
Delivering Products at a Lower Price
If you can deliver products to your market at a lower price without sacrificing your quality, this can be a competitive advantage. This is also more profound in saturated markets where there is little differentiation among products. Here, the producers that can cut the production costs can have the upper hand in the market. One way of reducing costs is by enhancing efficiency in the delivery of raw materials and finished goods to cut logistics costs. Given that the cost of delivery is added to the price, this can lower the final price significantly.
Delivering Goods on Time
Businesses dealing in consumer goods should have goods on the shelves at all times. You should plan your logistics such that you can handle seasonal increases in demand. Partner with other entities in the supply chain, such as distributors, retail stores and wholesalers, to have the goods available across the market at all times.
On the other hand, you should ensure that goods made on order are produced and delivered before the set timelines. Most of these products are sold to businesses as parts and inputs. A delay in delivery affects their production cycle. Timely delivery is one of the things that most clients check when choosing suppliers. Therefore, the ability to deliver in time upper hand over the competition.
Providing Value to Clients
You can offer value to your clients through logistics. If you sell parts that make a whole or part of the whole product, you may assemble these components before shipping the products. This eases the work that the client would do in sorting and assembling parts. You can also offer technical support to your buyers or produce custom parts for their needs. The value a customer gets from your delivery may set you apart from the competition.
Logistics Strategies to Enhance Your Competitiveness
You can employ various strategies to enhance any of these three competitive advantages. Here are some of them.
Use of Supply Management Software to Manage Your Logistics
With a Supply Management program, you can track your supplies along with the deliveries. If you have a distribution centre or warehouses spread across the market, the tool can help plan production and procurement in line with the inventory.
If you have a fleet, you can have a separate logistics department along with logistics software. This one helps you track your orders, dispatches and maintain records of your fleet so that they are all in good condition when needed. Most software can integrate and share information with others for use by different departments. Information technology offers major cost advantages for your supply chain.
Online and Telemarketing
Make it easier for clients to reach the company, make queries and place orders directly on the website. It cuts the back and forth correspondence, which delays the fulfilment of orders and the related cost. A shorter order cycle can be a competitive advantage. No customer wants to take hours or days to get his or her order processed.
Investing in Quality Human Capital
You need a competent team to run your supply chains and communicate with your customers and other suppliers. A competent team also suffers fewer errors and handles various situations professionally. If the cost of maintaining such human capital is too high for the company, you may consider outsourcing such a function to cut costs.
Use of 3PL Providers
Third-Party Logistics offers supply chain solutions with a high level of expertise. You can outsource such functions as distribution, warehousing, assembly, order fulfilment and shipping. They work across B2B and B2C markets, giving you a chance to concentrate on production. You enjoy cost advantages, as you do not hire teams or infrastructure to manage warehousing and distribution. In addition, you can provide on-time delivery of goods and enhanced value to your clients.
Promotions and Increased Sales
The sales volumes help cut costs in deliveries. When you have several orders, you can deliver truckloads of goods in a single trip, lowering the number of trips to the destination. This, in turn, lowers the cost of delivery considerably. Increased sales effort can increase orders and cost advantages.
With efficient logistics management, you can offer value, reduce the delivery cost, and deliver goods on time. You need to identify shortfalls in your supply chain and find ways to deal with them. The above tips are some ways to optimise your logistics to increase your competitiveness.